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2015 (8) TMI 838 - ITAT AHMEDABAD

2015 (8) TMI 838 - ITAT AHMEDABAD - TMI - Penalty u/s.271(1)(c) - addition on account of low G.P. - Held that:- 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 wherein 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 .....

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at:- 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 the AO to delete the penalty. - Decided in favour of asse .....

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in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in partly confirming the action of assessing officer in imposing penalty u/s.271(1)(c) of the Act by sustaining the penalty on the addition of ₹ 1,93,813/- on account of low G.P. and ₹ 19,800/- on disallowance of depreciation on computer. 2. It is therefore prayed that penalty imposed by Assessing Officer and confirmed by Commissioner of Income-tax (Appeals) may ple .....

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,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 l .....

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idering the submissions, deleted the penalty on addition made on account unsecured loans of ₹ 67,45,000/- and sustained the penalty on GP addition and disallowance of depreciation on computer. 3. On the date of hearing, no one appeared on behalf of assessee, however a letter dated 29/07/2015 has been filed to decide the appeal on the basis of written submissions. Therefore, the Tribunal decided to proceed in the matter in the absence of assessee. 4. The ld.counsel for the assessee.Sr.DR su .....

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ation of Gross Profit and disallowance of depreciation on computer. The assessee has filed written submissions on both the issues 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 .....

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ealment of income: i. Addition u/s. 68 of the I. T. Act ₹ 67,45,000/- ii. Addition on account of fall in G.P. ₹ 2,32,586/- iii. Disallowance of depreciation claimed on Computer ₹ 19,800/- 3. The addition of ₹ 67,45,000/- was set aside by Honourable Tribunal to the file of assessing officer. The assessing officer again made addition which was deleted by Id. CIT(A). The Id. CIT(A) therefore deleted the penalty on this addition. Out of the addition of ₹ 2,32,586/- on a .....

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profit at 8.27% on turnover of ₹ 8.89 lacs, as against gross profit of the preceding assessment year at 10.55% on turnover of ₹ 25.38 lacs. 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 .....

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relief to assessee, as vide order dt. 16.12.2010 Honourable ITAT directed to estimate G.P. @ 9% as against estimation of G.P. @ 11% by Assessing Officer. It is relevant to mention here that assessee has already shown G.P. @ 8.27% & thus the addition on account of G.P. is sustained only at negligible rate of 0.73%. As addition is made purely on the basis of estimation & the same is partly sustained also on the basis of estimation, there is no justification in levying penalty on such estim .....

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ITR 311 (MP). vii. CIT V. Shivnarayan Jamnalal & Co. - 232 ITR 311 (MP) viii. CIT V. K. L. Mangal Sain - 107 ITR 598 (ALL) 4.3 The Id. CIT(A) has wrongly confirmed the penalty on the GP addition. The Honourable Tribunal has held that the application of same GP of last year could not be justified as turnover has increased 3 times. The Honourable Tribunal has estimated GP @ 9% considering the non production of books of accounts. The books could not be produced as they were destroyed in flood. .....

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assessee. 4.5 As regards the penalty on the addition of ₹ 19,800/-, it is submitted that the addition has been made by way of disallowance of depreciation on computer on the ground that assessee could not produce any evidence in support of the purchase of computer. In this context, it is relevant to point out that assessee could not file said evidence due to reasons beyond its control, as its books of account & other records were destroyed in flood. Assessee also filed proof in suppor .....

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of any concealment of income. The reliance is placed on the decision of Honourable Supreme Court in case of CIT v/s. Reliance Petroproducts Pvt. Ltd. - 322 ITR 158 (SC). 5. The assessee has wrongly sought the adjournment at the time of the hearing fixed on 23.02.2015 & 22.06.2015 on the ground that the quantum appeal in ITA No. 2539/A/2012 is pending. The quantum appeal filed by the department was pending in respect of addition of ₹ 67,45,000/- u/s. 68 deleted by CIT(A) which has no re .....

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