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TMI Blog2022 (2) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... x. Assessee in the assessment proceedings disclosed this fact and offered the same to tax. In these circumstances, the assessee fulfilled both the conditions to be outside the purview of Explanation (1) to Section 271(1)(c). In the present case, on account of bogus purchase, the ld.CIT(A) has restricted addition to ₹ 11,88,357/- from ₹ 43,53,429/- on estimate basis. Such an estimation is made without any concrete material but on adhoc basis. Hon ble jurisdictional High Court in the case of CIT Vs. Valimkbhai H. Patel [ 2005 (7) TMI 35 - GUJARAT HIGH COURT ] has held that where addition has been made on estimation basis, no penalty under section 271(1)(c) could be made qua such addition. - ITA No.1822/Ahd/2018 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had made an addition of ₹ 43,53,429/- to the total- income of the assessee on account of bogus purchase. However, the Ld. Asst. Commissioner of Income Tax, Circle 5(3), Ahmedabad had restricted the bogus purchase to ₹ 10,88,357/- on estimated basis. It is held in Etco Telecom Ltd. Mumbai v/s. Department of Income tax that no penalty is leviable on addition of ₹ 11,20,000/- sustained by C.I.T. (A) as addition/ disallowance is entirely on estimated basis which is not supported by concrete material. The Honourable C.I.T. (A) reduced the estimated disallowance of ₹ 11,20,000/- in place of ₹ 55,20,000/-made by A.O. such estimated addition is not subject to penalty u/s. 271(l)(c) of Income Tax Act. So the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing judgment of jurisdictional High Court in the case of A.M. Shah Co. Vs. CIT, (200) 108 taxman 137 and Delhi High Court in the case of CIT Vs.Zoom Communication P.Ltd., 191 taxman 179. Thus, the Ld.CIT(A) dismissed appeal of the assessee. Aggrieved against this impugned order of the assessee is in further appeal before the Tribunal raising grounds mentioned (supra). 5. The assessee has filed final (written) submissions and not represented by counsel. As far as the addition of ₹ 4,79,000/- is concerned, the assessee was of strong believe that dairy farming income was exempt under Income Tax Act. Therefore, he has not declared income from Malhar Diary while filing income tax return, however, accepted this income during the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have given thoughtful consideration and gone through records placed before us. As it can be seen from the penalty order, during the assessment proceedings, the assessee himself accepted that an amount of ₹ 4,79,000/- from Malhar Dairy firm was an undisclosed income. Further, the assessee s business being in the nature of dairy and vegetable, the assessee would not be knowing that whether income from dairy firm was liable to tax or not. However, during the assessment proceedings, the assessee offered this as undisclosed income which has been confirmed in appeal before the ld.CIT(A) and the issue has attained finality. On examination of the facts on hand, it is apparent that the claim was neither mala fide nor false. It was under bona f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the conclusion that the penalty is not leviable in the present case, though for different reasons. In the light of the peculiar facts of the case, without entering into any discussion as to the legal position, the Tribunal's order requires no interference in the light of the findings of fact recorded by the Commissioner (Appeals). The question referred is, therefore, answered in the affirmative, i.e., in favour of the assessee and against the revenue only to the extent of upholding the Tribunal's order that it was justified in deleting the penalty levied under section 271(1)(c) of the Act. 10. By following the above judicial precedents, we have no hesitation in reversing the order passed by the ld.CIT(A) and cancellin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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