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2020 (5) TMI 83 - ITAT MUMBAIPenalty levied u/s 271(l)(c) - Bogus purchases - AO restricting the profit element in the alleged bogus purchases at 20.71% - penalty levied on estimate basis and voluntary surrender by the assessee - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. On a perusal of the record, in this case we find that an estimation of Gross Profit was made by the Assessing Officer restricting the profit element in the alleged bogus purchases at 20.71% for the year under consideration. Similar view has been taken in the case of CIT v. Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] wherein the Hon'ble High Court affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In the case on hand the AO has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. No infirmity in the order passed by the CIT(A) in deleting the penalty u/s. 271(1)(c) levied by the Assessing Officer. - Decided in favour of assessee.
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