2022 (7) TMI 119

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....ction 271(1)(c) of the Income Tax Act, 1961 (in short, the Act) for the assessment years (AY) 2007-08 and 2014-15 respectively. 2. In both these appeals, the assessee(s) have raised certain common grounds of appeals, certain facts are common in both the appeals, thus, both the appeals are clubbed and heard together and are decided by this consolidate order to avoid the conflicting decision. For appreciation of fact, the appeal for A.Y. 2014-15 in ITA No. 133/Srt/2021 is treated as 'lead' case, wherein the assessee has raised following grounds of appeal: "1. On the facts and circumstances of the case and law, the ld. CIT(A) erred in confirming levy of penalty of Rs. 270996/- on basis of invalid notice under Section 274 r.w.s. 271(1)(c) of....

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....- Loan outstanding at year end 3,74,22,500/- @ 0.50% 1,87,113/- Total commission income earned     17,18,108/- Deduction of expenses of 25% is given for paper transactions & related cost as the such 4,29,527/- Income Assessed 12,88,581/- 3. On appeal before ld CIT(A), the additions in the quantum assessment was upheld. The Assessing Officer while passing the assessment order initiated the penalty under Section 271(1)(c) of the Act. The assessing officer after receipt of order of ld CIT(A) in quantum assessment issued notice under Section 274 r.w.s. 271(1)(c) to the assessee. The assessee vide his reply dated 10/09/2018 contended that the appeal of assessee in quantum assessment was dismissed vide order dated 26/04/201....

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....r authorities. We find that there is no dispute that the addition in the assessment order under Section 143(3) r.w.s. 147 dated 29/01/2016 was made on estimation basis, which we have recorded above. It is settled law that no penalty is leviable on estimated addition. In this regard, we draw strength from the following decisions: * Manish Dhirajlal Mehta Vs ACIT in Tax Appeal No.461 & 464 of 2000 and 833 & 836 of 2005 dated 05.02.2014 (Gujarat High Court); * Vijay Proteins Ltd., Vs CIT (Income Tax Reference No.139 of 1996), (Gujarat High Court); * Awadhesh Bansiraj Pandey Vs ITO (ITA No.4784/ Mum/2018) Mumbai Tribunal and * DCIT Vs Anil J Kothari ( 2048/Ahd/2010), Surat Tribunal. 7. Considering the fact that addition in the assessme....