COMMISSIONER OF INCOME TAX Vs. VIJAY KUMAR JAIN

JUDGEMENT

(1.) This income-tax appeal against the order of Tribunal, Nagpur, has been admitted on following substantial question of law:

(2.) Briefly stated facts of the case, as projected in the impugned order, are that the assessee filed return for the year under consideration declaring total income at Rs. 70,818. The AO rejected the book results and made an addition of Rs. 1,70,920 by estimating net profit @ 10 per cent of receipt as against 6.36 per cent shown by the assessee. The penalty proceedings were initiated under Section 271(1)(c) of the IT Act, 1961 (for short 'the Act') and the AO imposed penalty of Rs. 60,000 (Annex. P/2) vide order dt. 19th Nov., 1996. The appeal preferred by the assessee against imposition of penalty under Section 271(1)(c) of the Act was allowed by the CIT(A) with a finding that the addition was only on account of application of higher rate of net profit by applying provisions of Section 145. There is no evidence on record to show that the assessee had concealed particulars of income or submitted inaccurate particulars of his income. In view of the above, the AO was not correct in holding that the assessee had concealed particulars of income by not producing documents in support of the claims made in the return.

(3.) The Tribunal has further dismissed the appeal of the Revenue with the following observations: