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6. Levy of interest u/s 234A/B/C & 234D of the Act is not justified.

7. Initiation of penalty proceedings u/s 271(l)(c) of the Act is not justified."

3. The fact in brief is that return of income declaring total income of Rs. Nil was filed on 15th October, 2010. The case was subject to scrutiny assessment and notice u/s. 143(2) of the act was issued on 26th Sep, 2011. During the course of assessment proceedings, the assessing officer has issued a number of notices u/s. 143(2) of the act as listed at page no. 2 of assessment order, however, the assesseee has failed to make any compliance. For non-compliance to the notices issued during the course of assessment proceedings, the assessing officer has also levied penalty u/s. 271(1)(b) of the act but the assessee has not made necessary compliance during the course of assessment proceedings. Under the aforesaid circumstances, the assessing officer has issued show cause notice on 4th Jan, 2013 to the assessee to explain why not the book result should be rejected since it had I.T.A No. 462/Ahd/2015 A.Y. 2010-11 Page No 3 Samir Crop Health Pvt. Ltd. vs. ITO failed to produce the books and supporting bills/vouchers for verification. However, the assessee has not made any compliance. Thereafter, the assessing officer has again issued a final show cause notice dated 13th Feb, 2013 wherein he has made comparison of total expenses incurred by the assessee during the assessment year 2010-11 and in the assessment year 2009-10. The assessing officer has also made comparison of turn over shown during the year under consideration with the total turnover shown in the preceding assessment year. The assessing officer observed that during the assessment year 2010-11 the assessee had claimed total expenditure at Rs. 86,74,550/- as against total expenses of Rs. 48,57,172/- claimed in the assessment year 2009-10 which was increased by Rs. 38,17,378/- compared to the preceding assessment year. There was decrease in the total turnover at Rs. 26,73,92,917/- as against the total turnover of Rs. 34,38,36,364/- in the preceding assessment year. The assessing officer has also observed that the total turnover of the assessee during the year under consideration was about 78% of the total turnover shown in the preceding assessment year, however, the total operating expenses claimed during the year under consideration was Rs. 1,07,06,536/- as against total operating expenses of Rs. 95,95,398/- claimed in the preceding assessment year. In view of the above analysis, the assessing officer was of the view that the overall expenses for the year should not be more than 78% of the total operating expenses of Rs. 95,95,398/- claimed in the preceding year. Consequently, the assessing officer has disallowed the claim of expenses amounting to Rs. 32,23,000/- (Rs. 10706536- Rs. 7484410) and added to the total income of the assessee.