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2020 (4) TMI 524 - AT - Income TaxPenalty levied u/s 271(1)(c) - addition made on account of profit margin on sale of Mixer Grinder - penalty leviable on addition made on estimation of income - HELD THAT:- AO estimated the profit @ ₹ 300/- per piece on sale of 1500 Mixer Grinder. Assessing Officer estimated the profit of ₹ 4,50,000/-. On appeal before the ld. CIT(A), the addition was upheld. However, on further appeal before the Tribunal, the addition was restricted to ₹ 3,37,500/- in [2016 (2) TMI 1274 - ITAT MUMBAI] - We have further noted that in reply to the show cause, the assessee stated that no penalty is leviable on addition made on estimation of income and relied upon the decision of Jodhpur Tribunal in ITO vs. Gurunanak Oil Agency [2013 (3) TMI 718 - ITAT JODHPUR]. The contention of assessee was not accepted by Assessing Officer. The Assessing Officer levied the penalty @ 100% of the tax sought to be evaded. The ld. CIT(A) affirmed the action of Assessing Officer. There is no dispute that addition on which penalty was initiated was based on estimation basis. The addition was further reduced by Tribunal by allowing administrative and other expenses and estimated the profit @ ₹ 225/- per piece/per Mixer Grinder. It is settled position that no penalty is leviable on adhoc/estimated addition. Hence, we direct the assessing officer to delete the entire penalty levied under section 271(1)(c) - Decided in favour of assessee.
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