2022 (1) TMI 528

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.... 2. Briefly stated the facts are that, assessee an individual, proprietor of M/s. Siddharth Trading Company engaged in the business of distributor and dealer in Engineering goods, filed return of income on 03.08.2011 declaring income of Rs..73,30,653/- for the A.Y.2010-11. The case was selected for scrutiny by issuing notice u/s. 148 of the Act and assessment was completed on 17.03.2015 u/s. 143(3) r.w.s 147 of the Act determining the income at Rs..95,33,714/-. While completing the reassessment the Assessing Officer treated purchases of Rs..22,03,061/- made from various dealers as non-genuine on the basis of the information received from Sales Tax Department, Mumbai that assessee has received accommodation entries from various dealers with....

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....CIT(A), revenue is in appeal before us. 4. Ld. Counsel for the assessee reiterated the submissions made before the Ld.CIT(A). Ld. Counsel for the assessee further submitted that the penalty cannot be imposed when the estimation is made on adhoc basis and requested to delete the penalty levied by the Assessing Officer. 5. Ld. DR vehemently argued and supported the orders of the Assessing Officer. 6. Considered the rival submissions and material placed on record. It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In the instant case the Assessing Officer treated entire alleged bogus purchases as non-genuine which was partly confirmed by the Ld.CIT(A). On further appeal the ITAT estimated t....

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.... we hold that there is no concealment of income or furnishing of inaccurate particulars of income. Thus we direct the Assessing Officer to delete the penalty levied u/s. 271(1)(c) of the Act." 8. Further, the Hon'ble Punjab & Haryana High Court in the case of Harigopal Singh v. CIT [258 ITR 85] held as under: - "3. On further appeal, the Tribunal reduced the addition to Rs. 1,50,000. Hence, the income was finally assessed at Rs. 1,50,000 against the declared income of Rs. 52,000. The Assessing Officer initiated penalty proceedings against the assessee by invoking Section 271(1)(c) along with the Explanation 1(B) of the Act on the plea that he had concealed the particulars of his income. A show-cause notice was issued to him ....

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.... is necessary that there must be concealment by the assessee of the particulars of his income or if he furnishes inaccurate particulars of such income. What is to be seen is whether the assessee in the present case had concealed his income as held by the Assessing Officer and the Tribunal. He had not maintained any accounts and he filed his return of income on estimate basis. The Assessing Officer did not agree with the estimate of the assessee and brought his income to tax by increasing it to Rs. 2,07,500. This, too, was on estimate basis. The Tribunal agreed that the income of the assessee had to be assessed on an estimate of the turnover but was of the view that the estimate as made by the Assessing Officer was highly excessive and it fi....