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| The Tax Publishers2021 TaxPub(DT) 1884 (Mum-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where CIT(A) had categorically given a finding in his order that the addition had been ultimately made only on an estimated basis by placing reliance on various decisions, it cannot be said assessee had concealed income or furnishes inaccurate particulars of income and therefore, no penalty could be levied under section 271(1)(c).
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Penalty under section 271(1)(c) - Leviability - Addition on estimated basis -
Assessee made certain purchases of raw materials and had made corresponding sales thereon and in order to purchase peace, came forward to offer 5% as its profit margin in these transactions. AO levied penalty under section 271(1)(c) on this taxed sum, whereas CIT(A) had categorically given a finding that the addition had been ultimately made only on an estimated basis. Held: The CIT(A) had categorically given a finding in his order that the addition had been ultimately made only on an estimated basis by placing reliance on the decision of Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd., in ITA No. 1097/2009 dt. 25/01/2010 : 2010 TaxPub(DT) 1381 (Del-HC); on the decision in the case of Chhattisgarh CIT v. Vijaykumar Jain dt. 19/4/2010 : 2010 TaxPub(DT) 1839 (Chhattisgarh-HC); decision of Gujarat High Court in the case of CIT v. Subhash Trading Co. 221 ITR 110 : 1996 TaxPub(DT) 0591 (Guj-HC); decision of Hon'ble Punjab and Haryana High Court in the case of CIT v. Harigopal Singh (2001) 255 ITR 85 (Guj) : 2002 TaxPub(DT) 0238 (Guj-HC); and the decision of Rajasthan High Court in the case of CIT v. Mahendra Singh Khedla in ITA No. 174/2010 : 2012 TaxPub(DT) 2850 (Raj-HC), that no penalty under section 271(1)(c) could be levied on an estimated addition and accordingly, CIT(A) deleted the penalty. Thus, no infirmity could be found in the said order of CIT(A) deleting the penalty on an estimated addition.
Followed:CIT v. Mahendra Singh Khedla ITA No. 174/2010 : 2012 TaxPub(DT) 2850 (Raj-HC) CIT v. Vijay Kumar Jain 2010 TaxPub(DT) 1839 (Chhattisgarh-HC) CIT v. Aero Traders (P) Ltd. ITA No. 1097/2009 dt. 25/01/2010 : 2010 TaxPub(DT) 1381 (Del-HC) CIT v. Atul Products Ltd. (2001) 255 ITR 85 : 2002 TaxPub(DT) 0238 (Guj-HC) CIT v. Subhash Trading Company (1995) 221 ITR 110 (Guj) : 1996 TaxPub(DT) 0591 (Guj-HC).
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2011-12
IN THE ITAT, MUMBAI BENCH
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