TMI Blog2013 (12) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Shri Rajarshi Dwivedy For the Respondent : None ORDER Per B.R.Mittal, JM:- The department has filed this appeal for assessment year 2005-06 against order dated 18.7.2011 of ld CIT(A) on following ground: "On the facts and in the circumstances of the case and in law, ld CIT(A) erred in deleting the penalty levied u/s.271(1)(c) amounting to Rs.40,90,232/- ignoring the fact that the assessee admittedly failed to prove the genuineness of the expenses claimed and its relation with the business which amounts to filing of inaccurate particulars of income." 2. The relevant facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that assessee has shown gross turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on order of AO. 6. We have considered the submission of ld D.R. and order of ld CIT(A). We observe that AO levied the penalty u/s. 271(1) (c) on account of addition made by estimating G.P @ 15% though the Tribunal vide its order dt.7.5.2010 estimated G.P. @ 8%. Ld CIT(A) deleted the penalty vide para 4 of the impugned order which reads as under:- "4. I find that there is no case for levying penalty u/s 271(1)(c) in the instant case. Otherwise also it is a settled law that penalty u/s 271(1)(c) is not automatic simply because certain expenses are disallowed or additions are upheld. Nevertheless, the rejection of any claim that appears to be bon-a-fide cannot lead to a situation where penalty u/s 271(1)(c) can be imposed in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overt the facts reasoning as given by ld CIT(A). We are of the view that considering the totality of facts and more so in the present case that addition has been made on estimated basis, no penalty should have been levied. The Hon'ble Madras High Court has held in the case of Commissioner of Income-tax v. Smt. K. Meenakshi Kutty, 258 ITR 494(Mad) that no penalty u/s.271(1)(c) could be levied on account of estimate made by the AO was higher than the estimate of income of the assessee as the estimate given by the assessee was not the result of any gross or wilful negligence. In the case before us also, we observe that AO made estimated G.P. @ 15% which was reduced by the Tribunal to 8% as against 5.23% shown by the assessee. We are of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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