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2019 (6) TMI 889 - AT - Income TaxPenalty u/s 271(1)(c) - AO rejected books of account by invoking provisions of Section 145(3) and made trading addition - HELD THAT:- Trading addition has been upheld by the Tribunal by estimating the GP rate at 15% on the alleged unverifiable purchases. It is settled proposition of law that merely confirmation of the trading addition made on estimate basis does not lead to the conclusion that assessee has furnished inaccurate particulars of income or concealed any income. Estimation is always on presumptions and assumptions and without proper and specific linking with any evidence in support of such estimation assessee cannot be fastened with liability of penalty. Accordingly, it is well settled that no penalty is leviable u/s 271(1)(c) on the basis of trading addition due to disturbance in the G.P. rate disclosed by the assessee. Therefore, additions were made in the assessment order not on the basis of any concealment being detected in assessment but only on Ad hoc Basis. Hence it cannot be deemed to concealed income for the purpose of penalty u/s 271(1)(c) in the case of CIT Vs. Super Metal Re-Rollers Pvt. Ltd. [2003 (9) TMI 51 - DELHI HIGH COURT] - No merit in the penalty so imposed with regard to the addition upheld on estimation basis, therefore, we direct to delete the same. - Decided in favour of assessee.
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