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2020 (3) TMI 685 - AT - Income TaxPenalty levied u/s 271(l)(c) - Bogus purchases - profit element in the purchases restricted @12.5% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5%. On identical situations the Coordinate Bench in the case of Shri Deepak Gogri v. Income Tax Officer [2017 (11) TMI 1857 - ITAT MUMBAI] holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. Also see AERO TRADERS (P) LTD. [2010 (1) TMI 32 - DELHI HIGH COURT] In the case 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) - Decided against revenue
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