Section 271(1)(c) Penalty Invalidated: AO's Ad Hoc Salary Disallowance Lacked Concrete Evidence of Incorrect Taxpayer Claims.

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....Penalty u/s 271(1)(c) - when we examine penalty levied on account of salary disallowance AO has merely made adhoc addition by way of guess work and the AO has not arrived at a definite decision that the assessee has made wrong claim qua the expenditure on account of salary and wages. It is also settled principle of law that on the basis of any adhoc addition penalty proceedings under section 271(1)(c) of the Act cannot be levied. - AT....