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TMI Blog2020 (4) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the show cause, the assessee stated that no penalty is leviable on addition made on estimation of income and relied upon the decision of Jodhpur Tribunal in ITO vs. Gurunanak Oil Agency [ 2013 (3) TMI 718 - ITAT JODHPUR]. The contention of assessee was not accepted by Assessing Officer. The Assessing Officer levied the penalty @ 100% of the tax sought to be evaded. The ld. CIT(A) affirmed the action of Assessing Officer. There is no dispute that addition on which penalty was initiated was based on estimation basis. The addition was further reduced by Tribunal by allowing administrative and other expenses and estimated the profit @ 225/- per piece/per Mixer Grinder. It is settled position that no penalty is leviable on adhoc/estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash deposit in the bank account of the assessee with State Bank of India. The assessee was asked to substantiate the cash deposit. In response to the show-cause, the assessee stated that he has sold 1500 Mixer Grinder at the profit margin of ₹ 300/- per piece and has offered the said amount for taxation. The contention of assessee was not accepted by Assessing Officer, the Assessing Officer added profit on sale of 1500 Mixer Grinder and added a sum of ₹ 4,50,000/- to the income of assessee. On appeal before the ld. CIT(A), the addition was upheld. However, on further appeal before the Tribunal, the addition was restricted to ₹ 3,37,500/- by adopting Net Profit on sale of Mixer Grinder at ₹ 225/- per piece. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er/per piece, thus admittedly the addition is on adhoc basis. It is settled law that no penalty is leviable on addition made on estimation basis. 5. On the other hand, the ld. DR for the revenue supported the order of Assessing Officer. It is settled position under the law the no penalty under section 271(1) is leveable on estimated additions made in the assessment order. 6. We have considered the submission of both the parties and perused the material available on record. There is no dispute that the Assessing Officer initiated and levied the penalty only on the addition made on account of profit margin on sale of Mixer Grinder. The Assessing Officer estimated the profit @ ₹ 300/- per piece on sale of 1500 Mixer Grinder. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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