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2021 (3) TMI 1043 - AT - Income TaxPenalty levied u/s. 271(1)(c) - Estimation of income on bogus purchases - HELD THAT:- It is a settled position of law that penalty cannot be levied when an ad hoc estimation is made. In both the cases an ad hoc estimation was made by the Assessing Officer restricting the profit element in the purchases @25%. As relying on SHRI DEEPAK GOGRI [2017 (11) TMI 1857 - ITAT MUMBAI] and AERO TRADERS (P) LTD. [2010 (1) TMI 32 - DELHI HIGH COURT] estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. On hand the Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, we do not observe any infirmity in the order passed by the Ld. CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for both the Assessment Years. Grounds raised by the revenue are rejected.
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