ITA No. 6710/Mum/2019

Parties Involved

Facts Summary

The assessee filed its return of income for the year under consideration on 30/10/2002. The case was selected for scrutiny and statutory notice under section 142(1) along with 143(2) was issued to the assessee. During the course of assessment proceedings, the Ld.AO noticed that the assessee had not offered to tax income from stock on hire, accrued but not received. It was noted by the Ld.AO that the assessee had not been booked in the books of account, to the extent of Rs.18.06 lakhs, resulting in reduction of profit by the said amount. Similarly, the Ld.AO noted that the lease rental to the extent of Rs.6.54 lakhs accrued but not been booked in the books of account and the profit reflected in the books were lowered by the said amount. The assessee claimed expenses of Rs.1,44,87,000/-, depreciation of Rs.4.26 lakhs and loans & liabilities of Rs.1,16,43,000/-. The Ld.AO completed the assessment u/s.144 of the Act on 30/03/2005, determining total income at Rs.1,39,14,000/-, as against returned loss of Rs.1,51,02,000/- on the basis of material available on record. The assessee preferred appeal before Ld. CIT(A), which was dismissed. The assessee then appealed to the Tribunal, which set aside the issue to the file of the Ld.AO to redo the assessment denovo. However, since the assessee failed to comply with the notices issued by the Ld.AO, the Ld.AO completed the assessment u/s.144 r.w.s.254 of the Act and by retaining the same income assessed in the original assessment order. On …

Legal Issues

• 1. Whether the Learned CIT (Appeals) erred in confirming the order by ITO passed u/s 271(1)(c) of the Act.
• 2. Whether the Learned CIT (Appeals) erred in dismissing the ground that, there is a confusion in the mind of AO about which limb penalty is to be levied.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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