TaxTMI 
TaxTMI 
2016 (11) TMI 448
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....e both the assessees are the members of same family and the issues involved in both the appeals are common, the same were clubbed and heard together and are being disposed of by this common order for the sake of convenience. ITA No. 2639/Mum/2015 A.Y. 2002-03 2. Since the facts and circumstances of both the case are identical except the amount involved, we take the facts of the ITA 2639/M/2015 as lead case. Survey action u/s 133A was carried out at the business premises of the assessee's husband at shop no. 4, Ram Gali, Pankaj Market, Champa Gali, Mumbai 400002, and the assessee and her son (assessee in ITA No 2638/M/15) were covered in the said survey action. Since the assessee admitted that she is engaged in issuing accommodation sale ....
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....lty on the addition of 6% of sales but in some years the addition was made at @ 4% of sales and 3% of purchases. However, in appeal the Tribunal, vide order dated 14/09/2016 changed the basis of estimation by holding that addition of 0.60% of turnover is reasonable. Since, the Tribunal has substantially changed the basis of estimation, penalty u/s 271(1)(c) cannot be imposed. Secondly, penalty cannot be levied where the addition is made on the basis of estimation; Thirdly, mere making of a claim which is not sustainable in law does not attract section 271(1)(c) of the Act and when there is a difference of opinion then penalty cannot be levied. The Ld. AR placed reliance on following cases: PCIT vs. Fortune Technocomps P. Ltd. ITA 313 of 201....
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.... find that Tribunal in case of Sanjay Kumar versus Garg vs. ACIT (supra) held that rate of commission cannot be more than 1%, but in present case, the assessee had already offered the same for taxation purpose but with rider of allowability of certain expenses against same. Hence, the rate of 6% adopted by Assessing Officer was highly one. Hence, the commission income was to be taken @ 0. 6% of sales turnover. Similar view has also been taken by the jurisdictional Mumbai Tribunal in case of Gold Star Finvest (P.) Ltd. vs ITO (2013) 33 taxmann.com129 (Mumbai - Trib.), wherein Tribunal held as under: "12. Having carefully examined the various Orders in the case of different assessees, it has become amply at that in these type of activities....
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.... accept the commission declared by the assessee and set aside the order of the CIT (A) in this regard." 6.2 we find that ITAT in case of Sanjay Kumar Garg (supra) has applied 0.2% commission on turnover and in Gold Star Finvest (P) Ltd. (supra) approved 0.15%. So, taking all factors into consideration, we hold that percentage of commission to be earned on turnover is reasonable at 0.6%. We hold so." 6. Admittedly, the AO had levied penalty in question under section 271 (1) (C) of the Act on the addition made on the basis of estimation and the basis of estimation was further changed substantially by the Tribunal in quantum appeal. As per the settled law penalty proceedings are different from assessment proceedings because the standard of ....