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2007 (5) TMI 281 - ITAT LUCKNOW-APenalty imposed u/s 271(1)(c) - Concealment or furnished inaccurate particulars of its income - Difference between income returned and income assessed by AO and Confirmed by the CIT(A) - HELD THAT:- In the case of Mansukh Dass Soni vs. Asstt. CIT [2006 (1) TMI 200 - ITAT JODHPUR], the SMC Bench of Tribunal, held that in order to bring a case within the ambit of penalty u/s 271(1)(c) of the IT Act, 1961, the mere sustenance of addition is not sufficient. The additions which are based on estimates or disallowances etc., or which do not conclusively show that assessee had concealed his income or furnished inaccurate particulars of income, could not constitute basis for imposition of penalty u/s 271(1)(c) of the IT Act, 1961. Reliance placed by the Revenue on the decision of the Hon'ble Supreme Court of India in the case of K.C. Builders vs. Asstt. CIT [2004 (1) TMI 7 - SUPREME COURT] is of no help to the case of Revenue. In fact, there is no material on record to show that assessee has consciously made concealment or furnished inaccurate particulars of its income. There is no dispute that gross receipt of Rs. 1,63,53,985 shown by the assessee has been accepted by the Department. In our view, merely (because) books of account of the assessee were rejected, it could not be held that assessee was guilty of fraud or gross or willful neglect. Therefore, the decision of Hon'ble Supreme Court of India in the case of K.C. Builders vs. Asstt. CIT is not applicable to the facts of the present case. In the result, we cancel penalty of Rs. 1.50 lakhs imposed by the AO and confirmed by the learned CIT(A) and allow appeal of the assessee.
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