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TMI Blog2017 (2) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... which were accepted in 2005-06 - Assessee submitted that assessee had provided all the details available Assessing Officer. Hence, Assessing Officer cannot state that assessee failed to substantiate the claim. So, the deduction claimed by assessee is requested to be allowed. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Hema R. Gupta and Shri Nilesh Rakesh Kumar Gupta in ITA.No.2639/Mum/15 and ITA No.2638/Mum/15 wherein the similar kind of penalty has been deleted by the tribunal. The tribunal hs deleted the penalty by observing as under:- 5. We have heard the rival submission and also carefully perused the material placed on record including the cases relied upon, in the light of the respective contentions of the parties. We notice that in quantum appeal ITA Nos. 5011 and 5018/Mum/2014 sought assessment years 2002-03 to 2009-10, the coordinate bench vide order dated 14 / 09 / 2016, following the decision rendered in the case of Sanjay Kumar Garg versus ACIT (2011) 12 taxmann.com 294 (Delhi) and the decision rendered by the coordinate bench in the case of gold star Finvest (P) Ltd versus ITO (2013) 33 taxmann.com 129 (Mumbai tribunal) held that addition of 0.6%. of turnover is reasonable. The relevant portion of the order reads as under:- "6.1 We find that Tribunal in case of Sanjay Kumar versus Garq vs. ACIT (supra) held that rate of commission cannot be more than 1 %, but in present case, the assessee had already offered the same for taxation. purpose but with rider of allowability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We hold so." 6. Admittedly, the AO had levied penalty in question under section 271 (1) (C) of the Act on the addition made on the basis of estimation and the basis of estimation was further changed substantially by the Tribunal in quantum appeal. As per the settled law penalty proceedings are different from assessment proceedings because the standard of proof required for imposition or penalty is different from that on which an addition could be maintained. Mere addition to the income of the assessee does not mean that the assessee has concealed In Naresh Chand Aganual vs. CIT(2013)38 taxmann.com 397 Hon'ble Allahabad High Court has held that when addition is made on estimate basis, penalty under section 271(1)(c) cannot be imposed. The Hon'ble Punjab & Haryana High Court in case of Harigopal Singh Vs. Commissioner of Income Tax reported in (2002) 125 Taxmari 242, wherein the estimated addition made by the AO was considerably reduced by the Tribunal, has held that in such cases, provisions of section 271 (1 )(c) of the Act are not attracted. The same view have been taken by the ITAT Chandigarh in JCIT v. Bhagwan Dass Gorg (2014) 48.taxmann185 (Chandiqarh-Trib), Jodhpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 19. Other issue in ITA No.5033/Mum/2014 for A.Y. 2006-07 is with regard to deduction of Rs.l ,40,00,000/ - advance given to Madanlal Begrecha. Learned Authorized Representative submitted that Assessing Officer has disallowed the deduction on ground that assessee had not substantiated the claim. But, Assessing Officer failed to consider that loans are opening balance which were accepted in 2005-06 and further to substantiate the claim assessee vide submission dated 06.12.2010 stated as under (Refer Page No.98 of paper book of A.Y.2006-07): "8. I had taken home loan from Standard Chartered Bank and G E Financial. I have claimed it correctly and best of my knowledge. I am sending the sanctioned letter issued by the above mentioned bank with this letter. The loan account Number and loan details are mentioned on it. The bank Certificate and interest certificate are in the documents impounded by your department. I would like to request you to collect it from there itself. The housing loan taken is not wrongly claimed and is in the preview of income tax act, 1961, so cants be disallowed." 19.1 Assessee submitted that assessee had provided all the details available Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed by the Tribunal at ₹ 2 lakhs as a business loss. The view taken by the Tribunal was sustained by Hon'ble High Court by taking an emotional and moral approach rather than a legal approach. In appeal, Hon'ble High Court observed that assessee was committing a highly immoral act in illegally manufacturing and selling heroin. However, cases were to be decided by the Court on legal principles and not on one's own moral views. The Explanation to section 37 of the Act has really nothing to do with the instant case as it was not a case of business expenditure; but of business loss. Business losses were allowable on ordinary commercial principles in computing profits. Once it was found that heroin seized formed part of stock in - trade of assessee, it followed that the seizure and confiscation of such stock-in-trade had to be allowed as a business loss. Loss of stock-in-trade has to be considered as a trading loss. Consequently, the impugned decision of Hon'ble High Court could not be sustained and was set aside and order of Tribunal was restored. Facts being similar, so, taking all facts and circumstances into consideration, we hold that addition of Rs.l ,40,00, ..... 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