TMI Blog2015 (10) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... estimating the higher net profit ratio. No additional material has been brought on record by the Revenue that actual income of the assessee was 25% and not 10.75%. The assessee has given the explanation that the extra work is done by the builder as service to the buyer of the bungalows. The extra work is not done with the profit motive and usually, it is done either on no profit or no loss basis or on negligible profit. The assessee has already disclosed reasonable profit which is 10.75%. The explanation of the assessee is plausible and reasonable. - Decided in favour of assessee. - ITA No. 1467/Ahd/2011 - - - Dated:- 19-6-2015 - SHRI G.D. AGRAWAL AND SHRI S. S. GODARA, JJ. For The Assessee : Shri Gaurav Nahta, AR For The Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income of ₹ 30,00,000/-, he made the addition of ₹ 2,48,96,582/-. On appeal by the assessee, the CIT(A) estimated the profit from the extra work done @ 25% of the receipt which was worked out to ₹ 78,56,911/-. After reducing ₹ 30,00,000/- already offered by the assessee, he sustained the addition at ₹ 48,56,911/-. The assessee accepted the order of the CIT(A) while the Revenue filed the appeal before the ITAT. The ITAT upheld the order of the CIT(A). That the Assessing Officer levied penalty u/s 271(1)(c) in respect of the addition of ₹ 48,56,911/-. It is submitted by the ld. Counsel that the only dispute is whether the income from the extra work performed by the assessee should be at 25% of the receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer has levied the penalty in respect of addition ultimately sustained after the order of the ITAT. Now the question is whether the assessee can be said to be liable for penalty u/s 271(1)(c) merely because the income has been estimated at a higher percentage than what is disclosed by the assessee. 6. We find that this issue is considered by the Hon ble jurisdictional High Court in the case of Whitelene Chemicals (supra), wherein the Hon ble High Court has observed as under: 2. Issue pertains to penalty imposed by the Assessing Officer and confirmed by CIT(Appeals) under section 271((1)(c) of the Income Tax Act,1961 for the assessment year 2001-2002. Such penalty in further appeal came to be deleted by the Tribunal. Prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is therefore, dismissed. 7. The ratio of above decision would be directly applicable to the facts of the assessee s case. In the above case also the Assessing Officer has estimated the income after rejection of the books of accounts by estimating the higher gross profit ratio. In this case also finally the income is assessed by estimating the higher net profit ratio. No additional material has been brought on record by the Revenue that actual income of the assessee was 25% and not 10.75%. The assessee has given the explanation that the extra work is done by the builder as service to the buyer of the bungalows. The extra work is not done with the profit motive and usually, it is done either on no profit or no loss basis or on negl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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