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TMI Blog2016 (7) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on the addition which has been made on estimate basis and also keeping in view the fact that there is no uniformity even on the estimation. Thus, penalty levied on this addition is directed to be deleted. Addition u/s 69C - low household withdrawal for personal expenses - HELD THAT:- Addition has been reduced by the Tribunal to ₹ 40,000. In this case also, we find that pure guess work has been adopted by the lower authorities in making this addition. Thus, we do not find justification for levy of penalty in this case also and penalty levied on the same is directed to be deleted. Addition of interest - assessee had used borrowed funds for giving loan to M/s Shreekar Polyester Pvt Ltd and though assessee had earned interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countant Member) Appellant by Shri B.P. Purohit Respondent by Shri Rajesh Ojha ORDER Ashwani Taneja, AM This appeal has been filed by the assessee against the order of Commissioner of Income-tax (Appeals) [hereinafter called CIT(A)] dt 28- 03-2014 passed against the penalty order u/s 271(1)(c) of the AO dt 30- 03-2009 for A.Y. 2003-04 on the following grounds: 1) On the facts and in the circumstances of the case and in law, the appellate authority i.e. The CIT (A) 25, Mumbai, has erred in sustaining penalty u/s 271(1)( c) without appreciating that no such penalty can be sustained in the case of the appellant. The said penalty may therefore kindly be deleted. 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8%; the Tribunal reduced the same further to 7%. It has been submitted by the ld. Counsel that detailed working was submitted to AO which have not been properly considered by him and while estimating the GP, valuation of opening stock and closing stock have not been properly taken into consideration. It was further submitted that detailed working was submitted to the Tribunal also which has not been considered by the Tribunal, too. It was further submitted that in any case, this addition was made purely on estimate basis. 5.1 We have considered the orders of the lower authorities as well as the order of the Tribunal and submissions made by both the sides. It is noted that this addition has been made by making estimate at all stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan to M/s Shreekar Polyester Pvt Ltd and though assessee had earned interest income from the said party, the same was not assessable as business income. The Tribunal reduced the same to ₹ 133,500 with following reasonings: 7. The next issue contested by the assessee relates to the disallowance made out of interest expenditure to the tune of ₹ 2,67, 127/-. From the perusal of the Balance sheet, the AO noticed that the assessee has increased his borrowings and also increased his investments in a sister concern named M/ s Shreekar Polyester Pvt. Ltd. The assessee contended that the withdrawals made from his personal account was used to make investment in the above said concern. The AO considered the submissions of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld CIT(A) on this issue stands modified accordingly. (a) The Tribunal has noted at paragraph 8 that the Assessing Officer had worked out the interest disallowance on estimate basis. The Tribunal also made estimate to restrict the disallowance on adhoc basis to 50% of the disallowance made by the Assessing Officer. Thus, the disallowance made is purely on estimate basis and does not amount to any type of concealment of income. (b) The assessee has earned interest income from M/s Shreekar Polyester Pvt td for ₹ 7.02 lakhs which has been shown as part of business income. The interest expenditure incurred on funds borrowed had been claimed as part of business expenses. Thus, assessee has claimed set off of the expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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