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2017 (8) TMI 743 - AT - Income TaxPenalty u/s. 271(1)(c) - estimated the profit element at 2% of the value of the purchase transactions - Held that:- When the addition of ₹ 46,831/-(supra) had been struck down by the CIT(A) while disposing of the appeal filed by the assessee against the order passed by the A.O u/s. 143(3) r.w.s. 147, and the same had been substituted by an addition of ₹ 936/- which in itself had been worked out on an estimate basis by applying a profit rate of 2% on the value of the aforesaid purchase transaction of ₹ 46,831/-, and is not found to be backed by any concrete basis, therefore, we find ourselves to be in agreement with the ld. A.R. that no penalty in respect of the addition at ₹ 936/-(supra) which had been sustained in the hands of the assessee on an estimate basis can be sustained in the eyes of law. We thus in light of our aforesaid observations set aside the order of the CIT(A) and quash the penalty imposed by the A.O u/s. 271(1)(c) of the Act in the hands of the assessee. Appeal of the assessee is allowed.
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