TaxTMI 
TaxTMI 
2013 (9) TMI 449
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....tion. The sole surviving ground No.1 is reproduced herein under:- "1 On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied u/s. 271 (1) ( c ) of the Act of Rs.8,24,787/- by the A. O. for concealment of income or furnishing of inaccurate particulars of income, without appreciating the facts of the case." 3. The facts of the case are that the assessee is a Partnership Firm engaged in the business of diamond cutting and polishing on job work basis. The assessee had claimed labour expenses, salary wages and miscellaneous expenses of Rs.1,37,46,363/. The learned AO disallowed 20% of Rs.1,37,46,363/- and made addition of Rs.27,49,273/- and levied penalty of Rs.8,24,787/- ....
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.... Rs. 17,050 3. Salary & wages Expenses Rs. 3,95,500 4. Miscellaneous expenses Rs. 85,762 Total Rs. 13746363 3. The Hon'ble CIT(A) had confirmed the addition of Rs.27,49,273/- on the ground that the books of accounts were rejected and that despite ample opportunities given to the assessee to produce the workers the appellant simply produced the registers of wages, vouchers, salary registers and various bills of expenses. The appellant had also not maintained day to day production registers for job work of diamonds. 4. The complete details of the persons to whom labour payments we....
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....p; v. The Assessing Officer admitted to have received copies of wage registers which were submitted after verification of original register by Assessing Officer. The Registers reveal the piece wise records of work done. vi. In para "h" the Assessing Officer accepted to have verify labour Registers and piece wise production details. vii. The postal addresses of workers are not maintained by appellant as most of the workers come from the nearby villages of partners of appellant firm i.e. from Sauras....
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....e disallowance made by Assessing Officer is excessive, unreasonable and on the basis of presumption only. 6. The Gross Profit of assessee is 9.02%. In most of the case of diamonds in Range-8 and Rnge-9 Gross Profit of 6% is estimated in diamond business. The copy of Order of NBA Diamonds Mfg. Co. is enclosed in which Gross Profit of 6% was estimated and your honour had confirmed the same. 7. In the case of Vanmalibhai Bhagwanbhai Patel V/s. ITO the Hon'ble ITAT Ahmedabad Bench deleted the addition of 10% of labour expenses disallowed by Assessing Officer. The copy of ....
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....the case of ITAT Ahmedabad Bench "B" in the case of Anish B. Shah (HUF) bearing ITA No.2223/Ahd/2004 for A. Y. 2001/02 dated 06.01.2005, wherein an observation was made that when the assessee has furnished the details of the labourers and the services rendered, merely because the assessee was unable to produce the labourers could not be said to be that no services were rendered by such labourers. It was also a case of processing of diamond and the assessee was asked to produce 20 labourers. In that case, it was explained that the assessee has failed to produce those labourers who had come from outside and did not have a permanent address at Surat. But the plea was that the assessee had given the details of the work done by the labourers. By....
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....p; iv. The decision of the Hon'ble Allahabad High Court in CIT vs. Harman Singh reported at 106 ITR 532." 3.2 The learned CIT(A) after taking into consideration of the above submissions of the assessee deleted the penalty of Rs.8,24,787/- levied by the learned AO vide his order dated 29-03-2011 by observing that penalty is not required to be levied when addition is made on estimate basis. Aggrieved by this order of the learned CIT(A), the revenue is now in appeal before us. 4. During the course of hearing before us, the learned DR relied on the order of the learned AO. However, none appeared on behalf of the assessee. 5. We have heard the learned DR and perused the materia....