TMI Blog2022 (9) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 271(1)(c) can be sustained in the case of estimated addition - See M/S. NORTON ELECTRONICS SYSTEMS PVT. LTD [ 2014 (2) TMI 606 - ALLAHABAD HIGH COURT] Also in the case of CIT vs. Modi Industrial Corpn.[ 2009 (11) TMI 891 - PUNJAB HARYANA HIGH COURT] has also held that where the assessment of the assessee was completed on estimated basis penalty under Section 271(1)(c) of the Act was not imposable with respect to the additions made on such estimate by the Assessing Officer. We are of the opinion that no penalty under Section 271(1)(c) of the Act can be sustained on account of addition made by the authorities below based on estimation. Accordingly, we hereby set-aside the order of the Ld. CIT(A) and direct the AO to delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance, he Coordinate Bench of the Tribunal in ITA No. 957/PN/2011 in the case of Shri C.P. Mohandas Vs. DCIT decided on 29-05-2015 has deleted the penalty on similar grounds. 3. The only effective issue raised by the assessee that the Ld. CIT(A) has erred in confirming the penalty levied under the provision of Section 271(1)(c) of the Act for Rs. 1,38,326/-. 4. The facts in brief are that the assessee in the represent case is an individual and claimed to be engaged in the business of providing services in relation to all type of pipe fabrication, laying, coating and erection work. In the present case, the assessment was framed by the AO by estimating the net profit of the assessee @8% of the total turnover, determining the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year under consideration. The AO has estimated the net profit of the appellant @ 8% of the contractual receipt and has accordingly made addition ofdifferentia! amount i.e. the differential amount between the net profit declared by the appellant @ 4% and the net profit estimated by the AO @ 8%. The appellant has admitted his failure regarding non production of bills and vouchers in respect of transactions before the AO and has not filed any appeal against the assessment order u/s. 143(3) of the Act of the AO to the CIT(A). Admittedly, the appellant failed to furnish accurate particulars of income during the course of assessment proceedings in support of his claim of gross profit of 15.64% and net profit of 4%. In view of these fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on account of concealment of the particulars of income which came to be confirmed at Rs.1,38,326/- being hundred percent of the tax amount sought to be evaded. The amount of penalty was subsequently confirmed by the Ld. CIT-A. 9. Coming to levy of penalty on the addition of income being estimated profit on the amount of sale, in this regard, we find that the quantum proceeding and the penalty proceeding are different. Any addition or disallowances made under quantum proceeding do not ipso facto empower the revenue authority to levy penalty under Section 271(1)(c) of the Act. Further the addition made was based on estimation and it settled position of law by the various Hon ble High court that no penalty under Section 271(1)(c) can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect to the additions made on such estimate by the Assessing Officer. 11. Likewise the Patna High Court in case of CIT vs. Kailash Crockery House [1999] 235 ITR 544/107 Taxman 386, also in identical circumstances held as under: For the assessment year 1979-80, the Assessing Officer enhanced the gross profit rate adopted by the assessee, running crockery business. As a result he made certain trading additions. In view of discrepancy between the income returned and income assessed, the Assessing Officer imposed penalty under section 271(1)(c). On appeal, the AAC affirmed the order of the Assessing Officer. On second appeal, the Tribunal specifically found that there was no finding of concealment of income by the lower authorities, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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