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2021 (7) TMI 1101 - AT - Income TaxLevy of penalty u/s 271(1)(c) - addition by estimating the profit at 14.5% as agreed by the assessee for such estimation - HELD THAT:- Hon’ble Bombay High Court in the case of CIT vs. Devandas Perumal & Co. [1982 (1) TMI 27 - BOMBAY HIGH COURT]has held that the presumption contemplated by the Explanation to section 271(1)(c) stood rebutted by the fact that there was no suppression of any sales or inflation of any purchases. The mere fact that the Income-tax Officer proceeded to estimate the net profit at a figure higher than that what was disclosed by the assessee, would not lead to the conclusion that there was a failure to return the correct income arising out of fraud or any gross or willful neglect on the part of the assessee. Hon’ble Delhi High Court in the case of Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT]has dismissed the appeal filed by the Revenue against the order of the Tribunal, which, in turn, has upheld the order of the CIT(A) deleting the penalty on the ground that addition made by the AO on the basis of estimated profit could not be a subject matter of penalty for concealment of income. in the instant case, the profit of the assessee has been estimated at a rate of 14.5% as against the profit declared at 12.37% and the assessee has given the instances of 6-7% profit declared by other assessees engaged in the same line of business, therefore, we are of the considered opinion that it is not a fit case for levy of penalty u/s 271(1)(c) - Decided in favour of assessee.
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