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TMI Blog2023 (6) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that in CIT vs. Aero Traders Pvt. Ltd [ 2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s.271(1)(c) of the Act can be imposed when income is determined on estimate basis. We are of the opinion that AO has failed to establish underreporting. Section 270A of the Act provides for imposition of penalty for underreporting and misreporting of income. Sub-section (2) enlists certain circumstances of under-reporting of income. Sub-section (3) deals with the determination of under-reported income, which, in our context, is by reducing the income returned by the assessee from the amount of income finally assessed. In the case under consideration, the addition is based on GP estimation. Hence, we hold that the penalty lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty u/s.270A of the Act. Aggrieved by the Penalty order the Assessee filed appeal before the Ld.Commissioner of Income Tax(Appeal). The relevant paragraph of Ld.CIT(A) s order is reproduced as under : 1. Ground No: 01- Penalty levied u/s 270A r.w.s 270A(6) of the IT act at Rs.2,66,820/- which is 200% of the difference: - In this regard it is to bring your kind notice that the liquor commodity is controlled by the central excise department under the provision of section 3A and 11 AC of the Central Excise Act vide rule 96ZQ(5) of the Central excise rules. However, the Id. AO has estimated the additional profit at 10%o and in view of the provisions of section 270A (6) (c) the penalty is not leviable u/s 270A of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that AO has failed to establish underreporting. 5. The ITAT Pune bench in the case of Laxman Trimbak Gule Vs CIT ITA No. 348/PUN/2018 has held as under : Quote, We have heard the rival contentions and perused the materials available on record. We have also considered the judicial pronouncements placed before us. In the present case, the Assessing Officer estimated the disallowance at 50% being Rs.9,90,685/- and initiated penalty proceedings u/s.274 r.w.s 271(1)(c) of the Act. It is a basic need of the provisions of law that definite finding is required to be recorded by the Assessing Officer for reaching to a conclusion with regard to concealment of income or furnishing of inaccurate particulars of income and without any such f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be a subject-matter of penalty for concealment of income. The ld.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 the submissions of the assessee and perused the facts that are ruling in the instant case. There is no doubt that there are certain discrepancies noticed in the course of special audit as brought out in their report. However, such discrepancies by itself ipso facto lead to the conclusion that the assessee has concealed the income. Ultimately the AO has to resort to estimated addition only. He could not point out any specific item of any addition with any conclusive evidence. Even the addition made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 order of the Tribunal dt. 4th Dec., 2008. The finding arrived at by the Tribunal does not warrant interference from this Court as it is purely a finding of fact. No perversity has been pointed in such a finding. Consequently, no substantial question of law arises for consideration. As a result, the appeal is dismissed. 9.1. The Hon ble Gujarat High Court in the case of CIT vs. Subhash Trading Company (Guj) on the same issue has held as follows: Where income is assessed on estimate basis after rejectin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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