TaxTMI 
TaxTMI 
2013 (12) TMI 1107
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.... penalty order which was based on the evidences of unaccounted production found during the course of search action. 2. On the facts and in the circumstances of the case, the order of the AO be restored and that of the CIT(A) be vacated. 2. Brief facts of the case are that Shree Om Rolling Mills Pvt. Ltd., is a private limited company engaged in the business of manufacture of mild steel bars and TMT bars and SRJ Peety Steel Pvt. Ltd. is a private limited company engaged in the manufacture of ingots and billets. The details of returned income, addition made by the Assessing Officer, addition confirmed by the CIT(A) and penalty levied u/s.271(1)(c) are as under: ParticularsShree Om Rolling Mills Pvt. Ltd. SRJ Peety Steels Pvt.....
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....ressed sale on 15th & 16th March were found in bedroom at residential premises of Shri Surendra Peety and not at the factory premises or office of the appellant. In the statement recorded of Shri Surendra Peety u/s 132(4) it has been clarified that the said papers are in respect of his trading activity and profit in respect of the same has been declared as additional income. The said income has been declared in the return of income filed by Shri Surendra Peety for A.Y.2006-07. (iii) No evidence has been found in search action u/s 132 or post search proceedings about suppression of sale on day-to-day basis or parallel line of production or clandestine removal of goods from the factory premises of the app....
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....bsp; "..... But the case of this huge turnover is not supported by any other materials/information collected in the course of search. There is no case of any corresponding cash, bullion, asset, investment or expenditure commensurate to this alleged huge amount of unaccounted turnover. There is no evidence on record to shown that the appellant has destroyed any secret slips in anticipation of the search. In view of the above predominant features, we find that there are no empirical evidences against the appellant so as to extrapolate the suppressed turnover on the basis of a daily average for the entire previous year period concerned." (Para-15) The facts of the case under appeal are identica....
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....71(1)(c) cannot be levied in respect of estimated additions made on the basis of certain presumptions. The A.O. is, therefore, directed to cancel the penalty of Rs.70,66,904/- and Rs.7,92,074/-levied u/s 271(1)(c) of the Act in the cases of Shri Om Rolling Mills Pvt. Ltd. and SRJ Peety Steel Pvt. Ltd. respectively. Ground Nos.5, 6 & 7 on merits of the case stand allowed. 4. Stand of the Revenue before us is that penalty order was based on the evidence of unaccounted production found as a result of search action. The additions have been confirmed which were made on the basis of details of sales on 15.03.2006 and 16.03.2006 of TMT bars 313 TMT found during the course of search. In this background, Ld. Departmental Representative submitted th....