TaxTMI 
TaxTMI 
The addition u/s. 40A(2)(b) was made by disallowing 10% of labour charges to relatives on estimated basis. The AO did not have any finding regarding reasonbility of the expenditure covered u/s. 40A(2)(b). In addition on lumpsum basis were made. In addtion to this penalty u/s. 271(1)(c) has been imposed giving reason that inaccurate particular of income provided. So. let me know is there any decision against the penalty imposed?
Additions u/s 40A(2)(b) and Penalty u/s 271(1)(c) on ground of inaccurate particular of income
31 Mar 2010 
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Penalty for inaccurate particulars requires concealment; estimates alone do not automatically attract penalty in tax assessments.
Addition resulted from a ten percent estimated disallowance of labour charges to relatives made without findings on reasonableness; the assessee's factual acceptance and the lump-sum nature of the addition are disputed. A penalty for furnishing inaccurate particulars was imposed, but such a penalty requires proof of concealment or inaccurate particulars, and an estimate-based disallowance alone does not automatically attract the penalty. (AI Summary)
Addition resulted from a ten percent estimated disallowance of labour charges to relatives made without findings on reasonableness; the assessee's factual acceptance and the lump-sum nature of the addition are disputed. A penalty for furnishing inaccurate particulars was imposed, but such a penalty requires proof of concealment or inaccurate particulars, and an estimate-based disallowance alone does not automatically attract the penalty. (AI Summary)