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TMI Blog2010 (10) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... nil income. During the year under consideration, there was a fall in G.P. rate in comparison to the GP rate shown in the preceding year. The Assessing Officer applying the GP rate 14.96% declared by the assessee in assessment year 2004-05 as compared to 11.42% shown during the year under appeal, made an addition of ₹ 1,75,000/- The Assessing Officer also from the perusal of the details noted that vouchers of machinery repaired, labour welfare, sales promotion, telephone and car running and maintenance expenses were not properly vouched and included personal expenses of the Directors of the assessee Company. The counsel for the assessee during the assessment proceedings agreed for disallowance of 25% of these expenses subject to non-l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. The CIT(A) upheld the levy of penalty. The CIT(A) observed that as the reasons for fall in GP rate could not be explained, the agreement for assessment for a higher GP rate would imply admittance for having filed inaccurate particulars of income. Further the disallowance of expenses was also due to the fact that they were not properly vouched and the assessee had to agree to the said disallowance. The assessee is in appeal against the said levy of penalty u/s 271(1)(c) of the Act. 4. The Ld. AR for the assessee pointed out that the penalty u/s 271(1)(c) of the Act was levied on the additions made on estimate basis. The Ld. AR further pointed out that the CIT(A) had relied on the case laws, which were not relevant. Further reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of his income or furnished inaccurate particulars of such income. There has to be a positive act of concealment on his part and the onus to prove this is on the Department. We are also of the considered view that the Tribunal grossly erred in law in relying on Explanation I(B) to section 271 (l)(c) of the Act to raise a presumption against the assessee. ' 8. The Hon'ble Punjab Haryana High Court in CIT Vs. Sangrur Vanaspati Mills Ltd (supra) held as under : 'In order to attract clause (c) of section 271 (1) of the Income-tax Act, 1961, it is necessary that there must be concealment by the assessee of the particulars of his income or furnishing of inaccurate particulars of such income. The provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The explanation of the assessee was that the rates of raw material, scrap, hard coke and BP Coke had increased whereas the sale rates of the products had not increased as compared to purchase rates, resulting in fall in GP rate, was no accepted by the Assessing Officer as the sale rate during the year had also increased. The Ld. AR for the assessee agreed for the application of GP rate @ 14.96% as applied in the assessment year 2004-05 resulting in addition of ₹ 1,75,000/-. The addition was made on estimate basis in turn relying on the GP rate shown by the assessee in assessment year 2004-05 and no concrete evidence was found against the assessee. Further, addition was made on account of disallowance of expenses being not properly vo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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