M/s Pritesh Dhirajlal Shah, JAMNAGAR V. The Income Tax Officer, Ward-1(2), JAMNAGAR

ITA 312/RJT/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0130 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA N SHROTE
• Keywords: Unexplained investment; Salary income; Peak credit; Reasonable cause
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI S.S. GODARA, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] M/S. PRITESH DHIRAJLAL SHAH, OPP. SHREENAGAR APARTMENT, KHODIYAR COLONY, JAMNAGAR, PAN: ATSPS4845E (APPELLANT) VS THE ITO, WARD - 1(2), JAMNAGAR, (RESPONDENT) REVENUE BY : S MT. USHA N. SHROTE , SR. D . R. ASSESSEE BY: S H RI CHETAN AGARWAL , A.R. DATE OF HEARING : 03 - 10 - 2 016 DATE O F PRONOUNCEMENT : 24 - 10 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , AR ISES FROM ORDER OF THE CIT(A), JAMNAGAR DATED 31 - 03 - 2016 IN APPEAL NO. CIT(A) / JAM/145/14 - 15/1159 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TA X ACT, 1961; IN SHORT THE ACT . I T A NO . 312 / RJT /20 16 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. HON BLE CIT (A) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING PENALTY OF RS. 3,18,587/ - AS IMPOSED BY THE LD. AO U/S. 271(1)(C) OF THE ACT. 3 . THE FACTS OF THE CASE IN THIS CASE, THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11 ON 16 TH MARCH, 2012 DECLARING TOTAL SALARY INCOME OF RS. 1 , 99 , 930/ - . ON THE BASIS OF AIR INFORMATION , THE CASE WAS SELECTED FOR SCRUTINY TO EXAMINE THE SOUR CE OF CASH DEPOSITS IN SAVING BANK ACCOUNT WITH ICICI BANK, JAMNAGAR. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS OF R. 56 , 37 , 215/ - DURING THE FINANCIAL YEAR 2009 - 10 WITH ICICI BANK ACCOUNT. IN THIS CONNECTION, THE ASSESSEE HAS SUBMITTE D THAT HE WAS CARRYING OUT THE BUSINESS OF THE BRASS PARTS TO VARIOUS PARTIES IN ALL OVER INDIA. THE SALE PROCEED OF THE GOODS WERE CREDITED IN THIS ACCOUNT BY WAY OF CASH AND CHEQUES AND AMOUNT WAS WITHDRAWN OUT OF THIS ACCOUNT FOR PURCHASE OF BRASS PART S. IN THIS CONNECTION, THE EXPLANATION OF THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER IS REPRODUCED: - WITH REFERENCE TO THE ABOVE YEAR ASSESSMENT PROCEEDING I HAVE FURNISHED THE NECESSARY DETAILS AND EXPLANATION FROM TIME TO TIME EXCEPT MY SAVING S A/C NO. 020501520830 WITH ICICI BANK, JAMNAGAR. IN THIS CONNECTION, I HAVE TO STATE THAT MY TRUE AND FACT MATTER OF THE SAID A/C WHICH IS UNDER: (1) I HAVE CARRIED OUT THE BUSINESS OF THE BRASS PARTS TO VARIOUS PARTIES IN ALL OVER INDIA. THE SALES PROCE EDS OF THE GOODS ARE CREDITED (DEPOSIT) IN THIS ACCOUNT BY WAY OF CASH AND CHEQUE AND OUT OF THIS ACCOUNTS I HAVE WITHDRAWN CASH FOR URD PURCHASE OF BRASS PARTS. (2) THE XEROX COPY OF SAID ACCOUNT IS ENCLOSED HEREWITH ALONG