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2024 (3) TMI 725 - AT - Income TaxPenalty u/s 271(1)(c) - additions made in the assessment order u/s 143(3) on estimate basis - HELD THAT:- Following guideline from the decision of Dilip N. Shroff [2007 (5) TMI 198 - SUPREME COURT], Hon’ble Madras High Court decided in CIT vs. Cafco Syndicate Shipping Co [2007 (7) TMI 35 - HIGH COURT, MADRAS] that disallowance on the ground that the expenditure was huge or that some vouchers were not available is not good enough to justify penalty in absence of anything more to suggest that the claim was not bonafide. There is no evidence in the case of the assessee that the claim was malafide. There is nothing on record that inadmissible expenses were claimed or that the expenses were incurred for purposes other than assessee’s business. AO imposed the impugned penalty on the assessee for concealing particulars of his income. This is contrary to the facts on record. AO proceeded to compute the income of the assessee on the basis of the particulars as per tax audit report of gross turnover, gross profit, GP rate, depreciation, net profit and net profit rate. AO accepted the income declared but disallowed 10% of the claim of expenses on the turnover on the basis of details furnished during the course of assessment proceedings. Therefore, there is no concealment of particulars of income by the assessee so as to justify levy of the impugned penalty. As observed that the CIT(A) has not given any finding on the contention raised before him by the assessee that it was incorrect on the part of the AO to hold that the assessee concealed his income only on the basis of disallowance of expenses on estimate. CIT(A) is silent on the plea of the assessee contained in statement of facts also that the assessee withdrew his quantum appeal challenging the said disallowance on the assurance from the then AO that no penalty would be levied. No attempt at all has been made by the CIT(A) to have this plea verified. CIT(A) did not give any credence to the above contention and plea of the assessee for no valid reasons. Appeal of the assessee is allowed.
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