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TMI Blog2021 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... make specific enquiry regarding the same and came to a conclusion based on only materials on record - disallowance upheld by the Ld. CIT(Appeals) is merely on estimate basis without any categorical statement of facts whether there is concealment of income‟ or furnishing of inaccurate particulars of income‟. More so, when the disallowances have been enforced by the Ld. CIT(Appeals) on estimation basis, in such scenario, the settled legal position is that no penalty u/s.271(1)(c) of the Act cannot be imposed When the bedrock of instant penalty is on the estimated addition, the same cannot be sustained. Therefore we are of the considered view that in this case, the additions were made on the basis of estimation and as disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this appeal is levy of penalty by the Assessing Officer u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act‟) and as confirmed by the Ld. CIT(Appeals). 3. The brief facts as in the assessment order are that the assessee is an individual filed return of income for assessment year 2011-12 on 30.04.2013 declaring total income of ₹ 6,72,940/- under the head long term capital gain. The notice u/s.143 of the Act was issued to the assessee which he had responded that the return of income was already filed which may be considered as the return filed against the said notice. During the assessment proceedings, the Assessing Officer verified the claim of commission of ₹ 2,50,000/- and improvement exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a claim made bona-fide would not amount to concealment of particulars of income or furnishing inaccurate particulars of such income to warrant imposition of penalty u/s.271(1)(c) of the Act. To support such contention, the Ld. Counsel has placed reliance on the following decisions: i) CIT Vs. Reliance Petro products Pvt. Ltd., 322 ITR 158 (SC). ii) Ventura Textiles Ltd. Vs. CIT-Mumbai City-11, Income Tax Appeal No.958 of 2017 iii) Mohd. Farhan A Shaikh Vs. Deputy Commissioner of Income Tax, Tax Appeal Nos. 51 57 of 2012 (2021) 110 CCH 0125 MumHC 7. The Ld. DR has placed strong reliance on the orders of the Sub-ordinate Authorities. 8. We have heard the rival contentions and perused the materials available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Harigopal Singh Vs. CIT, 258 ITR 85 (P H) 9. We find that the Hon ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd.(supra.) has held that no penalty u/s.271(1)(c) of the Act can be imposed when income is determined on estimate basis. The relevant portion of the judgment reads as follows: 5. Against this order, the assessee filed an appeal before the CIT(A), who deleted the penalty imposed vide order dt. 7th Sept., 2007, holding that the addition made by the AO on the basis of estimated profit cannot be a subject-matter of penalty for concealment of income. The CIT(A) further found that penalty was not imposable in view of the substantial deduction given by the Tribunal and observed as under : I have considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, the Revenue filed an appeal before the Tribunal. The Tribunal, after hearing the submissions made on behalf of the Revenue, came to the conclusion that the CIT(A) had taken the correct decision in deleting the penalty. The operative portion of the impugned order dt. 4th Dec., 2008 is as follows : As the facts emerge the substantial quantum relief was given by the CIT(A) which has been confirmed by the Tribunal, the balance pertains to estimated rate of profit applied on the turnover of the assessee which in our view does not amount to concealment or furnishing inaccurate particulars. In our view, the CIT(A) has taken right decision in deleting the penalty which is upheld. 7. The appeal is filed against the above-mentioned or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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