TMI Blog2010 (6) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany engaged in the business of manufacturing of steel ingots. For the assessment year under appeal, it filed the return of income declaring NIL income. In the statement of income, the assessee had shown business loss of ₹ 5,29,14,911/-. The Assessing Officer framed the assessment under section 143(3) on 29.03.2006, wherein he made the following two additions :- (A) Addition on account of unaccounted sales ₹ 3,05,32,388/- (B) Disallowance of power expenses ₹ 1,52,92,302/- 3. In quantum appeal, the Learned Commissioner of Income Tax(Appeals) took the view that entire unaccounted sales cannot be made. The Learned Commissioner of Income Tax(Appeals) directed the Assessing Officer to adopt the average G.P. rate of last th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of power expenses (GEB) amounting to ₹ 1,52,92,302/- observing that there is no lack of bona fide belief or failure to disclose necessary material. All the material facts were on record and, therefore, the case of the assessee does not fall within the purview of provisions of section 271(1)(c) of the I.T. Act. Aggrieved by the order of Learned Commissioner of Income Tax(Appeals), the Revenue is in appeal before the Tribunal. 5. At the time of hearing before us, on behalf of Revenue Shri Anil Kumar, D.R. appeared and contended that in the assessment order, the Assessing Officer disallowed entire unaccounted sales of ₹ 3,05,32,388/-. In quantum appeal, the Learned Commissioner of Income Tax(Appeals) directed to apply th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee submitted that Central Excise officials merely estimated the production, which is not recorded in the books and took the view that the assessee might have sold the said production outside the books of accounts. The Learned Commissioner of Income Tax(Appeals) directed the Assessing Officer to adopt average G.P. After giving the appeal effect to the order of Learned Commissioner of Income Tax(Appeals), addition of ₹ 3,05,32,388/- was restricted to ₹ 5,95,382/-. The entire addition has been made on estimate basis and the facts of assesee s case are identical with that of the judgment of the Hon'ble Gujarat High Court in the case of Navjivan Oil Mills vs.- CIT [252 ITR 417], therefore, the view taken by the Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) restricted the said addition to ₹ 5,95,382/- (by applying average GP rate @ 1.95% of ₹ 3,05,32,388/-). Thus the entire addition was made on estimate basis, i.e. by estimating the production outside the books of accounts and its sale. On these facts, penalty under section 271(1)(c) is not leviable as held by the Hon'ble jurisdictional High Court in the case of Navjivan Oil Mills vs.- CIT [252 ITR 417], which is relied by the Learned Commissioner of Income Tax(Appeals). In respect of other addition also, keeping in view the judgment of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. reported in [2010] 322 ITR 158 (SC), penalty under section 271(1)(c) is not leviable. On perusal of reasoning gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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