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2021 (3) TMI 874 - ITAT MUMBAIPenalty levied u/s. 271(1)(c) - Estimation of income on bogus purchases - HELD THAT:- . It is a settled position of law that penalty cannot be levied when an ad hoc estimation is made. In both the cases an ad hoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5%. Similar view has been taken by the Hon'ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd.[2010 (1) TMI 32 - DELHI HIGH COURT] wherein the Hon'ble High Court affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In both these appeals 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) of the Act levied by the Assessing Officer - Decided in favour of assessee.
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