9911796707
TMI Blog2018 (12) TMI 1588X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals), while allowing partial relief by directing application of net profit rate of 6.75%, has not given any cogent reason for arriving at this percentage. Thus, the net profit rate, as directed to be applied by the CIT (Appeals), is just an estimate without having any sound basis as the past financial results of the assessee have not been duly considered. It is settled law that penalty for furnishing inaccurate particulars of income can neither be imposed nor sustained on enhancement of net profit rate based on an estimate. The Hon'ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd [2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis - Thus no penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (Appeals), Muzaffarnagar for assessment year 2006-07 wherein, vide the impugned order, the Ld. CIT (Appeals) has partly confirmed the penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). ITA No. 4104/Del/2015 is the assessee s appeal for assessment year 2009-10 and is preferred against the order dated 11.03.2015 passed by Ld. CIT (Appeals), Ghaziabad. Both these appeals were heard together and for the sake of convenience, they are being disposed of through this common order. 2.0 Brief facts of the case are that for assessment year 2006-07, the return of income was filed declaring income of ₹ 14,63,340/- and the turnover declared by the assessee was ₹ 4,79,88,247/-. The assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. 3.0 Arguing against the upholding of penalty, the Ld. AR submitted that the penalty had been imposed on addition based on estimation of profit without bringing on record any defect in the method of accounting followed by the assessee. It was submitted that no penalty u/s 271(1)(c) is imposable in case where the net profit is estimated. 4.0 In response, the Ld. Sr. DR placed reliance on the concurrent findings of both the lower authorities and also drew attention to the fact that the books of accounts had been rejected by the Assessing Officer and, therefore, the penalty had been rightly imposed. 5.0 With respect to assessee s appeal for assessment year 2009-10, the Ld. AR assailed the order of the Assessing Officer by submittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not prefer further appeal after the Ld. CIT (Appeals) reduced the net profit estimation rate from 8% to 6.75%, the fact remains that this is an estimate of profit and the Ld. CIT (Appeals), while allowing partial relief by directing application of net profit rate of 6.75%, has not given any cogent reason for arriving at this percentage. Thus, the net profit rate, as directed to be applied by the Ld. CIT (Appeals), is just an estimate without having any sound basis as the past financial results of the assessee have not been duly considered. It is settled law that penalty for furnishing inaccurate particulars of income can neither be imposed nor sustained on enhancement of net profit rate based on an estimate. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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