TMI Blog2017 (1) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 271(1)(c) should be levied where additions are made on estimations. Further, no penalty u/s. 271(1)(c) can be levied merely on the ground that the assessee has agreed for the addition. - Decided in favour of assessee - ITA No. 291/PUN/2013 - - - Dated:- 18-1-2017 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Sunil Ganoo For The Revenue : Shri Anil Chaware ORDER PER VIKAS AWASTHY, JM : This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Aurangabad dated 03-12-2012 for the assessment year 2008-09, confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed the levy of penalty and rejected the appeal of assessee. Now, the assessee is in second appeal before the Tribunal assailing the order of Commissioner of Income Tax (Appeals) confirming the levy of penalty. 3. Shri Sunil Ganoo appearing on behalf of the assessee submitted that the addition of ₹ 5,11,000/- made on account of shortage of stock and unexplained investment does not warrant levy of penalty. The ld. AR pointed that a perusal of assessment order would show that the penalty has been levied on the GP percentage of 40.18% of stock shortage, which works out to ₹ 4,81,725/- and unexplained investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the assessment proceedings and penalty proceedings are two independent and separate proceedings. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Dharamchand L. Shah reported as 204 ITR 462 has held : It is by now trite law that the assessment proceedings and penalty proceedings are two separate and distinct proceedings. The fact that certain additions were made in the assessment proceedings would not automatically justify the Revenue to impose penalty under section 271(1)(c) of the Act. Thus, any addition made during assessment ipso facto would not result in levy of penalty. 6. In the present case, we find that the Assessing Officer during assessment proceedings has made addition in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 271(l)(c) of the Act shall not be levied on the assessee. The penalty has also been levied for trading addition on account of low GP which is based on estimation only and hence not sustainable. We find that similar additions made in the other group cases of the assessee were deleted by the CIT(A) and the Revenue has not filed an appeal to the Tribunal. We find that the assessee has filed confirmation regarding the purchase of cloth from M/s Royal Fabrics, Mumbai, wherein their income-tax file number, is also mentioned. In the facts of the case, we find that material pointed out by the Revenue may be sufficient to sustain the addition in the quantum case but is not sufficient to penalise the assessee under section 271(l)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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