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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: HON’BLE S/SHRI JOGINDER SINGH (JM), & RAJESH KUMAR,(AM)
O R D E R
Per RAJESH KUMAR, Accountant Member:
This is an appeal filed by the assessee and is directed against the order of the Ld. CIT(A)-21, Mumbai dated 22.9.2015 pertaining to A.Y.2004-05.
The assessment, in this case was completed u/s 143(3) on 28.11.2006 at an income of Rs.4,67,13,230/-against the returned income of Rs.26,64,360/- filed by the assessee by making various additions inter-alia on account of estimation of income of Bhilai Plant and Tedessara Unit amounting to Rs.10,00,000/- and disallowance of Rs.3,50,000/- on account of depreciation in respect of freehold land. In the quantum proceedings the ld. CIT(A) directed the AO to restrict the income at 5% of sales of the said two units beside confirming the addition of Rs.3,00,893/-. In the further appeal before the ITAT, the disallowance of depreciation was confirmed. Accordingly, the AO issued show cause notice to the assessee u/s 271(1)(c) on 4.1.2010 for furnishing inaccurate particulars of income and finally the penalty of Rs.2,27,813/- was levied of the 100% of the tax sought to be evaded by an order dated 23.3.2010 passed under section 271(1)( c ) of the Act.
In the appellate proceedings, the ld. CIT(A) dismissed the appeal of the assessee by observing and holding as under : “8. I have considered the facts of the case, the assessment and the appellate Orders, the penalty order and the submissions of the AR carefully. There can be no general principle that no penalty can be levied where income is assessed based on estimate. 9. In the case of Dy.CIT Vs. Sushmadevi Agarwal (2012) 67 DTR(Kol) (TM) (Trib.) 430, Hon'ble Third Member of Bench of Kolkatta Tribunal has held that there is no rule that penalty for concealment u/s. 271(1)(c) cannot be imposed where income is estimated. The levy of penalty u/s. 271 (1 )(c) depends on the facts and circumstances or each case. Where the concealment of income is apparent from record, there is no reason why the penalty u/s 271(1)( c ) cannot be imposed for concealment of income, Reliance in this regard is also placed on the following: i) CIT vs Krishnaswamy and Sons (Mad) 219 ITR 157 i) Samsundar Bhan Sadh Vs. CIT 188 ITR 638(All). iii) Vidya Sagar Oswal Vs. CITR 108 ITR 861(P&H). iv) CIT Vs. Handloorn Emporium 282 ITR 431 (All) v) CIT Vs. Mahabit Prasad Bajaj 298 ITR 109 (Jharkhand)
Further, if the view that penalty cannot be levied where income is computed based on estimation is followed it will lend a premium to evasion by assessee who do not maintain any records and do not offer their income to lax because in such cases the income cannot be by the assessing officer.
As regards the claim 01 depreciation on land, it is patently not allowable. Further, the depreciation is claimed year after year. If the argument of the AR is taken to its logical end it would require penalty to be levied each year based on the depreciation claimed.
Keeping in view the factual matrix obtaining in this case and relying on the decisions cited supra, I am satisfied that Ld.AO had rightly imposed penalty u/s. 271(1)( c ) of the Act.
In the result the appeal is dismissed”