K.DEVAKAR Vs. ADDITIONAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Assessee has filed these Appeals raising the Substantial Questions of Law arising from the order of the learned Income Tax Appellate Tribunal, Chennai 'B' Bench, dated 16.05.2008, upholding the penalty imposed on the Assessee under Section 271 (1) (c) of the Income Tax Act,1961, in short, 'Act', for various Assessment Years viz., 2000-2001 to 2005-2006

(2.) The Substantial Questions of Law, on which these Appeals were admitted by a Co-ordinate Bench of this Court on 13.08.2008, are quoted below for ready reference :

(3.) The penalty in question was imposed by the Assessing Authority basically for two reasons viz., (i) Unvouched Expenses and (ii) Unexplained Credits. The explanation given by the Assessee before the Assessing Authority in the present penalty proceedings under Section 143 of the Act was that during the course of survey conducted at the place of business of the Assessee on 30.09.2005, the authority concerned found that certain cash expenses/unvouched expenses were shown in the Books of Accounts, relating to docks and certain expenses in the nature of labour charges. The Assessee claimed that some of the expenses were incurred on behalf of the customers, as they were engaged in the business of clearing and forwarding agents, and such expenses were to be reimbursed by the customers to him and, therefore, the said expenses were not even claimed as deduction by debiting the same in the Profit and Loss Account of the Assessee but still in order to buy peace, he surrendered the amount of Rs.1,03,255/- in his Revised Return filed and offered the same for taxation. However, a Penalty of Rs.4,16,836/- was imposed by the Assessing Authority under Section 271 (1) (c) of the Act and the Appellate Authority also upheld the same.