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2015 (12) TMI 283 - ITAT LUCKNOW

2015 (12) TMI 283 - ITAT LUCKNOW - TMI - Penalty u/s 271(1)(c) - whether penalty could not be levied where income has been enhanced merely on estimates as submitted by assessee - Held that:- The objections of the A.O. were that assessee had produced the books of account and various vouchers but the assessee has made petty cash payment against various expenses and primary vouchers for supporting the claim were not produced. There was one more objection of the AO that day to day stock inventory of .....

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Court] we hold that in the facts of the present case, levy of penalty on estimated addition is not justified and therefore, we delete the penalty. - Decided in favour of assessee. - ITA No.938/LKW/2014 - Dated:- 31-8-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : None For The Respondent : Smt. Pinki Mahavar, D.R. ORDER PER A. K. GARODIA, A.M. This is an assessee s appeal directed against the order passed by learned CIT (A)-II Dehradun .....

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was held that there was concealment of income or furnishing of inaccurate particulars of income. 4. Because the learned commissioner of income tax has not held in the appellate order as to how the rulings as cited by us were not applicable and in what ways the ruling cited by him were applicable in our case and accordingly his order is incomplete and arbitrary. 5. That no penalty could be imposed when income is estimated and a higher GP rate is applied. 6. That the assessment and appellate orde .....

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otice is presumed. None appeared on behalf of the assessee on the appointed date of hearing i.e. 27.07.2015 and therefore, the appeal was heard ex-parte qua the assessee. Ld. DR of the Revenue supported the orders of the authorities below. 4. We have considered the submission of Ld. DR of the Revenue and gone through the orders of the authorities below. 5. Issue in dispute was decided by the Ld. CIT (A) as per Para 3.2 of his order, which is reproduced below for the sake of ready reference:- 3.2 .....

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in 219 ITR 157 (Mad); and also (iv) CIT vs Harprasad & Co. Ltd. reported in 328 ITR 53 (Del) 6. From the above Para from the order of the Ld. CIT (A), it is seen that the only argument which was raised before the CIT (A) was this that the penalty could not be levied where income has been enhanced merely on estimates and in support of this contention, reliance was placed on the Tribunal s decision rendered in the case of the ITO Vs. Madan Lal reported in (2003) 78 TTJ 573 (Jod.). 7. As agains .....

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y the Tribunal as well as by the Hon ble High Court by making this observation that in deciding whether penalty can be imposed in a given case, the entirety of the circumstances must be taken into account. It was also held that in a case, where additions has been made purely on estimate without reference to any evidence/material being on record, in such case, it could be argued with some force that penalty cannot be levied on the figures which are merely based on guess work or estimate. But in a .....

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s the objection of the AO that the assessee has made petty cash payment against various expenses and primary vouchers for supporting the claim were not produced. 4 8. There was one more objection of the AO that day to day stock inventory of raw material and other consumable item was not maintained. On the basis of these general objections, the AO made addition by adopting higher G.P. rate of 18.50% as against 18.02% declared by the assessee. Hence, it is seen that in the present case, the judgme .....

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