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2012 (5) TMI 74 - ITAT DELHICanceling the penalty u/s 271(1)(c) holding that there was no positive concealment detected by the AO – Held that:- There has to be concealment of particulars of income by the assessee or the assessee must have furnished inaccurate particulars of income - addition sustained was based on ad hoc estimation of income by applying a flat rate of 8% of profit which can neither be held as concealment of income or filing of inaccurate particulars of income - disparity between the assessed income and the returned income it can be said that the addition was purely on ad hoc estimation of net profit ratio, the AO applied a particular flat rate of 11% against the declared profit rate of 3% by the assessee -the assessee's offering of the profit rate was a conditional proposal to buy peace and not to enter into dispute with revenue authorities - the circumstances under which the advances to Directors have been made required for meeting out the contingencies of the business - CIT (A) was justified in deleting the penalty levied – in favour of assessee.
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