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TMI Blog2018 (1) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the addition only to the extent of 25% of purchases made from such parties instead of disallowing entire purchases from those parties. When the AO has not given any finding of bogus purchases then the disallowance made by the AO is only based on estimation which was restricted by this Tribunal as reasonable estimated. Accordingly, the issue of levy of penalty u/s 271(1)(c) of such addition is now covered by case of CIT vs. Mahendra Singh Khedla [2012 (3) TMI 568 - RAJASTHAN HIGH COURT]. - Decided in favour of assessee. - ITA No. 668/JP/2016 - - - Dated:- 8-1-2018 - Shri Vijay Pal Rao And dr. Arjun Lal Saini, JJ. Assessee by: Shri Rajeev Sogani (C.A.) Revenue by: Shri P.P. Meena (J.CIT) ORDER Vijay Pal Rao, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though confirmed the levy of penalty however, the order was modified to extent of the relief granted by this tribunal in the quantum proceedings. 4. Aggrieved by the impugned order, the assessee has filed the present appeal before us. 5. The ld. AR of the assessee has submitted that the penalty levied u/s 271(1)(c) is based on the addition made by the AO on estimation basis without giving a finding that the assessee has actually inflated the claim of purchase. Thus, the AR has contended that no penalty can be levied when the income of the assessee was assessed an estimate basis. He has relied upon a decision of Hon ble Jurisdictional High Court in case of CIT vs. Mahendra Singh Khedla [2012] 252 CTR (Raj.) 453 (Raj HC). 6. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in case of CIT vs. Mahendra Singh Khedla(supra). The Hon ble High Court while considering the issue of levy of penalty arising from the addition based on estimation in para 6 to 8 as under:- 6. We have considered the submissions of learned counsel for appellant and examined the reasons assigned by Appellate Authority as well as Appellate Tribunal for setting aside the penalty order. 7. The appellate authority as well as the appellate Tribunal both considered the matter in detail and by speaking order set aside the penalty levied by Assessing Officer, in the facts and circumstances of the present case. The relevant portion of Para 7 of order of the Tribunal is reproduced as under:- Para 7. .....The enquiry conducted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd estimated the trading addition on the basis that the assessee had not maintained site-wise account, no head-wise details of claimed purchases were furnished, no separate head of expenses was maintained, work in progress was not declared, some wages were shown outstanding without complete details of creditors, stock register was not maintained and misc. expenses on water transportation etc. were not verifiable and purchase vouchers of sand, steel, bajri etc. were self made etc. Assessee explained reasons for the above defects which were not accepted by the AO as not found satisfactory. The AO accordingly made estimation. The circumstances suggest that it may be just and proper case of making estimated trading addition but an inference the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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