Case Law Details
ITAT Ahmedabad held in Sohan Builders Vs ACIT that if the AO had assessed the income of the assessee at some higher percentage than what the assessee had already shown in the computation then it would not amount to the concealment of income, so penalty u/s 271(1)(c) could not be levied provided there was not any additional material in the hands of revenue which could prove the concealment of income. As the assessee had already been assessed at higher percentage which was acceptable by the assessee but after that, penalty for accepting such higher percentage of profit could not be levied. ITAT relied on the case of Hon’ble Gujarat High Court in the case of CIT vs. Whitelene Chemicals, (2014) 360 ITR 385(Guj.) in which it was held that if the income of the assessee was assessed at higher percentage of profit then penalty u/s 271(1)(c) could not be levied provide no evidence was found to prove the concealment of income.
Facts of the case:
The assessee was in the business of construction work of bunglows and sales thereof. The assessee used to do some additional work at cost after sales of the bunglows as per the requirement of the buyers i.e on no profit no loss basis. He did not earn any profit out of that. But still he showed the profit of 10.75% of total receipts from the above transactions. AO refused to accept the above percentage of profit and assessed the income at 25% of total receipts and also levied the penalty for the concealment of income u/s 271(1)(C) which was opposed by the assessee in the ITAT.
Contention of the assessee:
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