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TMI Blog2013 (12) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 28-2-2013 - Shailendra Kumar Yadav and R K Panda, JJ. For the Appellant : Shri J P Bairagra For the Respondent : Smt S Praveena ORDER:- Per: Shailendra Kumar Yadav: Both these appeals filed by the Revenue pertain to same group on similar issues for same year. So they are being disposed off by common order for the sake of convenience. The Revenue has filed these appeals arising out of common order of the CIT(A) on the following grounds: 1. Whether on the facts and circumstances of the case the CIT(A) is correct in deleting the penalty order which was based on the evidences of unaccounted production found during the course of search action. 2. On the facts and in the circumstances of the case, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants. On perusal of the facts of the cases, it has been observed as under (i) The A.O. has made addition on account of suppressed production and sale due to inconsistency in electricity consumption in various months. The CIT(Appeals) while deciding quantum appeals for year under appeal has rejected this basis on which the A.O. has made the addition and held that the statistical formulae based on electricity consumption to estimate suppressed turnover, resulted in abnormally high pitched assessment. ( (ii) The seized papers showing alleged suppressed sale on 15th 16th March were found in bedroom at residential premises of Shri Surendra Peety and not at the factory premises or office of the appellant. In the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hilt, particularly in view of the ratio laid down in the case of Padamchand Jain [IT(SS) No.293/Hyd./1997 dated 17/01/2001] Hyderabad ITAT relied on by the appellant in quantum appeal proceedings. The observation of Hon'ble ITAT as appearing in the order of CIT(Appeals), Nagpur on page No. 2 7 is as under - "..... But the case of this huge turnover is not supported by any other materials/information collected in the course of search. There is no case of any corresponding cash, bullion, asset, investment or expenditure commensurate to this alleged huge amount of unaccounted turnover. There is no evidence on record to shown that the appellant has destroyed any secret slips in anticipation of the search. In view of the above pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any unexplained outgoings out of the said additions. 6.1 In view of the above observations, submission of the appellant and ratio laid-down by the decisions relied on by the appellants, I am of the considered view that penalties u/s 271(1)(c) cannot be levied in respect of estimated additions made on the basis of certain presumptions. The A.O. is, therefore, directed to cancel the penalty of Rs.70,66,904/- and Rs.7,92,074/-levied u/s 271(1)(c) of the Act in the cases of Shri Om Rolling Mills Pvt. Ltd. and SRJ Peety Steel Pvt. Ltd. respectively. Ground Nos.5, 6 7 on merits of the case stand allowed. 4. Stand of the Revenue before us is that penalty order was based on the evidence of unaccounted production found as a result of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared as additional income. The said income has been declared in the return of income filed by Shri Surender Peety for A.Y. 2006-07. 6. The CIT(A) has estimated the suppressed sale and gross profit and made addition on estimate basis. Normally the penalty cannot be levied on estimated income alone. Since the quantum additions have attained finality. So issue has to be decided within the parameters of provisions of section 271(1)(c) alone. It is not in dispute that assessee has not credited the additions of Rs.2,09,94,965/- and Rs.23,53,160/- in case of Shree Om Rolling Mills Pvt. Ltd., and SRJ Peety Steels Pvt. Ltd., respectively in their respective books of accounts or have not explained any unexplained outgoing of the said additions. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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