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2021 (10) TMI 784 - AT - Income TaxEstimation of income due to non–availability of the information at the time of assessment - addition of 8% of the total turnover as the business income of the appellant - case was selected for scrutiny under CASS - HELD THAT:- In the given case, the assessee has dealt with the trading only through banking channel. It is not proved anything against the assessee that it has involved any bogus transaction or any other activities involving suppression of profit. Merely because the profit declared is less, the authorities cannot resort to estimation. We direct the Assessing Officer to estimate the profit based on the previous assessment year’s actual profit, which was accepted by the Revenue. The assessee has declared 0.62% in assessment year 2010– 11 and 0.42% in assessment year 2011–12. The average profit declared by the assessee in the above assessment year is 0.52%. The Assessing Officer can estimate 0.52% as the profit for this assessment year since the assessee has already declared 0.08%, the balance 0.44% can be added to the profit for this assessment year. We direct the Assessing Officer to estimate the income as per above direction considering the fact that the profit has to be assessed based on the actual and in case, it is forced to estimate, it has to be based on past declared profit, which the Revenue has accepted. Therefore, the grounds no.1 and 2 raised by the assessee are partly allowed. Penalty u/s 271(1)(c) - HELD THAT:- In the given case, we noticed that the AO himself estimated the income @ 8% and the same was sustained by the Ld. CIT(A). The assessee filed quantum appeal and in that we have directed the AO to restrict the profit earned by the assessee which was declared and accepted by the Revenue based on earlier assessment years, thus penalty levied by the AO estimating the income is not sustainable. Accordingly, we direct the AO to delete the penalty levied by the AO.
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