TMI Blog2014 (5) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases were not shown in sales or stock - Addition was made in GP - no such findings were given by the AO that there was specific discrepancy found in purchase and sale - no penalty u/s 271(1)(c) can be imposed upon the basis of estimated addition – Decided in favour of assessee. - ITA No. 1484/Ahd/2010, ITA No. 1720/Ahd/2010 - - - Dated:- 29-4-2014 - Shri D. K. Tyagi And Shri T. R. Meena,JJ. For the Petitioner : Shri K. C. Mathews, Sr. D. R. For the Respondent : Shri Kamlesh N. Bhatt, A.R. ORDER Per : Shri T. R. Meena, Accountant Member These two appeals are cross appeals filed by the assessee and Revenue, arising out of the order of ld. Commissioner of Income-tax (Appeals)-II, Surat, dated 05.02.2010, for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas it was 0.85kg. per unit in the preceding year. The assessee had consumed raw material for own consumption at Rs.88,37,969/- which works out to 93.44% of total receipts whereas during he immediate preceding year, the assessee had shown raw material consumption for own production at Rs.4,02,53,624/-, which works out to 81.68%. The A.O. held that assessee had not only suppressed his production and receipts but also inflated expenses at large scale. The A.O. rejected the book result u/s. 145(3) of the IT Act in quantum proceeding. After analyzing the receipt as well as expenses of the assessee, the ld. A.O. made addition of Rs.94,56,380/- on account of suppression of production and job receipts. When there is not response from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated basis and no material had been brought on record by the A.O. that assessee has concealed the income. He simply compared the previous year s receipts as well as expenses and estimated the suppression of production and job work. The ld. CIT(A) reduced the gross profit to 3.68%. He further relied upon following cases: i. CIT vs. Ajaib Singh Co. (2002) 253 ITR 630 (P H), ii. CIT vs. Auric Investments and Securities Ltd. (2009) 310 ITR 121 (Delhi), iii. CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC), iv. CIT vs. Bhartesh Jain (2010) 323 ITR 358, v. CIT vs. Zoom Communications Pvt. Ltd. (2010) 327 ITR 510 (Delhi), vi. Devsons Pvt. Ltd. vs. CIT (2010) 329 ITR 483 (Delhi), vii. Karan Raghav Exports P. Ltd. Vs. CIT (2012) 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition remains estimated. The books had been audited and all the particulars of income as well as expenditure have been disclosed by the assessee. The case laws cited by the Revenue is not squarely applicable as in this case, the serious discrepancies were found in books of account and excess sales were shown and purchases were not shown. Bogus purchases were claimed and purchases were not shown in sales or stock. Addition was made in GP. In assessee s case, no such findings were given by the A.O. that there was specific discrepancy found in purchase and sale. Various High Courts as well as Supreme Court had held that on estimated addition, no penalty u/s. 271(1)(c) can be imposed. The assessee had offered an explanation before the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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