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2021 (3) TMI 513 - ITAT MUMBAIPenalty levied u/s. 271(1)(c) - Estimation of income on bogus purchases - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Ld.CIT(A) restricting the profit element in the purchases @25%. See SHRI DEEPAK GOGRI VERSUS THE INCOME TAX OFFICER, WARD 25 (3) (2) , MUMBAI [2017 (11) TMI 1857 - ITAT MUMBAI. As decided in AERO TRADERS (P) LTD. [2010 (1) TMI 32 - DELHI HIGH COURT] 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 Assessing Officer treated purchases as non-genuine. Ld.CIT(A) considering the evidences restricted the disallowance to an extent of 25% on the non-genuine purchases - Ld.CIT(A) following various judicial pronouncements deleted the penalty levied by the Assessing Officer. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year - Decided in favour of assessee.
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