M/S S.k.traders v. Commissioner Of Income-Tax, Patiala

Income-tax Appeal No.982 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No.982 of 2008 Date of decision: 13.12.2010 M/s S.K.Traders ...Appellant Versus Commissioner of Income-Tax, Patiala ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Pankaj Jain, Advocate for the appellant. Mr. Tejinder K. Joshi, Advocate for the respondent. **** ADARSH KUMAR GOEL, J (Oral). This appeal has been filed by the assessee against levyof penalty claiming following substantial question of law:- “Whether on the true and correct interpretation ofthe provisions of section 271(1)(C) the levy ofpenalty is justified on estimation of income that tooin absence of any third party conclusive materialbeing the basis of levy?” Facts have been noticed in connected appeal of theassessee in the matter of quantum disposed of a separate order ofdate. The finding recorded by the Tribunal while upholding the penalty is as under:- “We are conscious that the assessee himselfadmitted of under billing and surrendered a sum ofRs.7,50,000/- on this account. So, however, inrelation to such surrender, no penalty has beenlevied. The inference of the assessing officer isthat the assessee recorded a loss on sales made inorder to nullify the income surrendered. Indeedthere is a loss incurred by the assessee if we are toremove the credit on account of the incomesurrendered of Rs.7,50,000/-. The assessing officerhas elaborately brought out the manner in which theloss has been incurred for which the assessee hasnot offered any explanation. So, however, in ourview the addition having become final, presently weare only to evaluate the bonafides of such claim ofthe assessee. In our view the surrender orRs.7,50,000/- was made by the assessee before theADIT on 24.3.95 as noted by the assessing officerin the assessment order itself. Therefore, it can bereasonable to deduce that it is only post 24.3.95that the asessee would have incurred the loss witha view to nullify the income surrendered. The lossprior to such surrender has also been disallowed.So, however, the same cannot be said to be lacking in bonafides. It is only the non-furnishing ofexplanation in relation to the loss incurred postsurrender on 24.3.95 which is non-bonafide. Theloss, as worked out by the assessing officer post24.3.95 amounts to Rs.4,04,983/- in our consideredopinion, to the above extent the assessee can besaid to have not discharged the onus cast on it interms of section 271(1)(C) of the Act.” We have heard learned counsel for the parties. In view of the clear finding recorded by the Tribunal thatparticulars of loss for the period after the date of surrender furnishedby the assessee were not genuine and were false, case of penaltywas clearly made out. The assessee having given deliberately falseparticulars, there is no error in the view taken by the Tribunal. Thequestion has thus to be answered against the assessee. Accordingly,the appeal is dismissed. (Adarsh Kumar Goel) Judge December 13,2010Pka (Ajay Kumar Mittal) Judge