2025 (7) TMI 1855

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....hree appeals is with regard to sustenance of penalty u/s. 271(1)(c) of the Act of Rs. 8,83,495/- for A.Y.2014-2015 Rs. 9,95,004/- for A.Y.2015-2016 and Rs. 1,95,247/- for A.Y.2016-2017, respectively. 3. Facts emanate from the assessment order framed for A.Y.2014- 20165 are taken to be considered for deciding all the three appeals. A search and seizure operation u/s. 132(1) of the Act and survey operations u/s. 133A of the Act were carried out in the case of Kanodia Group on 26.10.2015, which is engaged in the real estate construction and trading in Bihar and Jharkhand. This group is also engaged in lubricants dealership and contractor business. M/s Shree Mangalam Aluminium relates to Kanodia group of cases. Notice u/s 153C of the Act was....

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....e assessment years i.e. AYs 2014-15, 2015-16 and 2016-17 and raised the following issues:- (1) For that the Ld. CIT(A) has erred in affirming penalty u/s 271(1)(c) on the difference between income assessed and relief allowed by Ld. CIT(A) by treating the same to be concealed income. (2) For that the Ld. CIT(A) has erred in mechanically and without due application of mind has affirmed the order of the Assessing Officer imposing penalty of Rs. 8.83,495/-. (3) For that the Ld. CIT(A) has erred in invoking provisions of Section 106 of the Evidence Act whereas the fact remains that the fiscal law is guided by pre-ponderance of probability and the provisions of Evidence Act are strictly not applicable.. (4) For....

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.... no documentary evidence/material indicating any unaccounted purchase and/or unexplained investment was found or seized, therefore, the foundation of penalty is purely on estimation basis. The ld. CIT(Appeals) passed his orders merely by relying on Explanation 5A and without considering the ratios laid down by various judicial forums. Ld. counsel also relied on the decision of the Hon'ble High Court of Allahabad in the case of Ashok Kumar Rastogi -vs.- CIT reported in (1991) 55 Taxmann 433 and also relied on the decision of Coordinate Bench of Mumbai in the case of Mun Gems -vs.- Asstt. Commissioner of Income Tax reported in (2023) 155 taxmann.com 1 (Mumbai - Trib.). He also relied on the decision of the Hon'ble High Court of Delhi in the c....

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....ulars of income was justified or not? In this aspect, as per the ratio laid down by the Hon'ble High Court of Delhi (supra), Hon'ble Delhi High Court has categorically held that "estimated rate of profit applied on the turnover of the assessee, which in our view does not amount to concealment or furnishing of inaccurate particulars. In our view, ld. CIT(Appeals) has taken a right decision in deleting the penalty, which is upheld, which was confirmed by the ITAT. The finding arrived at by the Tribunal does not warrant interference from this Court". 8. The assessee also relied on the decision of the Coordinate Bench of Mumbai Tribunal cited supra, wherein it was held that "merely because some adhoc gross profit rate has been applied on suc....