WITH THE MONTH WISE SUMMERY OF THE SAID ACCOUNTS. I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 3 (3) YOU WILL FIND FROM THE SAID ACCOUNT THAT THE CREDIT SIDE OF THIS ACCOUNT IS CASH DEPOSIT AND CHEQUE DEPOSIT FROM VARIOUS LOCATION FROM ALL OVER INDIA. THIS CAN BE VERIFIED FROM SAID BANK STATEMENT WHERE THE STATION OF DEPOSIT IS ALS O MENTIONED. THIS DEPOSIT IS MADE BY THE VARIOUS PARTIES THROUGH CHANNELIZATION OF MY PAN CARD. (4)BEING A SALARIED PERSON, I DID NOT KNOW THE ACCOUNTING MATTER. THEREFORE NEITHER I HAVE MAINTAINED BOOKS OF ACCOUNT NOR KEPT ANY RECORD FOR ABOVE ACTIVITIES (5) DURING THE F. Y. 2009 - 10 IN MY SAID ACCOUNT THE TOTAL CASH RECEIPT IS RS. 6409170/ AND CHEQUE DEPOSIT RS.4129254/ - TOTAL OF BOTH COMES TO RS.10538424/ - . THE ABOVE DEPOSITS IN THIS ACCOUNT ARE MY TURNOVER RECEIPT & CASH WITHDRAWAL OF RS.10376134/ - OUT OF THIS A/C IS MY URD PURCHASE. (6) IN TRADING OF THE COMMERCIAL HARD WARE AND BRASS PARTS GENERALLY THE MARGIN OF PROFIT IS 3 TO 4%. THIS MARGIN IS ALSO SHOWN BY OTHER PARTIES IN SAME ACTIVITY WHICH IS SHOWN AS UNDER: NITINKUMAR N RAJPARA (PROP: YOGESHW AR BRASS INDUSTRIES) PARTICULARS 2006 - 2007 2007 - 2008 2008 - 2009 GROSS TURNOVER 4518365 6562278 9746946 GROSS PROFIT 356154 573788 812274 GROSS PROFIT RATIO 7.88 8.74 8.33 NET PROFIT 153088 189184 220658 NET PROFIT RATIO 3.39 2.88 2.26 AVERAGE RATE 2.84 DIPESH C HARIA (PROP: NIPTI PRODUCTS) I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 4 PARTICULARS 2006 - 2007 2007 - 2008 2008 - 200S GROSS TURNOVER 1714776 2759303 2082775 GROSS PROFIT 111880 736979 745747 GROSS PROFIT RATIO 6.52 6.34 6.97 NET PROFIT 58505 101322 110984 NET PROFIT RATIO 3.41 4.69 5.33 AVERAGE RATE 4.48 RASHIK R KAPURIA (PROP: COMPAQ BRASS INDUSTRIES) PARTICULARS 2006 - 2007 2007 - 2008 2008 - 2009 GROSS TURNOVER 234823 479750 1077932 GROSS PROFIT 41530 50787 98482 GROSS PROFIT RATIO 17.69 10.60 9.73 NET PROFIT 6204 10672 22762 NET PROFIT RATIO 2.64 2.23 2.25 AVERAGE RATE 2.37 BHAGWAN 0. KOTADIA (PROP: CLASSIC ENTERPRISE) PARTICULARS 2008 - 2007 2007 - 2008 2008 - 2009 I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 5 GROSS TURNOVER 7122012 4573662 7288672 GROSS PROFIT 496674 480197 735561 GROSS PROFIT RATIO 6.97 10.50 10.09 NET PROFIT 208212 183440 255213 NET PROFIT RATIO 2.92 4.01 3. 50 AVERAGE RATE 3.48 PRAVIN L. BUSA (PROP: JAY AMBE INDUSTRIES) PARTICULARS 2006 - 2007 2007 - 2008 2008 - 2009 GROSS TURNOVER 3764320 4927286 3390786 GROSS PROFIT 350110 476481 317419 GROSS PROFIT RATIO 9.30 9.67 9.36 | NET PROFIT 152606 1950 86 204022 NET PROFIT RATIO 4.05 3.96 6.02 AVERAGE RATE 4.68 (9) I HONESTLY STATE THAT THE ABOVE SAVING A/C IS MY TRADING TURNOVER ACCOUNT AND I EARNED 3 TO 4% OF THE PROFIT OUT OF