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TMI Blog2019 (4) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... dition, no penalty is to be levied in view of the decision of the Hon’ble Jurisdictional High court in COMMISSIONER OF INCOME-TAX VERSUS KRISHI TYRE RETREADING AND RUBBER INDUSTRIES [2014 (2) TMI 21 - RAJASTHAN HIGH COURT]. Considering the totality of facts and circumstances of the case we direct the A.O. to delete the penalty so imposed on the estimated addition so made. - ITA No. 295/JP/2014, ITA No. 910/JP/2016 - - - Dated:- 8-4-2019 - Shri Ramesh C Sharma, AM And Shri Vijay Pal Rao, JM For the Assessee : Shri Manish Agarwal (CA) For the Revenue : Shri A.S. Nehra (JCIT) ORDER PER: R.C. SHARMA, A.M. Firstly we take ITA No. 295/JP/2014 This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 11/02/2014 for the A.Y. 2010-11 in the matter of order passed U/s 143(3) of the Income Tax Act, 1961 (in short, the Act). 2. In this appeal, the assessee is aggrieved for addition of ₹ 31,94,223/- made by the A.O. by applying G.P. rate @ 22.7% on unaccounted sales found during the course of survey at the premises of the third party. 3. Rival contentions have been heard and record perused. The facts in brief are that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather Shri Ghanshyam Agarwal, both the son are living together and managing the manufacturing and trading of Naveen Enterprises. No proprietary concern is in the name of Shri Sachin Agarwal. All the sales either in books of account or outside the books of account in related to Naveen Enterprises. Survey u/s 133A was also carried at the business premises of Naveen Enterprises by the department in financial year 2010-11. Sachin was managing the affair such as purchases and sales there. Shri Sachin has accepted in cross examination statement of Shri Vasudev Somani that he has received money through their bank accounts. Shri Sachin is elder son of Shri Ghanshyam Agarwal. Obviously, he will go for collecting the cash of unaccounted sales. From the statement of Shri Vasudev Somani, his cross examination by the ld. A/R of the assessee and acceptance of Shri Sachin Agarwal, it is clear that money of undisclosed sales of ₹ 1,40,71,468/- of Naveen Enterprises is received through bank account of Shri Vasudev Somani and his wife. This sale is not recorded in books of account for the year under consideration. Therefore, GP rate declared of 22.7% is applied on the undisclosed sales of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition made on account of unaccounted turnover was restricted to 10% to the profit on such undisclosed deposit in the bank account. 9. On the other hand, the ld DR has contended that as per the statement recorded during the course of survey and the subsequent enquiry made by the A.O. vis a vis subsequent survey at the business premises of the assessee, it is clear that the income on account of sales by depositing in the bank account of Shri Vasudeo Somani was belonging to the assessee, accordingly, the A.O. was very reasonable in estimating the profit @ 22.7% on such alleged unrecorded sales. He supported the findings recorded by both the lower authorities. 10. We have considered the rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the judicial pronouncements referred by the lower authorities in their respective orders as well as cited by the ld. AR and ld. DR during the course of hearing before us in the context of factual matrix of the case. 11. From the record we found that the amount received through the bank account of Shri Vasudev Somani and his wife of ₹ 1,40,71,468 has been added as unaccounted sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 in the matter of imposition of penalty U/s 271(1)(c) of the Act. 14. We have considered the rival contentions and carefully gone through the orders of the authorities below and found that with respect to the estimated addition made by the A.O. by applying G.P. rate @ 22.7% on the alleged deposit in the bank account, the A.O. has also imposed penalty U/s 271(1)(c) of the Act. BY the impugned order, the ld. CIT(A) confirmed the penalty order so passed by the A.O., against which the assessee is in further appeal before us. 15. The ld AR of the assessee has alleged that the penalty imposed u/s 271(1)(c) of the Act, have been levied arbitrarily without issuing a valid notice u/s 274 r.w.s. 271 of the Act as in the notice the limb for which the penalty proceedings were initiated was not specified. He has further contended that while initiating penalty u/s 271(1)(c) of the Act ld. AO in the assessment order at page 18 has recorded satisfaction and initiated the penalty proceedings for concealment of income , whereas in the penalty order the same has been levied for furnishing inaccurate particulars of income . Reliance was placed on the recent decision of the Hon ble ITAT Amrit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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