2014 (7) TMI 1108

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..... basis of order passed u/s 143(3) dated 20/11/2008. But Ld. A.O. failed to specify in the notice the nature of default i.e. concealment of income or furnishing of inaccurate particulars of income.     3. That penalty imposed on the basis of lump sum trading addition on rotational sale. But the rotational sale were also calculated on estimated basis. Inventories prepared at the time of survey was in the absence of any responsible person. Hence persumption of rotation sale is one assumption and presumption.     Without prejudiced to above and in the alternative.     4. (a) That on the fact and in the circumstances of the case the Ld. AO erred in imposing penalty more than 100% of the tax alleged .....

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..... ssing Officer did not accept the submissions of the assessee and levied the penalty of Rs. 83,000/-. The said penalty was confirmed by the Ld. CIT(A). Now the assessee is in appeal. 4. Learned counsel for the assessee submitted that the assessee neither concealed the income nor furnished inaccurate particular of income. The addition made by the Assessing Officer was on estimate basis without bringing any material on record to substantive that the assessee concealed the income or furnished inaccurate particulars of income. Therefore, the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) was not justified. Reliance was placed on the following case laws:-     1. Verma Tractors Vs. ACIT reported at (2007) .....

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..... of stock during the course of survey, therefore, difference on account of estimation of stock, in my view, at least penalty should not have been levied. Accordingly, I cancel the levy of penalty. 7. On a similar issue, the Hon'ble Jurisdictional High Court in the case of CIT Vs. Krishi Tyre Retreading & Rubber Industries reported at (2013) 95 DTR (Raj.) 376 has held as under:-       "The addition has been sustained purely on estimate basis and no positive factor finding has been found so as to even make the said addition. It is a pure guesswork and on such guesswork, no penalty under section 271(1)(c) can be said to be leviable. For imposing penalty under section 271(1)(c), the AO has to clearly prove the cond .....

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