2024 (8) TMI 1295 - AT - Income Tax

Penalty u/s 271(1)(c) - Addition of commission income - HELD THAT - Though earning of alleged commission income by providing accommodation entry in itself is a doubtful activity, but AO has not doubted this activity. He has accepted the alleged commission income of the assessee in providing accommodation entry of huge sum of Rs. 78.9 crores. He only made changes that instead of half percent, it should be 1% of commission income. The assessee should have earned in this activity. To our mind, the income of the assessee has been revised on an estimate basis, which is based on difference of opinion without any scientific method. Therefore, on such an issue the AO as well as by the ld. CIT(Appeals) should have not been visited the assessee with penalty. Appeal of the assessee is allowed.

Summary

The Appellate Tribunal ITAT Kolkata allowed the appeal of the assessee against the penalty imposed under section 271(1)(c) of the Income Tax Act for Assessment Year 2012-13. The Tribunal held that the penalty was not justified as the income was revised on an estimate basis without scientific method. The penalty of Rs. 1,99,911/- was deleted.