TaxTMI 
TaxTMI 
2019 (1) TMI 749
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....e assessee is a company engaged in the business of transport of goods by hiring trucks and it has its own labour required for loading and unloading the goods on the trucks. For the assessment year 2004-05 they have filed their return of income on 28/10/2004 declaring an income of Rs. 1,38,230/-and the assessment was complete by order dated 18/12/2006 under section 143(3) of the Income Tax Act, 1961 (for short "the Act") at Rs. 16,14,460/-by making certain additions including Rs. 9,45,185/-on account of trading additions relating to freight charges by enhancing the GP rate from the declared 7.69% to 12%; Rs. 2,50,000/-on account of the loans received from director Shri AK Sharma and his wife Smt. Bindu Sharma treating it as Income from undis....
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....CIT(A), and the Ld. CIT(A) by following the decision of the Hon'ble Supreme Court in the case of union of India vs. DharamendraTextiles 306 ITR 277, confirmed the penalty. Assessee is, therefore, in this appeal before us stating that the assessee company has neither furnished inaccurate particulars of its income nor had concealed any income so as to attract the penal provisions of Section 271(1)(c) of the Act and the penalty sustained is liable to be cancelled in toto inasmuch as no satisfaction has been recorded in the assessment order while making addition with regard to application of gross profit in the books of accounts. It is further submitted that the assessee company had filed required evidence for taking loan from Smt. Bindu Sharma....
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....e is merely on estimate basis and further the fact that Ld. Assessing Officer estimated the same at 12% as against the 7.69% declared by the assessee and in spite of the fact that in the previous year it was only 9.14%. In the quantum appeal, the 1st appellate authority observed that considering the increase in sundry creditors liability, learned AO estimated the gross profit by applying the rate of 12% without citing any comparable case in the order in which the GP rate of 12% was declared. 10. On appreciation of the facts including the GP rate declared for the earlier years, Ld. CIT(A) thought it fit to adopt the GP rate of 9% giving some margin for the increase in turnover and on that premise, Ld. CIT(A) deleted the addition to the ex....
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....ses where the income of an assessee is assessed on estimate basis and additions are made therein by such decisions. It was further held in such decisions that if the addition made on the basis of estimate and not on account of any concrete evidence of concealment, then the penalty is not leviable and cannot be sustained. 12. Next coming to the levy of penalty on account of confirmation of addition of Rs. 1 lakh loan received from Smt. Bindu Sharma who was drawing salary from the assessee company and the wife of the director, is concerned there is no dispute as to the identity of Bindu Sharma and the learned Assessing Officer never doubted the same. Addition was made on the ground that the source of Bindu Sharma was not proved. Insofar as....