9911796707
TMI Blog2021 (7) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, would not lead to the conclusion that there was a failure to return the correct income arising out of fraud or any gross or willful neglect on the part of the assessee. Hon ble Delhi High Court in the case of Aero Traders Pvt. Ltd. [ 2010 (1) TMI 32 - DELHI HIGH COURT] has dismissed the appeal filed by the Revenue against the order of the Tribunal, which, in turn, has upheld the order of the CIT(A) deleting the penalty on the ground that addition made by the AO on the basis of estimated profit could not be a subject matter of penalty for concealment of income. in the instant case, the profit of the assessee has been estimated at a rate of 14.5% as against the profit declared at 12.37% and the assessee has given the instances of 6-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax sought to be evaded. 4. In appeal, the ld.CIT(A) sustained the penalty levied by the AO. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 6. The ld. counsel for the assessee, referring to the following decisions, submitted that penalty u/s 271(1)(c) of the Act is not sustainable where the AO has rejected book results and adopted higher profit ratio on estimate basis than that declared by the assessee:- 1. CIT Vs. Aero Traders Pvt. Ltd. (2010) 323 ITR 316 (Del.); 2. Shri Radhey Shyam Vs. ITO in ITA No.5268/Del/2015 A.Y. 2009-10 dated 31/10/2017. 3. CIT Vs. Prem Prakash [SLP (CIVIL) Nos. 9492-9494 of 1981 : (1984) 146 ITR fSt.) 3 (SC)]; 4. CIT Vs. Kalicharan Agarwalla & Co. [(1984 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 11,82,69,105/- @ 14.5% and after deducting the business income already shown by the assessee had made addition of the same. We find, the assessee accepted the above addition made by the AO during the course of assessment proceedings for which it did not prefer any appeal before the CIT(A) on the quantum addition. We find, the AO initiated penalty proceedings u/s 271(1)(c) of the Act and levied penalty of ₹ 6,63,763/- which has been upheld by the CIT(A). It is the submission of the ld. Counsel that since the book result was rejected and the profit was estimated by the AO by adopting higher profit than the profit declared by the assessee, therefore, penalty is not leviable. It is also his submission that the profit declared by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for concealment of income. The various other decisions relied on by the ld. Counsel to the proposition that penalty could not be levied where the AO has rejected the book results and adopted higher profit ratio than declared by the assessee on estimate basis. Since, in the instant case, the profit of the assessee has been estimated at a rate of 14.5% as against the profit declared at 12.37% and the assessee has given the instances of 6-7% profit declared by other assessees engaged in the same line of business, therefore, we are of the considered opinion that it is not a fit case for levy of penalty u/s 271(1)(c) of the IT Act. We, therefore, set aside the order of the CIT(A) on this issue and the ground raised by the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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