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2021 (5) TMI 242 - ITAT SURATPenalty levied u/s 271(1)(c) - Addition on account of unexplained deposit into bank and interest credited on savings bank and Addition on account of unexplained deposit into bank and interest credited on savings bank - HELD THAT:- As additions sustained purely on the basis of estimate. Thus, no penalty on these two additions will survive. Estimating the addition at the rate 20% of sales proceeds of shares for want of details in respect of sale transactions, in substitution of the addition as made by the AO alleging unexplained transaction of Shares - We are conscious of the fact that this part of additions were not pressed by assessee in quantum appeal before Tribunal. It is settled position under law that penalty proceedings are separate and independent. The lower authority while deciding the issue of penalty must considered whether, the assessee has provided reasonable explanation and evidences qua the addition, during the penalty proceedings or not. In our view the assessee has reasonably explained the facts regarding the additions before Ld. CIT(A). No findings were given by Ld. CIT(A) on such evidences. Thus, considering the aforesaid factual decision and the submission of ld.AR of the assessee that the two additions are basically made on estimation basis, we find merit in his submission. It is settled law that no penalty under section 271(1)(c) of the Act is leviable on estimated addition. So far as addition no (iii) is concerned, we are of the view that with regard to these additions the assessee has given evidences, on which no findings was given by Ld. CIT(A), in our view, the assessee reasonably explained the facts qua this addition before Ld. CIT(A. Therefore, in our view, this is not a fit case for sustaining the levy of penalty under section 271(1)(c) of the Act, even on third addition. - Decided in favour of assessee.
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