THIS TURNOVER AND I GOT VERY TRA CE AND TENSE OF THE ABOVE MATTER AND TO OBTAIN PEACE OF MIND AND TO AVOID FURTHER LITIGATION AND WITH BUSINESS SCENARIO OF THE SAID BUSINESS ACTIVITIES AND ALSO - WITH THE RECENT HONORABLE I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 6 ITAT JUDGMENT I OFFER TO ADD MY INCOME 5% O/THE SALES OF SAID ACTIVI TIES WHICH COMES TO RS. 528345/ - ON THE DEPOSITS OF THE SAID ACCOUNTS RS.10566910/ - (10) I SYMPATHETICALLY DRAW YOUR KIND, ATTENTION FOR VARIOUS CASE LAWS IN WHICH HONORABLE CIT (APPEAL) AND HONORABLE TRIBUNAL HAS ACCEPTED THE ABOVE PROFIT MARGIN IN VARIOU S CASES WHERE URD PURCHASE AND UNACCOUNTED SALES HAS BEEN MADE. THE DECISIONS ARE AS UNDER: > M/S. BALKRISHNA DWARKADAS VS. ITO NO. 923/RJT/2010 DATED 01.01.2010, RAJKOT BENCH THE ADDITION OF UNACCOUNTED SALES FOUNDED DURING THE COURSE OF SURVEY BY SALES - TAX DEPARTMENT. IT AT RAJKOT BENCH HAS HELD THAT ENTIRE AMOUNT OF SALE CANNOT BE ADDED BUT ONLY PROFIT @ 5% OF UNACCOUNTED SALES CAN BE. ADDED AND HENCE BENCH HAS CONFIRM THE ADDITION OF PROFIT ON SALE RATHER THAT ENTIRE AMOUNT OF SALE. > SHRI RAKESH S. CHHAPARWAL (HUF) VS. ITO, ITA NO. 502 & 503/RJT/08 DATED 28.08.2009, RAJKOT BENCH LD. AO. HAD MADE AN ADDITION BY ESTIMATING PROFIT OF 5% ON SALE OF URD PURCHASE. CIT (A), JAMNAGAR HAS RESTRICTED THE SAID ADDITION TO 1.25%, WHICH WAS UPHELD BY HON. IT AT . > CIT V. BALCHAND AJIT KUMAR 2003 TAXPUB (DT) 1199 (MP - HC) : (2003) 263 ITR 0810 : (2004) 186 CTR 0419: (2004) 135 TAXMAN 0180 INCOME TAX - INCOME FROM UNDISCLOSED SOURCE ADDITION U/S 69 NON - REFLECTION OF CREDIT SALES CATCH NOTE: DURING THE SEARCH, IT WAS FOUND THAT THERE WERE THE CREDIT SALES WHICH WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSING OFFICER ON SCRUTINY OF THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE BEING DISSATISFIED REJECTED THE SAME AND ADDED TOTAL UNRECORDED SALES AS PROFIT FOR THE SALES PROFIT OF THE ASSESSEE. THE COMMISSIONER (APPEALS) CAME TO THE CONCLUSION THAT ENTIRE CREDIT SALES COULD NOT HAVE BEEN INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY FOLLOWED THE METHOD OF ADDING A NET PROFIT RAT E OF 5%, ON THESE SALES & ACCORDINGLY INCLUDED OR, THAT SCORE. THE I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 7 TOTAL UNRECORDED SALES CANNOT BE REGARDED AS THE PROFIT OF THE ASSESSEE. THE NET RATE HAS TO BE ADOPTED AND ONCE A NET PROFIT RATE IS ADOPTED, IT CANNOT BE SAID THAT THERE IS PERVERSITY OF APPROACH. RATIO: THE TOTAL UNRECORDED SALES CANNOT BE REGARDED AS THE PROFIT OF THE ASSESSEE. THE NET RATE HAS TO BE ADOPTED AND ONCE A NET PROFIT RATE IS ADOPTED, IT CANNOT BE SAID THAT THERE IS PERVERSITY OF APPROACH. HELD: THE TOTAL UNRECORDED SALES C ANNOT BE REGARDED AS THE PROFIT