Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 749 - ITAT DELHIPenalty u/s 271(1)(c) - failure to prove that loan was taken - dis-allowance of certain expenditures - estimation of GP rate - Held that:- On appreciation of the facts including the GP rate declared for the earlier years, Ld. CIT(A) thought it fit to adopt the GP rate of 9% giving some margin for the increase in turnover and on that premise, CIT(A) deleted the addition to the extent of ₹ 6,57,641/-and confirmed the addition to the extent of ₹ 2,87,543/-. All this is subjective exercise done by the authorities and as a matter of fact, as rightly observed by the 1st appellate authority in the quantum appeal there is no basis for the learned Assessing Officer to estimate the GP rate at 12%. At the same time CIT(A) also sustained a portion of the addition by adopting the GP rate at 9% by making reference to the GP rate in the earlier years, increase in the sundry creditor or liability and also in the turnover. All the circumstances suggest that the addition has no relation either to concealment of income or furnishing of inaccurate particulars thereof. In order to attract the provisions of Section 271(1)(c) there must be an allegation that there was concealment of income or furnishing of inaccurate particulars thereof, in the absence of which we find it difficult to sustain the penalty on this score. No penalty could be levied on the difference resulted due to adoption of different GP rates made on estimate basis. Coming to the levy of penalty on account of confirmation of addition of loan received from Smt. Bindu Sharma who was drawing salary from the assessee company and the wife of the director, is concerned there is no dispute as to the identity of Bindu Sharma and the learned Assessing Officer never doubted the same. Addition was made on the ground that the source of Bindu Sharma was not proved. Insofar as the identity and genuineness of Smt. Bindu Sharma is not in dispute.Merely because an addition is made by disbelieving her capacity to lend the loan.Such a fact, ipso facto, does not lead to the levy of penalty. We find it difficult to sustain the penalty levied in respect of the additions made either on estimate basis, or by disallowing some expense, or on the ground that this source of the capacity of the creditor was not proved. We, therefore, find that the levy of penalty cannot be sustained and the same has to be quashed. We, accordingly, direct the learned Assessing Officer to delete the penalty. - Decided in favour of assessee.
|