RAWAL PINDI JEWELLERS PVT. LTD.,DELHI vs. ITO, NEW DELHI

15. Again, addition has been made when the assessee has failed to produce Shri Chopra for recording his statement who had already filed affidavit with the AO. When Shri Chopra already filed affidavit with the AO, his statement made during survey proceedings cannot be used without providing an opportunity of cross examination to the assessee. Even otherwise, AO without perusing the employee’s register, provident fund and ESI record proceeded on the basis of bald statement of Shri Chopra that he is not employee of the assessee company. So, we are of the considered view that apparently, this is also not a concealment of income or furnishing of false particulars in any manner.

So, in view of what has been discussed above, we are of the considered view that AO has failed to make out the case of concealment of income or furnishing of inaccurate particulars of such income by the assessee rather it is a case of imposing penalty on the basis of subjective satisfaction without completing necessary ingredients to initiate penalty proceedings u/s 271(1)(c) of the Act. Consequently, we hereby delete the penalty and the appeal of the assessee is allowed.