OF THE ASSESSEE. THE NET RATE HAS TO BE ADOPTED AND ONCE A NET PROFIT RATE IS ADOPTED, IT CANNOT BE SAID THAT THERE IS PERVERSITY OF APPROACH. WHETHER THE RATE IS LOW OR HIGH, IT WOULD DEPEND UPON THE FACTS OF EACH CASE. IN THE PRESENT CASE NET PROFIT RATE OF 5% HAS BEEN APPLIED. THE SAME DOES NOT REQUIRE TO BE ENHANCED. IN ANY CASE, IT CANNOT BE SAID THAT THERE IS PERVERSITY OF APPROACH. > LAXMI BUSINESS & CEMENT CO. (P) LTD. V. COMMISSIONER OF INCOME TAX 2011 TAXPUB (DT) 1 005 (CAL - HC): (2011) 057 DTR 0108 IN THE ABOVE SAVING A/C THERE IS NOT MY DEPOSIT OR INCOME U/S 69 OF THE INCOME TAX ACT. IT IS MY TURNOVER A/C AND SHOULD NOT BE CONSIDERED AS AN UNEXPLAINED INVESTMENT (11) IN THE RECENT HONORABLE TRIBUNAL JUDGEMENT OF I TATRAJKOT, BRANCH DATED 31 - 07 - 2012 IN CASE OF HARDIK KISHOR NAKHVANA IN WHICH IT IS SPECIFICALLY NARRATED THAT TRADE IN BUSINESS OF BRASS PARTS BY URD PURCHASE AND HAS MADE SALES TO DIFFERENT LOCATION IN INDIA. PROFIT @ 5% IS ACCEPTED BY THE TRIBUNAL. IN T HE SAID CASE HONORABLE CIT (APPEAL) JAMNAGAR ORDER DATED 22 - 02 - 2012 IN WHICH 5 % OF THE PROFIT IS ACCEPTED AND SAME IS CONFIRMED BY THE ITAT BRANCH, RAJKOT, COPY OF ORDERS ARE ENCLOSED HEREWITH. (12) I CAME WITH ABOVE FACT WITH TRUTH AND HONESTY, TO OBTA IN PEACE OF MIND AND TO AVOID FURTHER LITIGATION AND WITH HONESTY WHATEVER I EARNED OUT OF UNACCOUNTED SALES ACTIVITY I VOLUNTARILY OFFER 5% OF THE SAID ACTIVITY. I EARNESTLY REQUEST YOU SIR, PLEASE CONSIDER MY ABOVE FACT AND I ALSO PROMISE YOU THAT THE A BOVE 5% PROFIT AMOUNT WHICH IS ADDED TO MY INCOME ON THAT I WILL PAY NECESSARY TAXES ALONG WITH INTEREST. I ONCE AGAIN REQUEST I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 8 YOU SIR THE ABOVE ACCOUNT IS MY TRADING ACCOUNT AND NOT MY INVESTMENT ACCOUNT. ' 4 . THE ASSESSING OFFICER HAS NOT ACCEPTED THE 5% PROFIT OFFERED BY THE ASSESSEE WHICH COME TO RS. 5 , 28 , 347/ - ON THE REASONING THAT THE PEAK BALANCE AS PER BANKING STATEMENT AS ON 21 ST JAN, 2010 WAS RS. 8 , 06 , 681/ - . IN VIEW OF THIS, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 8 , 06 , 681/ - AS THE INCO ME OF THE ASSESSEE U/S. 69 OF THE ACT. AGAINST THE ORDER OF THE ASSESSING OFFICER, ASSESSEE HAS FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX(A) WHO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. THEREAFTER, THE ASSESSING OFFICER HAS INITI ATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. DURING THE COURSE OF PENALTY PROCEEDINGS , ASSESSEE HAS EXPLAINED THAT HE HIMSELF HAS FILED THE COPY OF BANK STATEMENT OF ICICI BANK AND ALSO VOLUNTARILY OFFER ED 5% OF THE TOTAL TURN - OVER D URING THE COURSE OF ASSESSMENT PROCEEDINGS TO OBTAIN MENTAL PEACE AND AVOID FURTHER LITIGATION AND STATED THAT IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN ANY CASE. THE REPLY OF THE ASSESSEE TO THE A SSESSING OFFICER IS REPRODUCED AS UNDER: - THE RETURN OF INCOME FOR A.Y. 2010 - 11 IS FILED ON DATE 16.3.2012 DECLARING THE TOTAL INCOME OF RS.1,99,930. HE ASSESSMENT WAS COMPLETED ON 23.1.2013 AND THE TOTAL ASSESSED INCOME CAME TO RS.10,06,611 AND THE DIFFE RENCE BETWEEN THE TOTAL ASSESSED INCOME AND TOTAL INCOME RETURNED IS RS.8,06,681 BEING ADDITION MADE U/S.69 OF THE 1,7. ACT, 1961. THE CASE OF THE ABOVE A.Y. IS SELECTED ON THE BASIS OF AIR. THE NOTICE IS ISSUED ON 31.8. 2012 AND THE QUESTIONNAIRE IS ALSO ISSUED ON THE SAID DATE. IN THE SAID NOTICE, THE QUESTION REGARDING SPECIFIC I NFORMATION OF THE BANK ACCOUNT IN WHICH THE CASH DEPOSITS ARE MADE IS NOT ASKED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HIMSELF HAS FILED A COPY OF, I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 9 THE - SAVI NGS BANK ACCOUNT OF ICICI BANK BEARING NO. 020501520830 IN WHICH THE ABOVE CASH DEPOSIT IS MADE. MOREOVER, THE LETTER DATED 7.11.2012 FILED ON 20.11.2012 BY THE ASSESSEE IN WHICH THE ASSESSEE HAS FULLY EXPLAINED THE MATTER AN D VOLUNTARILY OFFERED 5% OF TH E TOTAL TURNOVER OF RS. 1,05,6 6,910 (CASH DEPOSIT RS.64,09,170 AND CHEQUE DEPOSIT RS .41,29,254 BEING THE AMOUNT OF TURNOVER. AFTER RECEIVING THE BANK STATEMENT OF ICICI BY THE ASSESSEE, IT HAS BEE N SCRUTINIZED AND THE PEAK BALANCE OF RS.8,06,681 HAS BEEN FOUND OUT AND THE SAME WAS ADDED IN THE TOTAL INCOME \ OF, THE ASSESSEE AND THE TAX IS PAID AS PER DEMAND. YOU WILL, FIND FROM THE QUESTIONNAIRE DATED 31.8.2012 AS PER ITEM NO. (D) OF THE SAME, THE EXPLANATION ASKED FOR CASH DEPOSIT OF RS.56,37,215. IN FAC T, IN THE SAID ICICI BANK A CCOUNT, I HAVE TOTAL DEPOSIT OF RS. 1,05,66,910 AS EXPLAINED ABOVE. IT SEEMS THAT THE DEPARTMENT HAS NOT FOUND OUT ANY DETECTION BE FORE FILING OF THE ICICI B ANK STATEMENT BY THE ASSESSEE. IN - SUCH SITUATION, THE ASSESSEE HIMSEL F HAS FILED THE COPY OF BANK STATEMENT OF ICICI BANK AND ALSO VOLUNTARILY OFFERED 5% OF THE TOTAL TURNOVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO OBTAIN MENTAL PEACE AND AVOID FURTHER LITIGATION. LT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN MY CASE. WHEN THE ASSESSEE HAS N OT CONCEALED ANY INCOME OR FURNISHED ANY INACCURATE PARTICULARS OF INCOME, THE QUESTION OF PENALTY U/S.271(1)(C) DOES NOT ARISE. ' 5 . THE ASSESSING OFFI CER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND STATED THAT ASSESSEE HAS WILLINGLY AND KNOWINGLY AND WITHOUT REASONABLE CAUSE CONCEALED THE PARTICULARS OF HIS INCOME S TO EVADE PAYMENT OF TAX THEREON AND LEVIED PENALTY OF RS. 3 , 18 , 587/ - U/S. 271( 1) (C) OF THE ACT. THEREAFTER, THE ASSESSEE FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX(A) AGAINST THE ORDER U/S 271 (1)(C) OF THE ACT. PASSED BY THE ASSESSING OFFICER. THE LD. COMMISSIONER OF INCOME TAX(A) HAS UPHELD THE PENALTY ORDER OF THE ASSESSING OFFICER BY STATING AS UNDER: - 6. I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT AND ALSO GONE THROUGH THE PENALTY ORDER. I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 10 I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS RIGHTLY LEVIED PENALTY U/S. 271(1)(C) AS THIS IS A CLEA R - CUT CASE OF CONCEALMENT OF INCOME. THE INCOME ARISING OUT OF CONCEALED TRANSACTIONS HAS TO BE NECESSARILY CONCEALED ONE. HENCE, THE PENALTY IS CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 6 . BEFORE US, LEARNED COUNSEL HAS STATED THAT THE ASSESSI NG OFFICER HAS FINALIZED ASSESSMENT ON THE BASIS OF PEAK BALANCE OF THE STATEMENT ON ESTIMATED BASIS WITHOUT ANY CONCRETE FINDING ANY INQUIRY. THE LEARNED COUNSEL S TATED THAT THE QUANTUM ADDITION CONFIRMED IN THIS CASE BY THE LD. COMMISSIONER OF INCOME TAX(A) HAS BEEN REDUCED TO THE 5% OF THE PROFIT BY THE HON 'BLE ITAT VIDE ORDER DATED 11.08.2016 STATING THAT ONLY LOGICAL CONCLUSION DRAWN IN THIS CASE IS THE ASTIMATION OF PROFIT. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF LD. COMMIS SIONER OF INCOME TAX(A). 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE FIND THAT IN THIS CASE THE ASSESSING OFFICER HAS LEVIED PENALTY ON THE ADDITION MADE BY THE AO ON THE BASIS OF ESTIMATION OF PEAK BALANCE . WE FIND THAT THE ASSESSEE HIMSELF H AS FILED COPY OF BANK STATEMENT AND VOLUNTARILY OFFERED 5% OF THE TURNOVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO OBTAIN MENTAL PEACE AND AVOID FURTHER LITIGATION. WE NOTICED THAT HON BLE ITAT HAS ESTIMA T ED THE ADD ITION TO THE 5% OF NET PROFIT STATING THAT ONCE THE DEPOSITS HAVE BEEN ACCEPTED AS RECEIPTS FROM THE SALE OF BRASS PARTS, THE ONLY LOGICAL CONCLUSION WHICH CAN BE DRAWN IS THAT OF ESTIMATION OF PROFIT. AFTER CONSIDERING THE ABOVE STATED FACTS AND FINDINGS WE FIND THAT IT WAS MERELY A QUESTION OF ESTIMATION AND THE ADDITION WAS MADE BY ESTIMATING THE NET PROFIT RATE @ 5%., IT HAS NOT BEEN PROVED THAT THE ASSESSEE I.T.A NO. 312/RJT/2016 A.Y. 2010 - 11 PAGE NO M/S. PRITESH DHIRAJLAL SHAH VS. ITO 11 FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED THE INCOME. IN VIEW OF THE ABOVE ST ATED FACTS AND FINDINGS WE CONSIDERED THAT LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE PENALTY ORDER OF THE ASSESSING OFFICER, THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 24 - 10 - 201 6 SD/ - SD/ - ( S. S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 24 /10 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, IT AT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT