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TMI Blog2017 (1) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of manufacturing, processing and marketing of seeds use for agricultural, as well as nonagricultural purposes. A search action u/s. 132 of the Act was carried out in the case of Mulay Group on 10-10-2007. The assessee is part of Mulay Group. During the course of search action physical inventory of stock at factory premises was carried out. During search and post search proceedings shortage of stock to the tune of Rs. 8,75,509/- was found. Part of shortage of stock was set off against the excess stock found in the case of M/s. Ajeet Seeds Ltd., a sister concern of the assessee. Further, during search at office premises of Ajeet Seeds Ltd. noting regarding investment in the form of advance to the tune of Rs. 5,11,000/- were fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings have been made on estimations. Penalty and assessment proceedings are two distinct and independent proceedings. Every addition in assessment does not necessarily result in levy of penalty. The ld. AR further stated that he would not be pressing additional ground raised in the appeal although in the present case assessment has been wrongly made under the provisions of section 143(3) r.w.s. 153A of the Act. 4. On the other hand Shri Anil Chaware representing the Department vehemently supported the order of Commissioner of Income Tax (Appeals) in confirming the levy of penalty u/s. 271(1)(c) of the Act. The ld. DR pointed that during assessment proceedings the assessee had admitted that advance as noted in the seized document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed for addition. Addition on the basis of estimation may be sustainable in assessment proceedings but criterion and yardstick for imposing penalty u/s. 271(1)(c) of the Act are different from these applied for making the additions. It is a well settled law that no penalty u/s. 271(1)(c) should be levied where additions are made on estimations. Further, no penalty u/s. 271(1)(c) can be levied merely on the ground that the assessee has agreed for the addition. 7. We find that similar view was taken by the Mumbai Bench of the Tribunal in the case of ITO Vs. C. Chhotolal Textiles (P.) Ltd. reported as 95 TTJ 436. In the said case, during survey discrepancy in stock was found on physical verification. The assessee agreed for the addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex Court in [2001] 251 ITR 99 (SC) (supra) shall be applied being later in time than the decision of Hon'ble Apex Court in [2001] 251 ITR 9 (SC) (supra) for the reason that both the decisions of the Hon'ble Apex Court were declared on different grounds. We are also not impressed with the argument of the learned Departmental Representative that the decision of the Hon'ble Apex Court in [2001] 251 ITR 9 (SC) (supra) does not lay down any law. The Hon'ble Apex Court has delivered this judgment in civil appeals after considering all the facts and circumstances of the case and after reading the High Court order and the statement of the case. We hold that the decision of Hon'ble Apex Court in Suresh Chandra Mitta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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