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TMI Blog2018 (4) TMI 1997X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1496/Ahd/2013/SRT read as follows: 1. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) has erred in restricting the addition of Rs.34,53,232/- from Rs. 1,24,01,628/- made by the A.O. for various disallowances and addition u/s.68 of the Act disregarding the finding of the A.O. in assessment proceedings and ignoring the fact that the addition made by the A.O. are as per the provisions of the Act, in addition to the regular profits offered/arising from business. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld.CIT(A), Surat may be set-aside and that of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order and mush less, without bringing any tangible material during the penalty proceedings to prove any act of concealment of income by the appellant, is without jurisdiction, bad in law, perverse, illegal and liable to the quashed. ITA No.1496/Ahd/2013/SRT: 4. We have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal. The ld. Departmental Representative (DR) submitted that the ld. CIT(A) has erred in restricting the addition of Rs.34,53,232/- from Rs. 1,24,01,628/- made by the Assessing Officer(AO) for various disallowances and additions u/s.68 of the Income Tax Act, 1961 (for short 'the Act') disregarding the finding of the A.O in assessment proceedings and ignoring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of the assessee. After considering the entire facts and circumstances the ld. CIT(A) held that while there is a marginal improvement in the net profit, the fall in G.P is to the extent of 12.66% on the turnover of Rs. 3,45,32,320/- comes to Rs. 43,71,792/- and disallowances like excavation expenses, labour expenses and cement expenses etc., affect the gross profit. Finally, the first appellate authority estimated net profit @ 10% of turnover and total income of assessee was taken Rs. 34,53,232/-. 7. From para 17.6 of first appellate order, we observe that the ld. CIT(A) after considering the entire facts and circumstances and GP/NP rate of assessee for preceding year and the amounts of additions/disallowances made by the A.O, except add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, etc. produced vide various written submissions and hence, the penalty u/s 271(1)(c) of the Act for the alleged concealment of income confirmed by the CIT (Appeals) is liable to be struck down. 9. The ld. AR vehemently contended that both the lower authorities have grievously failed to see and consider in the right and proper perspectives that the additions/disallowances confirmed in the quantum/assessment proceedings was purely on estimation and presumption of net profit earning ratio in due consideration of the cogent and authentic evidences and books of accounts furnished an therefore, the action of the lower authorities in confirming the penalty for the alleged concealment of income solely on reproduction of the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income or whether any inaccurate particulars of income has been furnished by the assessee then, penalty cannot be held as sustainable. 12. Replying to the above, the ld. CIT-DR supported the orders of the authorities below and submitted that the assessee claimed expenses which were not verifiable. Therefore, estimation of income was done by the ld. CIT(A). In this situation, assessee is liable for penalty u/s. 271(1)(c) of the Act. 13. On careful consideration of above rival submissions, we are of the view that undisputedly A.O made additions by disallowing various expenses and the ld. CIT(A) after considering entire facts and circumstances restricted the addition to 10% of turnover and it was done by estimation of income by foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of New Sorathia Engg. Co. (Supra) penalty u/s. 271(1)(c) of the Act cannot be held as sustainable and valid. Further more, as per decision Ho'ble High Court of Chhattisgarh in the case of CIT vs. Vijay Kumar Jain 325 ITR 378 (Chhattisgarh) as also relied by the ld. AR, penalty for concealment of income u/s. 271(1)(c) of the Act cannot be imposed in the case of estimation of income. 14. On the basis of following discussion, we reach of a logical conclusion that the A.O imposed penalty without any valid reason on the basis of addition based on estimation basis and the same was upheld by the ld. CIT(A) without any reasonable and acceptable cause. Hence, penalty order as well as first appellate order is not sustainable and we direct the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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