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2016 (7) TMI 1533 - AT - Income TaxPenalty u/s 271(1)(c) - addition by estimating the GP at 15% - HELD THAT:- It is noted that the accounts submitted by the assessee have neither been rejected nor any defects have been pointed out by the AO. The addition was made by the AO purely on the basis of estimate, that too, without any basis, much less, any scientific basis. The assessee accepted the addition and offered to pay the tax with a view to buy peace and to avoid litigation, as is clear from the facts before us. Under these circumstances, it is noted that nothing has been brought on record by the lower authorities to show any concealment of income. The addition made on estimate basis cannot be put into the category of concealed income by any stretch of imagination. AO made the addition because in his opinion, the GP of the assessee was to be estimated at a particular percentage. The opinion of the AO was purely subjective and discretionary and without any concrete basis. Under these circumstances, no penalty can be levied, as per law. In this regard, we find support from the judgement of Hon’ble Bombay High Court in the case of CIT vs Upendra V Mithani [2009 (8) TMI 1159 - BOMBAY HIGH COURT]. Thus, in view of the aforesaid legal position and facts of the case, we find that penalty in this case is unjustified and the same is directed to be deleted
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