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TMI Blog2021 (7) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income or furnished inaccurate particulars. Action of making addition on ad hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. We find support from the series of decisions by different High Courts as well the decision of the Co ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law - Decided against revenue. - ITA no.6461/Mum./2019 - - - Dated:- 10-6-2021 - Shri S. Rifaur Rahman, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessee : Ms. Radha Halbe For the Revenue : Shri Gurbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby making addition under section 69C of the Act at ₹ 3,71,437, on account of bogus purchase made by the assessee. The assessee has not contested the quantum addition of ₹ 3,71,437, made by the Assessing Officer on account of bogus purchase. According to the Assessing Officer, the assessee has concealed the particulars of income and, therefore, imposed penalty of ₹ 2,22,860, under section 271(1)(c) of the Income Tax Act, 1961 (for short the Act ). The assessee being aggrieved by the issuance of penalty order dated 29th July 2016, passed by the Assessing Officer, filed appeal before the first appellate authority. 3. The learned Commissioner (Appeals) deleted the penalty so imposed by the Assessing Officer under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus conclusively and there were no corresponding sales, In a recent case before the Allahabad High Court in the case of NareshChand Agarwal vs. CIT, 357 ITR 0514 (All), it has been held that: 12. In the instant case, nothing was concealed by the assessee. It was the A.O. who has rejected the books of account in the second round and applied the 8% net profit rate prescribed under Section 44 AD. In the instant case, the turnover is more than 40 lacs, so Section 44AD is not applicable, nonetheless the A.O. has inspired with the provision of Section 44AD and made the addition by estimating the net profit rate @ 8%. Rejection of the books of account allowed the A.O. to make the addition on estimate basis. When the addition is made on est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT (2017) 49 CCH 0183 Del Trib and ITAT Mumbai in the case of Rekeshrnmer M. Gupta vS.ITO(2017) 49 CHH 0066 Mum Trib, it has been held that where income has been estimated, the appellant cannot be said to have concealed particulars of income or furnished inaccurate particulars of income and therefore. penalty u/s 271 (1 )(c) was not leviable. 6.4 In the background of the aforesaid discussions and respectfully following the precedents, as above and those relied upon by the appellant, I am of the considered view that the appellant has not concealed the particulars of income and nor has it furnished inaccurate particulars of income, there being are no findings of the .A.O that the' details furnished by the appellant in his return a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Co ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law. In support of this contention, following case laws are relied upon:- i) CIT v/s Norton Electronics Systems (P) Ltd. [2014] 41 taxmann.com 280 (Allahabad HC); ii) ACIT v/s Vision Research Management (P) Ltd., [2015] 63 taxmann.com 8 (Lucknow) (Trib.); iii) Prem Chand v/s ACIT, [2014] 52 taxmann.com 95 (Chandigarh) (Trib.); iv) CIT v/s PHI Seeds India Ltd., [2008] 301 ITR 0013 (Del); and v) Dilip N. Shroff v/s JCIT [2007] 291 ITR 519 (SC). 6. Even the learned Departmental Authorities has not brought any cogent material to prove otherwise warranting inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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