MAHENDRA SYNTHETICS P ITD Vs. ASSTT CIT

JUDGEMENT

(1.) These two cross-appeals are directed against the order of the learned Commissioner (Appeals) dated 16-10-1995.

(2.) Common issue is involved in these cross-appeals which revolves round the sustenance/deletion of penalty levied by the assessing officer under section 271(1)(c) of the Act.

(3.) The facts of the case in brief are that the assessee filed its return of income declaring loss of Rs. 7,76,212 which was assessed at an income of Rs. 2,84,900 under section 144 of the Act vide order dated 31-12-1990. The aforesaid assessment was set aside and after appeal effect the finally assessed income came to loss of Rs. 80,442. However, the assessing officer observed that an addition of Rs. 4,89,811 was made on account of cash credits amounting to Rs. 4,67,257 and interest thereon amounting to Rs. 22,554. The assessing officer levied the penalty of Rs. 3 lakhs in view of Explanation 4 to section 271(1)(c) of the Act considering the amount of Rs. 4,89,811 as concealed income.