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TMI Blog2015 (12) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... of 18.50% as against 18.02% declared by the assessee. Therefore, it is seen that in the present case, the A.O. has made the impugned addition without reference to any evidence/material being on record. Hence, by respectfully following this judgment of the Hon’ble Allahabad High Court in Sushil Kumar Sharad Kumar [1997 (9) TMI 76 - ALLAHABAD High Court] we hold that in the facts of the present case, levy of penalty on estimated addition is not justified and therefore, we delete the penalty. - Decided in favour of assessee. - ITA No.938/LKW/2014 - - - Dated:- 31-8-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : None For The Respondent : Smt. Pinki Mahavar, D.R. ORDE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hearing was adjourned to 27.07.2015 and the notice of hearing was sent to the assessee by RPAD on 10.07.2015. The Notice has not come back unserved and hence, service of notice is presumed. None appeared on behalf of the assessee on the appointed date of hearing i.e. 27.07.2015 and therefore, the appeal was heard ex-parte qua the assessee. Ld. DR of the Revenue supported the orders of the authorities below. 4. We have considered the submission of Ld. DR of the Revenue and gone through the orders of the authorities below. 5. Issue in dispute was decided by the Ld. CIT (A) as per Para 3.2 of his order, which is reproduced below for the sake of ready reference:- 3.2 The findings of Ld. AO and the submissions of the Appellant hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court by making this observation that in deciding whether penalty can be imposed in a given case, the entirety of the circumstances must be taken into account. It was also held that in a case, where additions has been made purely on estimate without reference to any evidence/material being on record, in such case, it could be argued with some force that penalty cannot be levied on the figures which are merely based on guess work or estimate. But in a case, where after a detailed investigation, the assessee was confronted with the evidence/materials and he failed to dislodge the factual position on the basis of which additions were made, the case stands on a different footing. In such a case, it is always open to draw an inference of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced. There was one more objection of the AO that day to day stock inventory of raw material and other consumable item was not maintained. On the basis of these general objections, the AO made addition by adopting higher G.P. rate of 18.50% as against 18.02% declared by the assessee. Therefore, it is seen that in the present case, the A.O. has made the impugned addition without reference to any evidence/material being on record. Hence, by respectfully following this judgment of the Hon ble Allahabad High Court, we hold that in the facts of the present case, levy of penalty on estimated addition is not justified and therefore, we delete the penalty. Regarding other three judgments followed by CIT (A), we want to observe that when the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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