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2016 (3) TMI 1454 - AT - Income TaxPenalty u/s 271B - AO estimated the assessee’s sales outside books of account - no books of account were maintained by the assessee - AO applying estimated profit rate of 5% on such sales - HELD THAT:- Hon’ble Gauhati High Court in Suraj Mal Parasuram Todi [1996 (8) TMI 102 - GAUHATI HIGH COURT] has held that where no books of account are maintained, penalty should be imposed for non-maintenance of books of account u/s 271A and no penalty can be imposed u/s 271B for violation of section 44AB requiring audit of accounts. Thus Penalty u/s 271B ought not to have been levied because the assessee admittedly did not maintain any books of account as has been recorded in the assessment order itself. We, therefore, order for the deletion of penalty. Penalty u/s 271(1)(c) - estimation of income at 5% on estimated sales - Delhi High Court in CIT vs. Aero Traders P. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] has upheld the view taken by the Tribunal in deleting penalty u/s 271(1)(c) which was imposed on the basis of addition made by the AO on estimated profit. Thus it is clear that the penalty so confirmed in the instant case cannot be sustained because it was imposed by the AO on the estimate of income made by him. We, therefore, order for the deletion of penalty. Assessee appeal allowed.
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