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TMI Blog2021 (3) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ot observe any infirmity in the order passed by the Ld. CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year. Grounds raised by the revenue are rejected. Appeal of the revenue is dismissed. - ITA No. 4642/MUM/2019 - - - Dated:- 5-3-2021 - C. N. Prasad , Member ( J ) And S. Rifaur Rahman , Member ( A ) Assessee by : None Department by : Shri Vijay Kumar Menon ORDER Per C. N. Prasad, JM 1. This appeal is filed by Revenue against order of the Learned Commissioner of Income Tax (Appeals)-20, Mumbai [hereinafter in short Ld. CIT(A) ] dated 30.04.2019 for the A.Y. 2009-10 in deleting the penalty levied u/s. 271(1)(c) of the Act made by the Assessing Officer. 2. Briefly stated the facts are that, assessee an individual filed return of income on 26.09.2019 declaring income of ₹ 17,91,749/- for the A.Y. 2009-10. Assessment was reopened u/s. 147 of the Act and reassessment was completed on 27.03.2015 u/s. 143(3) r.w.s 147 of the Act determining the income at ₹ 28,55,140/-. While completing the reassessment the Assessing Officer treated purchases of ₹ 10,63,392/- made from various deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ad hoc estimation of profit on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases. Assessing Officer based on the decision of the Hon'ble Gujarat High Court in the case of CIT v. Simit P. Seth [356 ITR 451] estimated the profit element in such purchases at 12.5% and by reducing the Gross Profit already declared by the assessee. In the circumstances, we hold that there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of ad hoc estimation. Coming to the interest, the assessee furnished complete details in the return of income and made a claim and simply because the claim is denied and cannot lead to furnishing of inaccurate particulars or concealment of income. No allegation by Assessing Officer that the assessee failed to disclose the particulars relating to its claim in the return of income. Thus we hold that there is no concealment of income or furnishing of inaccurate particulars of income. Thus we direct the Assessing Officer to delete the penalty levied u/s. 271(1)(c) of the Act. 7. Similarly, in the case of DCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before the Tribunal. 12. The ld. DR strongly placed reliance on the order of Assessing Officer. 13. On the other hand, the ld. AR submitted that the additions made in the case of some other assesses on identical reasons have been deleted by the Co-ordinate Benches of the Tribunal in the following cases: a) Ramesh Kumar and Co V/s ACIT in ITA No. 2959/Mum/2014 (AY-2010-11) dated 28.11.2014; b) DCIT V/s Shri Rajeev G Kalathil in ITA No. 6727/Mum/2012 (AY-2009-10) dated 20.8.2014; and c) Shri Ganpatraj A Sanghavi V/s ACIT in ITA No. 2826/Mum/2013 (AY-2009-10) dated 5.11.2014 In all the above said cases, the Co-ordinate Benches of the Tribunal has held that the AO was not justified in making the addition on the basis of statements given by the third parties before the Sales Tax Department, without conducting any other investigation. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We notice that the ld. CIT(A) has taken note of the fact that no sales could be effected without purchases. He has further placed reliance on the decision rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be sustained. It is also a settled legal position of law that penalty cannot be levied wherein the assessment is made on estimation basis. Accordingly, we are inclined to uphold the order passed by the ld. CIT(A) by dismissing the appeal of the revenue. 8. Further, the Hon'ble Punjab Haryana High Court in the case of Harigopal Singh v. CIT [258 ITR 85] held as under:- 3. On further appeal, the Tribunal reduced the addition to ₹ 1,50,000. Hence, the income was finally assessed at ₹ 1,50,000 against the declared income of ₹ 52,000. The Assessing Officer initiated penalty proceedings against the assessee by invoking Section 271(1)(c) along with the Explanation 1(B) of the Act on the plea that he had concealed the particulars of his income. A show-cause notice was issued to him under Section 274 read with Section 271(1)(c) of the Act. In reply thereto, the assessee pleaded that since no positive concealment had been detected by the Department and the addition was made in his income only on estimate basis, no penalty under Section 271(1)(c) of the Act could be imposed because the assessee's income on estimate basis keeping in view his househo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee during the year under appeal was more than the income returned by him. Additions in his income were made, as already observed, on estimate basis and that by itself does not lead to the conclusion that the assessee either concealed the particulars of his income or furnished inaccurate particulars of such income. There has to be a positive act of concealment on his part and the onus to prove this is on the Department. We are also of the considered view that the Tribunal grossly erred in law in relying on Explanation 1(B) to Section 271(1)(c) of the Act to raise a presumption against the assessee. The assessee had justified his estimate of income on the basis of household expenditure and other investments made during the relevant period. It is not the case of the Revenue that he had, in fact, incurred expenditure in excess of what he had stated. In this view of the matter, it cannot be said that the explanation furnished by the assessee had not been substantiated or that he had failed to prove that such explanation was not bona fide. 5. In the result, the appeal is allowed and the question posed in the earlier part of the order is answered in the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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