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TMI Blog2016 (7) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... mate basis cannot be put into the category of concealed income by any stretch of imagination. AO made the addition because in his opinion, the GP of the assessee was to be estimated at a particular percentage. The opinion of the AO was purely subjective and discretionary and without any concrete basis. Under these circumstances, no penalty can be levied, as per law. In this regard, we find support from the judgement of Hon ble Bombay High Court in the case of CIT vs Upendra V Mithani [2009 (8) TMI 1159 - BOMBAY HIGH COURT] . Thus, in view of the aforesaid legal position and facts of the case, we find that penalty in this case is unjustified and the same is directed to be deleted - I.T.A. No.7473/Mum/2011 (Assessment Year: 2007-08) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not file any appeal against the assessment order. Subsequently, the Ld. AO initiated penalty proceedings wherein assessee replied that assessee had offered additional income of ₹ 10.5 lakhs only for payment of tax on voluntary basis and the assessee did not make this offer for levy of penalty as well. However, the AO was of the opinion that assessee was following incorrect system of accounting and was disclosing lesser income, and therefore, he levied penalty of ₹ 3,60,200/- on the addition of ₹ 10.5 lakhs. 4. Being aggrieved, assessee filed appeal before Ld. CIT(A) wherein arguments made before the AO were reiterated and it was also submitted that assessee was carrying on two projects during the year, one at G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has been consistently following percentage of completion method since last so many years. In A.Y. 2004-05, the AO had made addition by estimating the GP at 15%. The matter reached before the Tribunal wherein the Tribunal deleted the addition on the ground that since the assessee was following this system consistently which is supported by duly maintained books of account and in absence of any defects having been brought out in the books of accounts and without rejecting the books of account, no addition could have been made. It is further noted that in A.Y. 2001-02 also the assessment order was passed u/s 143(3) wherein method of accounting followed by the assessee was accepted and no addition was made. Further, the assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) of the I.T. Act. The Tribunal has concurred with the view taken by the Commissioner of Income Tax (A). The Commissioner of Income Tax (A) has rightly taken a view that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The view taken by the Tribunal is a reasonable and possible view. The appeal is without any substance. The same is dismissed in limine with no order as to costs. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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