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TMI Blog2015 (1) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (2013 (11) TMI 14 - SUPREME COURT). Besides WIP stock addition leads to increase in the opening stock of next year. We are of the view that decisions of Hon'ble Supreme Court in the cases of CIT vs. Reliance Petro Products (P) Ltd. (2010 (3) TMI 80 - SUPREME COURT) and Hindustan Steel Ltd. vs. State of Orrisa (supra) are squarely applicable to the assessee case Therefore, in the facts and circumstances of the case, we are inclined to delete the penalty imposed u/s 271(1)(C) by the lower authorities. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, even the sales are not verifiable nor the expenses can be said to be completely vouched or verifiable. Thus, considering the facts, the gross sales are estimated at ₹ 9865000/- enhancing the declared receipts of ₹ 9365000/- by ₹ 5 lakhs. On the estimated gross receipts net profit rate of 12.5% is applied. This gives the net profit of ₹ 1233125/-. The assessee has already disclosed the net profit rate of ₹ 980282/- in the return. Thus the addition of ₹ 252843/- is made to the total income of the assessee to cover up the discrepancies in the construction of business.'' 2.2 Consequent to additions, penalty proceedings were initiated u/s 271(1)© of the Act. The assessee defended the same contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon'ble Rajasthan High Court in the case of CIT vs. Krishi Tyre Retreading and Rubber Industries (ITA No. 542/2008 dated 19-09-2013) where on the similar facts and circumstances, ITAT Jaipur Bench deleted the penalty. In departmental appeal, the Hon'ble High Court held that no substantial question of law arose. 2.6 The ld. Counsel for the assessee reemphasized the judgement of Hindustan Steel Ltd. vs. State of Orrisa (supra) for the proposition that penalty cannot be imposed for technical and venial breach. In this case, the assessee's books of account are duly audited as per Companies Act and Income-tax Act, The expenditure in respect of the assessee's business was incurred at various sites. Sometimes, in asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses are incurred at various sites. The additions are as a result of estimation based on assessee's efforts to get the proceedings settled with a pertinent request to make reasonable addition. The assessee no where agreed for rejection of books and same does not amount to un-quantified surrender in terms of facts of Mak Data (P) Ltd. vs. CIT (supra). Besides WIP stock addition leads to increase in the opening stock of next year. We are of the view that decisions of Hon'ble Supreme Court in the cases of CIT vs. Reliance Petro Products (P) Ltd. (supra) and Hindustan Steel Ltd. vs. State of Orrisa (supra) are squarely applicable to the assessee case Therefore, in the facts and circumstances of the case, we are inclined to delete t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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