TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 535
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....Income on 29.06.2009 declaring total income of Rs. 14,84,23,270/-. Assessment came to be completed by passing u/s. 153A r.w.s. 143(3) of the Act vide order dated 31.12.2009 determining the total income as Rs. 24,84,23,270/- by making addition of Rs. 10 crores on account of alleged undisclosed investment made by the assessee. The Ld AO while completing the assessment as referred to Excise duty evasion as worked out by Director General of Customs, Excise and Intelligence (DGCEI). Subsequent to the search proceedings, Excise Authorities had conducted search and investigation on various Ceramic Industries in general. The primary allegation was that in order to evade excise duty, there was suppression in the MRP of the sales conducted by the assessee company. Further AO observed that from the cash generated by suppressing the MRP, various expenses including the purchase of raw material, transportation, labour expenses, etc. were incurred. The inquiries conducted by DGCEI were referred in Para 5 and Page 8 to 58 of the assessment order. The A.O. has also referred various undisclosed investment made by the assessee group, the details were referred in Para 11.9 of the assessment order. The....
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.... 271(1)(c) of the Act which is illegal and bad in law and liable to be cancelled. 7. Ld. Counsel Mr. Aseem Thakker appearing for the assessee submitted from the facts of the case, it would be noted that the entire basis of addition have been changed from assessment stage to two different appellate stages. The Assessing Officer made addition by way of unexplained investments on Gross profit basis, whereas Ld.CIT(A) adopted Net Profit as per the books of accounts on alleged suppressed turnover as per the show cause notice issued by DGCEI. Whereas the Hon'ble ITAT restricted the addition to 1% of the turnover as per the audited accounts. Thus the entire basis of addition has undergone a sea change. Therefore, profit and turnover has also been altered while adjudicating by the appellate authorities. In the above circumstances, penalty for concealment of income cannot be levied. 7.1. Further Ld.Counsel submitted on identical issue for the Asst. Years 2005-06 and 2006-07, Ld. CIT(A) allowed the appeal of the assessee company and the copies are placed in the Paper Book at Page Nos. 6 to 12. Further in the case of Group concerns namely Asian Tiles Ltd. on similar grounds for the Asst. Ye....
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....of investments have been deleted. In view of different estimates having been adopted at different stages and consequently the income determined purely on estimate basis in such cases penalty could not be leviable for filing concealment of income or furnishing inaccurate particulars of income by the assessee. 9.1. The above view of ours are supported by the Jurisdictional High Court Judgment in the case of CIT Vs. Valimkbhai H. Patel (cited supra) wherein it was held that penalty cannot be levied on an estimation of addition which was substituted by another estimation by observing as follows: "It was an admitted position that the assessee was carrying on business manufacturing salt and salt is stored in the open in heaps. Therefore, loss on account of cyclone and rain would be on an estimated basis, in fact that was what the Commissioner (Appeals) had found as a matter of fact that one estimate was substituted by another estimate. According to the Commissioner (Appeals) in the Circumstances, the assessee could not he visited with penalty merely because the assessee was not in a position to substantiate the claim in quantity. In the light of the said factual position, it was not p....
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....re was no valid ground to take a different view and since all points sought to be raised were inter-related in view of decision of main issue against revenue, other points did not need further elucidation- Held, yes- Whether, therefore, no substantial question of law arose from Tribunal's Tribunal's order-Held, yes" 9.4. Further Delhi High Court in the case of CIT Vs. Acro Traders Pvt. Ltd. deleted the penalty levied purely on estimate basis by observing as follows: "Where profit was estimated after rejection of books and in quantum appeal substantial relief was given by Commissioner (Appeals) and Tribunal, imposition of penalty for furnishing inaccurate particulars of income was not justified [In favour of assessee) Even in the case of the appellant company substantial relief has been granted by the Hon. ITAT and which has come to be accepted by the Hon. High Court also. Furthermore, the addition sustained is purely on estimate basis." 10. Respectfully following the above judicial precedents, we hereby delete the penalty levied u/s 271(1)(c) of the Act of Rs. 55,14,076/-. 11. In the result, the appeal filed by the Assessee is allowed. 12. ITA No. 620/Ahd/2023 for A....