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2014 (8) TMI 66 - AT - Income TaxPenalty u/s 271 – Rejection of books of accounts and estimated net profit – Held that:- The books of account of the assessee were rejected by the AO have invoked the provisions of section 145 of the Act after noting discrepancy in the maintenance of the books of account - once the books of account are rejected and net profit is estimated, penalty u/s 271(1)(c) of the Act cannot be attracted, as there is no material on record to establish as to how assessee has concealed the income or has furnished inaccurate particulars of income for attracting penalty under section 271(1)(c) of the Act – Relying upon Naresh Chand Agarwal vs. CIT [2013 (6) TMI 68 - ALLAHABAD HIGH COURT] - in a case of estimation of income after rejection of books, no penalty could be imposed under section 271(1)(c) of the Act – thus, once the books of account are rejected and net profit is estimated by the AO, penalty u/s 271(1)(c) of the Act cannot be imposed – Decided in favour of Assessee.
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