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2015 (7) TMI 1363 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance on account of cost of Audio CDs to 20% of the expenses claimed - HELD THAT:- Ultimately part of the disallowance has been confirmed on estimate basis. It is almost settled now that penal action cannot be taken on the basis of estimated additions. A reference may be made to the decisions of the Hon’ble Punjab & Haryana High Court in the case of CIT Vs Ravail Singh and Co.[2002 (1) TMI 52 - PUNJAB AND HARYANA HIGH COURT] & CIT Vs Sangrur Vanaspati Mills Ltd. [2008 (2) TMI 285 - PUNJAB AND HARYANA HIGH COURT]. Therefore, in our considered opinion, this is not a fit case for levy of penalty because the part of the disallowance was confirmed on estimated basis. For the sake of completeness, a perusal of the assessment order shows that the impugned addition has been made by the AO at para-9 of his order. Admittedly, no satisfaction has been recorded for the initiation of the penalty proceedings whereas in respect of every disallowance made. The AO has specifically mentioned that penalty proceedings u/s. 271(1)(c) are initiated separately. Since there is nothing to show that AO had recorded his satisfaction as required by the statute for initiation of penalty proceedings. Therefore, order levying penalty cannot be sustained.- Decided in favour of assessee.
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