TMI Blog2019 (1) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the learned Assessing Officer to estimate the GP rate at 12%. At the same time CIT(A) also sustained a portion of the addition by adopting the GP rate at 9% by making reference to the GP rate in the earlier years, increase in the sundry creditor or liability and also in the turnover. All the circumstances suggest that the addition has no relation either to concealment of income or furnishing of inaccurate particulars thereof. In order to attract the provisions of Section 271(1)(c) there must be an allegation that there was concealment of income or furnishing of inaccurate particulars thereof, in the absence of which we find it difficult to sustain the penalty on this score. No penalty could be levied on the difference resulted due to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Commissioner of Income Tax (Appeals), Faridabad, {hereinafter referred to as the ld. CIT(A)}, assessee preferred this appeal. 2. Briefly stated relevant facts are that the assessee is a company engaged in the business of transport of goods by hiring trucks and it has its own labour required for loading and unloading the goods on the trucks. For the assessment year 2004-05 they have filed their return of income on 28/10/2004 declaring an income of ₹ 1,38,230/-and the assessment was complete by order dated 18/12/2006 under section 143(3) of the Income Tax Act, 1961 (for short the Act ) at ₹ 16,14,460/-by making certain additions including ₹ 9,45,185/-on account of trading additions relating to freight char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that extent the assessee must be held to have concealed and furnished inaccurate particulars of income to the extent of ₹ 4,07,534/-. 6. Aggrieved by this levy of penalty, assessee preferred an unsuccessful appeal before Ld. CIT(A), and the Ld. CIT(A) by following the decision of the Hon ble Supreme Court in the case of union of India vs. DharamendraTextiles 306 ITR 277, confirmed the penalty. Assessee is, therefore, in this appeal before us stating that the assessee company has neither furnished inaccurate particulars of its income nor had concealed any income so as to attract the penal provisions of Section 271(1)(c) of the Act and the penalty sustained is liable to be cancelled in toto inasmuch as no satisfaction has been reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Assessing Officer levied the penalty on the ground of the addition made on estimate basis and to the extent sustained by the Ld. CIT(A). Nevertheless fact remains that the enhancement or reduction of GP rate establishes that the same is merely on estimate basis and further the fact that Ld. Assessing Officer estimated the same at 12% as against the 7.69% declared by the assessee and in spite of the fact that in the previous year it was only 9.14%. In the quantum appeal, the 1st appellate authority observed that considering the increase in sundry creditors liability, learned AO estimated the gross profit by applying the rate of 12% without citing any comparable case in the order in which the GP rate of 12% was declared. 10. On appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 271 (1) of the Act, it is necessary that there must be concealment by the assessee of the particulars of his income or furnishing of inaccurate particulars thereof and the provisions of section 271(1)(c) of the Act are not attracted to cases where the income of an assessee is assessed on estimate basis and additions are made therein by such decisions. It was further held in such decisions that if the addition made on the basis of estimate and not on account of any concrete evidence of concealment, then the penalty is not leviable and cannot be sustained. 12. Next coming to the levy of penalty on account of confirmation of addition of ₹ 1 lakh loan received from Smt. Bindu Sharma who was drawing salary from the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, when he knows the matter is going to be examined by the Assessing Officer. 14. So also, in respect of the disallowance of Hamali charges, where learned Assessing Officer made an addition of ₹ 2,02,594/-and it was reduced to ₹ 20,000/-by the Ld. CIT(A) stating that the learned Assessing Officer had not brought any material on record to prove that part of such expenses were either false or bogus. It is clear that a claim was disallowed without recording a finding that such a claim is false or bogus. 15. In CIT vs. Reliance Petro products (P) Ltd.,(2010) 322 ITR 0158 Hon ble Supreme Court held that a mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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