Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2004-05 - A search was carried out at premises of assessee - As there was difference in stock of carpets and durries found during search and stock as per stock registers maintained by assessee, assessee surrendered certain amount as an unexplained investment - Assessing Officer computed gross profit at rate of 16 per cent on such investment and added same to assessee's income - He also imposed penalty upon assessee under section 271(1)(c) - Assessee challenged penalty order on ground that surrender was made by assessee just to buy peace and otherwise difference in figures of carpets was due to fact that those carpets were taken on approval basis - Assessee also produced evidence in form of bills and vouchers, copies of accounts of suppliers/manufactures duly acknowledging delivery of carpets to assessee on approval basis, details of income-tax assessment of parties along with original bills in respect of carpets as and when same were purchased along with PAN details of suppliers/manufacturers - After considering documents submitted by assessee, Commissioner (Appeals) held that there was no deliberate concealment of income on part of assessee and, therefore, imposition of penalty was not justified - Tribunal upheld order of Commissioner (Appeals) considering an additional aspect that even in case of firm wherein assessee was a partner, similar penalty under identical circumstances imposed by revenue had been deleted and said order in respect of firm had been accepted by revenue - Whether, on, facts, Tribunal had taken correct decision - Held, yes Ms. Prem Lata Bansal and Deepak Anand for the Appellant. Dr. Rakesh Gupta, Ashwani Taneja, Ms. Poonam Ahuja and Johnson Bara for the Respondent. JUDGMENT A.K. Sikri, J. - This appeal was admitted on the substantial question of law whether the ITAT was correct in law in deleting the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act. The aforesaid issue has arisen for consideration in the following factual backdrop. For the assessment year 2004-05, the assessee herein who is a partner…

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