TMI Blog2014 (6) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnish complete vouchers in respect of expenses claimed. It is also noted by the Assessing Officer in the penalty order that the books of account of the assessee were rejected by the Assessing Officer u/s 145(3) of the Act and the Assessing Officer estimated the income by allowing expenses on estimate basis. Under these facts, the judgment of Naresh Chand Agarwal vs. CIT [2013 (6) TMI 68 - ALLAHABAD HIGH COURT ] by Learned A.R. of the assessee is squarely applicable. In that case also, the income was assessed by the Assessing Officer by applying the net profit rate of 8% and it was held by Hon'ble High Court that when the addition is made on estimate basis, no penalty u/s 271(1)(c) can be imposed. In the present case also, the disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Learned D.R. of the Revenue supported the penalty order whereas Learned A.R. of the assessee supported the order of CIT(A). He placed reliance on the judgment of Hon'ble Allahabad High Court rendered in the case of Naresh Chand Agarwal vs. CIT as reported in [2014] 98 DTR (All) 280. 4. We have considered the rival submissions, perused the material available on record and gone through the orders of the authorities below. In the present case, the issue was decided by CIT(A) as per various paras on page 7 to 9 of his order. These paras are reproduced below for the sake of ready reference: 5 . Decision The finding given by the A.O. in this regard in the quantum proceedings has already been reproduced above. On perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. But the fact remained that since the training being imparted in these centres was on stipulated norms, similar kind of expenditure was expected to be incurred as was incurred at other Such infirmity of non-production of bills and vouchers could give rise to disallowances in quantum proceedings, but in absence of any positive finding given by the A.O. in this regard, such infirmity would not be sufficient for levy of penalty u/s 271(1)(c) . It is a trite law that every addition does not warrant levy of penalty. Refer to the decisions of the Hon'ble Allahabad High Court in the case of CIT vs Mata Prasad {(2005) 278 ITR 354}, Jumabhai Premchand (HUF) (243 ITR 812), CIT Vs Traders and Traders (244 ITR 367 (Mad)}, CIT vs Bhartesh Shah [( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to sec, 271(1)(c): The department is not bound to prove any malafideness or mens rea on the part of the assessee but a claim made by the assessee under bona-fide belief and impression, but disallowed by the A.O, shall not be subject to any penalty in case the assessee has been able to prove and establish that the claim of deduction was made bona-fide. In the instant case, it is clear that the assessee's claim was partly disallowed for want of evidence like original bills and vouchers but it was not the case where the claim of the assessee was found to be false and mala-fide one as such claim of expenditure was (made by the assessee) based on the bills and vouchers and in some cases, on the basis of account statements submitted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account of the assessee were rejected by the Assessing Officer u/s 145(3) of the Act and the Assessing Officer estimated the income by allowing expenses on estimate basis. Under these facts, the judgment of Hon'ble Allahabad High Court cited by Learned A.R. of the assessee is squarely applicable. In that case also, the income was assessed by the Assessing Officer by applying the net profit rate of 8% and it was held by Hon'ble High Court that when the addition is made on estimate basis, no penalty u/s 271(1)(c) can be imposed. In the present case also, the disallowance is made on estimate basis and respectfully following this judgment, we are of the considered opinion that there is no infirmity in the order of CIT(A) and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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