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2022 (9) TMI 1310 - AT - Income TaxPenalty u/s 271(1)(c) - addition of income being estimated profit on the amount of sale - AO was not satisfied with the amount of income declared by the assessee and therefore he estimated the gross total income of the assessee at the rate of 8% of the total turnover - HELD THAT:- As the quantum proceeding and the penalty proceeding are different. Any addition or disallowances made under quantum proceeding do not ipso facto empower the revenue authority to levy penalty under Section 271(1)(c) of the Act. Further the addition made was based on estimation and it settled position of law by the various Hon’ble High court that no penalty under Section 271(1)(c) can be sustained in the case of estimated addition - See M/S. NORTON ELECTRONICS SYSTEMS PVT. LTD [2014 (2) TMI 606 - ALLAHABAD HIGH COURT] Also in the case of CIT vs. Modi Industrial Corpn.[2009 (11) TMI 891 - PUNJAB & HARYANA HIGH COURT] has also held that where the assessment of the assessee was completed on estimated basis penalty under Section 271(1)(c) of the Act was not imposable with respect to the additions made on such estimate by the Assessing Officer. We are of the opinion that no penalty under Section 271(1)(c) of the Act can be sustained on account of addition made by the authorities below based on estimation. Accordingly, we hereby set-aside the order of the Ld. CIT(A) and direct the AO to delete the penalty levied by him - Decided in favour of assessee.
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