9911796707
TMI Blog2015 (4) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the assessee is engaged in the business of manufacturing and export of fabrics and other items. The return of income was filed on 01.11.2004 at Rs. 61,39,482/-, after claiming deduction u/s 80HHC of Rs. 25,87,814/-. As against the return income, the assessment was completed at an income of Rs. 4,39,90,930/- after making the following disallowances:- i) On account of GP Rs. 2,75,89,717/- ii) Disallowance of loss on exchange rate fluctuation Rs. 9,19,212/- iii) Disallowance of Keyman insurance Rs. 67,54,701/- iv) Disallowance of dedn. U/s 80HHC Rs. 25,87,814/- After the appeal affect, the penalty proceedings have been initiated on the addition made on account of gross profit. The assessee had shown sales of Rs. 31,22,46,861/- whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty proceedings, the assessee submitted that fall in GP was mainly due to decrease in sales realization due to rising value of Indian rupee. This was also palpable with the increase to the cost of production. The assessee had submitted various documentary evidences in support of the explanation furnished not only during the course of the assessment proceedings but was also during the penalty proceedings. Entire quantitative details of purchases were submitted in which no discrepancy was found in the course of the quantum proceedings. The entire purchases were fully verified by the Excise department because, the assessee has claimed rebate under the Central Excise. Further the GP addition has been reduced by the Ld. CIT(A) which shows t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In given circumstances, it is difficult to believe that there was any deliberate or willful concealment of income. Whole addition is based on estimation only. In such factual matrix, none of case laws referred by the AO is applicable to the facts of the case. On the contrary the judici8al pronouncements referred and explained in the Ld. AR's written submissions divulges the correct state of law on concealment penalty. Apart therefrom, the latest decision of the Hon'ble Supreme Court in the case of Reliance Petroproducts (323 ITR 158) should not lose sight which states that mere making a claim which is not sustainable in law, by itself will not amount to concealment. Even in the instant case, it is not a case of wrong claim but it is a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 31.22 crores, the export sales is at 31.20 crores. Thus, the major sales is by way of export only. In the quantum proceedings, the assessee has filed the entire quantitative details of purchases, in which no discrepancy has been found and entire purchases stood verified. This is also evident from the fact that the assessee has claimed rebate under the Central Excise, therefore, the said purchases have been verified by the excise department also. There is no discrepancy either in the quantity or in the value of sales made by the assessee. The addition has been made on the ground that there is steep fall in the gross profit rate as compared to the earlier years. The assessee's case was that, same was due to decrease in sales realization d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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