2021 (2) TMI 636 - ITAT MUMBAI - Income Tax

Head Note / Extract:
Penalty 271(1)(c) - Assessment completed u/s. 144 - NP Determination - rejecting the books of accounts and subsequently the net profit of the assessee was assessed @ 1% of the turnover declared - HELD THAT:- The assessment was completed by estimating the profit. No penalty is leviable where the assessment was completed on the basis of the estimation of profit. In this regard, we find support of the decision of Hon'ble Gujarat High Court in the case of National Textiles [2000 (10) TMI 19 - GUJARAT HIGH COURT] in which it is specifically held that the no penalty is liable to be sustainable where the profit was estimated. Taking into account all the facts and circumstances mentioned above, we set aside the finding of the CIT(A) on this issue and delete the penalty. - Decided in favour of assessee.