2016 (7) TMI 1526

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....y order are that the assessee is a Contractor and its books of accounts were rejected during the assessment proceedings and the income of the assessee was computed after applying net profit @ 8%, and the assessee was imposed with the penalty u/s 271(1) (c ) of the Act. 4. Aggrieved with the order the assessee filed appeal before learned CIT(A) who also upheld the penalty order by holding as under: "In this case the A.O. has levied a penalty u/s 271 (1)( c) of the income tax act, 1961 on account of applying higher net profit rate after rejecting the books of accounts of the assessee. It is clear from the assessment order and submission of the assessee that the assessee has not maintained proper books of accounts hence accurate income or....

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....in a large number of cases, it has been held that where the income of the assessee has been assessed on estimation basis the penalty u/s 271(1) (c) was not imposable. Reliance in this respect was placed on the following case laws. i) CIT vs. Bhoj Raj Ltd. (2001) 247 ITR 697 (P&H) ii) CIT vs. Kailash Crockery House (1999) 235 ITR 544 (Pat) iii) CIT vs. Subhash Trading Company (1996) 221 ITR 110 (Guj) iv) CIT Aarkay Saree Museum (1991)187 ITR 147 (Bom) v) Addl. CIT vs Chandravilas Hotel (1987) 165 ITR 300 (Guj) vi) CIT vs. K.A. Rajappa Chettiar (1985) 153 ITR 215 (Mad) 8. The learned DR, on the other hand, relied upon the orders of authorities below. 9. We have heard the rival parties and have gone through the material p....