2012 (11) TMI 423

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....1)(c ) of Rs.3,93,321/-. 2. On the facts and in the circumstances of the case, the ld. CIT(A)-XI, Ahmedabad ought to have upheld the order of the A.O. 3. It is therefore prayed that the order of the ld. CIT(A)-XI, Ahmedabad may be set aside and that of the A.O. be restored." 3. Brief facts, till the stage of imposition of penalty by the A.O. are noted by ld. CIT(A) in para No.2 of his order which is reproduced below:- "The only ground in this appeal is directed against the levy of penalty under section 271(1)(c ) of the I.T. Act, 1961 amounting to Rs.3,93,321/- by A.O's order dated 31.03.2008. The observations of the assessing officer in the penalty order are summarized as under:- 1. The following additions/disallowances were....

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....ncome. It is, therefore, concluded that the assessee is having nothing to offer in the matter. On the basis of the above observations, the A.O. proceeded to levy penalty of 3,93,321/- u/s 271(1)(c ) of the Act." 4. Being aggrieved the assessee carried the matter in appeal before ld. CIT(A) who has cancelled the penalty and now the Revenue is in appeal before us. 5. Ld. D.R. of the Revenue supported the penalty order. He placed reliance on the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication Pvt. Ltd. reported in 327 ITR 510 (Delhi). As against this ld. A.R. of the assessee supported the order of ld. CIT(A) and placed reliance on the judgment in the case of Hon'ble Gujarat High Court rendered in the cas....

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....low as per the A.O. and on such addition penalty was also imposed by him u/s 271(1)(c) of the I.T. Act. On these facts, it was held by Hon'ble Gujarat High Court that the addition in the assessment order is alright but in the proceeding for imposition of penalty, that fact alone was not sufficient and the burden was on the department to prove concealment of income which was not discharged by the department. Hence, it is seen that as per this judgment of Hon'ble Gujarat High, Court estimated addition is not sufficient for levy of penalty u/s 271(1)(c) of the I.T. Act. In the present case, we have noted that the A.O. estimated the turn over of the assessee at Rs.5 crores and also estimated the G.P. rate of the assessee 32% and made addition o....