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2017 (2) TMI 412 - AT - Income TaxPenalty u/s 271(1)(c) - AO rejected the books of account and applied gross profit @ 25% on the basis of unverifiable purchases - Held that:- In case of Shiv Lal Tak Vs CIT (2001 (2) TMI 62 - RAJASTHAN High Court) wherein held that “in making computation of total income where the income returned has been rejected by rejecting the trading results, finding some discrepancy in the books of account and substituting the same by an estimated figure, in the strict sense, can neither be said to be addition of any amount in the returned income nor disallowance of any amount as deductions claimed. The word ‘‘amount’’ of which additions made or deductions disallowed also denotes reference to specific item of amount added or disallowed as deduction in contrast to substitution of altogether a new estimated sum in place of the income returned. It is a case neither of addition or disallowance but a case of substitution.” In view thereof, the Hon'ble High Court has upheld the decision of the Tribunal for deleting the penalty. In the light of the above decision of the Hon'ble Jurisdictional High Court, we hereby direct the Assessing Officer to delete the penalty as in the present case also the Assessing Officer has estimated the profit by rejecting the books of account. - Decided in favour of assessee
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