| The Tax Publishers2020 TaxPub(DT) 3286 (Jp-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where Tribunal in the quantum proceedings had held that it was not a case of unexplained investment/unaccounted purchases as wrongly understood by authorities below and it was only the suppressed sales made out of recorded purchases and in respect of undisclosed sales, only profit element can be added and AO was accordingly directed to restrict the addition, being the profit element on unaccounted sales, therefore, AO was directed to restrict the penalty and remaining penalty was directed to be deleted.
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Penalty under section 271(1)(c) - Investment in unaccounted purchases made by AO - Quantum addition was restricted by Tribunal -
Assessee firm deals in the business of cattle feed on wholesale basis. A survey under section 133A was conducted at the business premises of a Group, which also included the assessee. During the course of survey, assessee offered the amount of undisclosed income on account of Cash & Stocks. But, the same were not included by assessee in its return of income. Thereafter, assessment was completed at total income by making additions on account of alleged excess cash, alleged investments in unaccounted purchases and GP on short stock with others, pursuant to the survey. AO imposed penalty only on basis of alleged unexplained investment made in the purchase of stock and which was since deleted by Tribunal, the consequent penalty levied deserves to be deleted. Held: Tribunal in quantum proceedings had held that it was not a case of unexplained investment/unaccounted purchases as wrongly understood by authorities below and it was only the suppressed sales made out of recorded purchases and in respect of undisclosed sales, only profit element can be added and AO was accordingly directed to restrict the addition, being the profit element on unaccounted sales. Where the very basis of levy of penalty, being the quantum addition, was restricted, consequent levy of penalty should also stand restricted. Thus, AO was directed to restrict the penalty and remaining penalty was directed to be deleted.
Relied:M/s. Murlidhar Deendayal v. ITO (2020) 82 ITR (Trib) 223 (ITAT [Jai]) Rajesh Jain v. Dy. CIT (2006) 100 TTJ 929 (Del) : 2006 TaxPub(DT) 0022 (Del-Trib) Ashok Kumar Soni v. Dy. CIT (2001) 72 TTJ 323 (Jd) : 2001 TaxPub(DT) 1426 (Jod-Trib) Karam Chand v. Asstt. CIT (2000) 73 ITD 434 (Chd) : (2000) 68 TTJ 789 (Chd) : 2000 TaxPub(DT) 0704 (Chd-Trib) Rishab Kumar Jain v. Asstt. CIT (1999) 63 TTJ 236 (Del) : 1999 TaxPub(DT) 0904 (Del-Trib)
REFERRED :
FAVOUR : Partly In assessee's favour
A.Y. :
IN THE ITAT, JAIPUR BENCH
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