TMI Blog2015 (8) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts of the present case, we are of the view that levy of penalty would not be justified. Therefore, we direct the AO to delete the penalty on addition made on the basis of estimation. Thus, this issue is allowed. - Decided in favour of assessee. Disallowance of depreciation on computer - Held that:- It is the contention of assessee that it had purchased computer on which depreciation was claimed. In view of the judgement of Hon’ble Supreme Court rendered in the case of CIT vs. Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein held a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee, we hereby direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order, the Assessing Officer (AO in short) made addition(s) on account of unsecured loans of ₹ 67,45,000/- by invoking the provisions of section 68 of the Act, GP estimation of ₹ 2,32,586/-, TUF depreciation of ₹ 11,07,580/- and disallowance of depreciation on computer of ₹ 19,800/-. The AO also initiated penalty proceedings u/s.271(1)(c) of the Act. The matter travelled upto the stage of Tribunal (ITAT A Bench Ahmedabad) and the Tribunal in ITA No.3208/Ahd/2008 for AY 2004-05, order dated 16/12/2010, was pleased to set aside the issue of addition on account of unsecured loans of ₹ 67,45,000/- and in respect of GP estimation the Tribunal reduced the GP rate adopted by the AO and directed the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues which are reproduced hereunder:- Sub: Written Submission for A.Y. 2004-05 Ref: Appeal preferred against order u/s. 271(1)(c) dated 18.03.2010 May It Please To Your Honour 1. The appeal is directed against the order of the CIT(A) confirming the penalty on addition of ₹ 1,93,813/- on account of low gross profit and disallowance of ₹ 19,800/- of depreciation on computer. The facts leading to the levy of the penalty are described as under: 2. In this case, assessment u/s. 143(3) of the I. T. Act was completed on 29.11.2006 determining the total income at ₹ 13,47,000/- as against the returned loss of ₹ 22,27,530/-. While finalizing the assessment the following additions were made to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Assessing Officer requested assessee to furnish the reasons for decline in Gross Profit Ratio. In response to the same assessee furnished a comparative chart showing the G.P. ratio of current year as well as preceding year. However, Assessing Officer rejected the explanation of the assessee and made the addition of ₹ 2,32,586/- to the total income of assessee. The assessee filed an appeal against the above addition the learned CIT(A) allowed part relief by confirming addition to the extent of ₹ 1,93,813/- on further appeal, Honourable ITAT allowed further relief by directing assessing officer to estimate G.P at the rate of 9% as against 8.27% shown by assessee. 4.2 Now as regards the penalty imposed on the above G.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timated GP @ 9% considering the non production of books of accounts. The books could not be produced as they were destroyed in flood. Penalty on addition of ₹ 19,800/- being disallowance of depreciation on computer: 4.4 During the year under consideration assessee has claimed depreciation of ₹ 19,800/- at 60% on new computer purchased during the year of ₹ 33,000/-. However, as per Assessing Officer assessee was not able to produce any evidence for the purchase of the same. Therefore, Assessing Officer disallowed the depreciation of ₹ 19,800/- and made the addition of the same to the total income of the assessee. 4.5 As regards the penalty on the addition of ₹ 19,800/-, it is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty was sustained by CIT(A). 6. In view of the above, your honour is requested to delete the penalty. Date : 29. 07. 201 5 Place: Surat Signed (Rasesh Shah) 5.1. So far as sustenance of penalty on addition on account of estimation of GP is concerned, in quantum, addition has been sustained upto the stage of this Tribunal (ITAT A Bench Ahmedabad) in ITA No.3208/Ahd/2008(supra). However, the Tribunal has estimated the profit @ 9% as adopted by the AO of 11%. Hence, the entire addition is purely made on the basis of estimation. The contention is that book of accounts could not be produced because of the destruction in flood. It is settled principle of law that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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