9911796707
TMI Blog1995 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... 630, the assessee-firm had two partners and return was filed declaring total income at Rs. 59,730. Assessment was completed under s. 143(3) on a total income of Rs. 5,23,625. Both the firms, with identical names but different constitution, derived income from contract work, as building contractors. The Assessing Officer (AO) in both the cases did not find the book results as appropriate inasmuch as proper and regular books of account had not been maintained. The expenditure was not verifiable, in the absence of vouchers. Gross profit rate of 10% was adopted on gross receipt and the assessment made accordingly. Since there was a difference between the returned and the assessed income in both the assessments, penalty notices were issued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel has further pointed out that it was only on account of suspicion that impelled the AO to proceed against the assessee for levy of penalty. Simply because certain expenses were not supported by vouchers, this would not give rise to a conclusion that the assessee had shown fictitious claims. There is nothing on record to show that the assessee had made bogus or false claims. There is no finding that the vouchers produced by the assessee were bogus or false documents. Our attention has been drawn to the three decisions of the Allahabad High Court—one in the case of CIT vs. Nadir Ali Co. (1977) 106 ITR 151 (All), the second in the case of CIT vs. Harnam Singh Co. (1977) 106 ITR 532 (All) and the third in the case of CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, etc., in making the return. The Gujarat High Court had also an occasion to examine a similar matter in the case of CIT vs. S.P. Bhatt (1974) 97 ITR 440 (Guj). There also, the AO had assessed the income at a higher percentage because the assessee had failed to maintain proper record. It was held that for applying s. 271(1)(c), the AO should be satisfied that the assessee had concealed the particulars of his income. Simply because the AO found it difficult to accept the figure of profit appearing from the books of account maintained by the assessee, there could not be any conclusion that the failure to return the total assessed income was on account of any fraud or wilful neglect on the part of the assessee. Similar view has been taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of profit was adopted at 10%, as against 1.28% shown by the assessee. But that alone should not be treated to be a case of concealment of income. The learned counsel has drawn our attention to the Tribunal's order dt. 16th Nov., 1994 in quantum appeal, wherein the rate of 10% adopted by the AO was upheld, after looking into the expenses which were not properly vouched. The learned counsel has submitted that the Tribunal has upheld the rate of 10%, after noticing that the wages paid to the labourers had not been supported by proper vouchers. The finding given by the Tribunal is also to the effect that the payments and the expenditure were not supported by vouchers and book results had been rejected. The learned counsel has submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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