2022 (7) TMI 119

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.... arises against the penalty levied under Section 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 ....

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....turnover) 17,22,10,000/- @ 0.02% 34,442/- Import made 74,82,76,429/- @ 0.20% 14,96,553/- 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 assesse....

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....ered the rival submission of both the parties and perused the material available on record. We have also gone through the orders of the lower 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 IT....

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....unds of appeal on or before the date of hearing." 10. Since the facts in this appeal is similar as in ITA No. 133/Srt/2021 for the Assessment year 2014-15, except variation of addition. The Assessing Officer completed the assessment under Section 143(3) r.w.s. 147 of the Act on 27/03/2015 by making certain additions on estimation basis. The Assessing Officer made following additions: Sales Amount Rate of commission Commission income Total turnover 29,31,28,138/-     Total Import 22,22,18,082/-     Total turnover (Excluding import & group turnover) 7,09,10,056/- @ 0.02% 14,182/- Import made 22,22,18,082/- @ 0.20% 4,44,436/- Loan outstanding at year end 1....