Asstt. Commissioner of Income Tax-I, Kanpur V. Smt. Kavita Kanodia, Kanpur

ITA 361/LKW/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7992 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Difference of opinion; Onus to prove
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.361/LKW/2014 ASSESSMENT YEAR:2007-08 ASSTT. CIT-1 KANPUR V. SMT. KAVITA KANODIA 26/21, BIRHANA ROAD KANPUR TAN/PAN:AGOPK6184 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE DATE OF HEARING: 28 11 2014 DATE OF PRONOUNCEMENT: 16 12 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.3.80 LAKHS LEVIED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') IGNORING THE FACT THAT THE ADDITION WAS MADE AFTER DETAILED DISCUSSION BY THE ASSESSING OFFICER. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSING OFFICER HAS INITIALLY MADE ADDITION OF RS.79,94,642/- ON ACCOUNT OF UNEXPLAINED RECEIPT AGAINST BOGUS PURCHASES. THE LD. CIT(A) RE-EXAMINED THIS ISSUE AND RESTRICTED THE ADDITION TO RS.10 LAKHS. ON THIS RESTRICTED ADDITION, THE ASSESSING OFFICER HAS LEVIED A PENALTY OF RS.3.80 LAKHS UNDER SECTION 271(1)(C) OF THE ACT, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE :- 2 -: LD. CIT(A), WITH THE SUBMISSION THAT THE ADDITION WAS RESTRICTED ON ESTIMATE BASIS AFTER CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNT MADE BY THE ASSESSING OFFICER. HE HAS FILED WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) WHICH IS EXTRACTED IN PARA 4 OF THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) RE-EXAMINED THE CONTENTIONS OF THE ASSESSEE IN THE LIGHT OF THE FACT THAT ADDITION WAS RESTRICTED ON ESTIMATE BASIS, BESIDES CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNT AND WAS OF THE VIEW THAT NO POSITIVE ACT OF CONCEALMENT ON THE PART OF THE ASSESSEE HAS BEEN BROUGHT ON RECORD AND THEREFORE THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF LAW. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER:- 5.1 I HAVE CONSIDERED THE ARGUMENTS TAKEN BY THE LD. AR IN THE ABOVE WRITTEN SUBMISSION AND ALSO CONSIDERED THE DISCUSSION MADE BY THE AO IN THE IMPUGNED PENALTY ORDER AS REPRODUCED IN BRIEF IN PARA NO. 3 OF THIS ORDER. THE LD. AR HAS POINTED OUT THAT THE ADDITION OF RS.10,00,000/- ON THE BASIS OF WHICH, THE PENALTY U/S 271(1)(C) HAS BEEN LEVIED BY THE AO, AS MADE BY THE LD. CIT(A)-II, KANPUR IS IN FACT AN ESTIMATED ADDITION, WHICH IS NOT BASED ON ANY FACTUAL FINDING OF CONCEALMENT BY THE APPELLANT BUT RATHER DUE TO THE FACT THAT IN THE OPINION OF THE LD. CIT(A)-II, KANPUR, THE BOOKS OF ACCOUNT, ARE NOT PROPERLY MAINTAINED AND ARE NOT FIT FOR WORKING OUT THE TRUE AND CORRECT PROFIT OF THE APPELLANT FROM THE BUSINESS ACTIVITY UNDERTAKEN BY HER. AS REGARDS TO THIS FINDING OF THE LD. CIT(A)-II, KANPUR, IT HAS BEEN POINTED OUT THAT THE BOOKS OF ACCOUNT OF THE APPELLANT WERE DULY AUDITED BY A CHARTERED ACCOUNTANT (WITHOUT ANY ADVERSE REMARKS) AND ALSO ACCEPTED BY THE SALES TAX AUTHORITIES. IT HAS ALSO BEEN POINTED OUT BY THE LD. AR DURING THE HEARING OF APPEAL BY REFERRING TO THE ORDER OF THE LD, CIT(A)-II, KANPUR A. NO. CIT(A)-II/508/DCIT-1/09-10/273 DATED 19.03.2010 THAT EVEN CIT(A)-II, KANPUR HAS NOT AGREED WITH THE FINDING OF THE AO THAT THE PURCHASES SHOWN BY THE ASSESSEE FROM THE SISTER CONCERN IS :- 3 -: BOGUS BECAUSE IN THIS ORDER, IN PARA NO. 7.1, HE HAS OBSERVED THAT INCONSISTENCIES OBSERVED BY THE AO ARE RELEVANT BUT NOT ADEQUATE TO TOTALLY DISREGARD THE ENTIRE PURCHASES AND HE HAS HELD THAT THE CASE OF ASSESSEE IS FIT TO REJECT THE BOOKS OF ACCOUNT AND ESTIMATE 'THE G.P.. THEREFORE, THE LD. AR HAS ARGUED THAT AFTER EXAMINATION OF THE CASE OF THE ASSESSEE DURING APPEAL PROCEEDING, THE CIT(A) HAS NOT FOUND THE PURCHASES SHOWN BY THE ASSESSEE AS BOGUS PURCHASES AND AS PER HIM, THE INCOME OF THE ASSESSEE SHOULD BE ESTIMATED BY ENHANCING THE SALE SHOWN BY THE ASSESSEE. THEREFORE, THERE IS A DIFFERENCE OF OPINION IN THE FINDINGS OF THE AO AND THE CIT(A) ABOUT THE ENHANCEMENT MADE IN THE INCOME OF THE ASSESSEE WHICH IN FACT HAS BEEN SUBSTANTIALLY REDUCED BY THE CIT(A). THEREFORE, THE LD. AR HAS FURTHER ARGUED THAT FOR ANY ADDITION SUSTAINED BY THE CIT(A) JUST ON ESTIMATE BASIS AND THERE BEING A DIFFERENCE OF OPINION BETWEEN THE FINDING OF THE AO AND THE CIT(A), IT CANNOT BE SAID THAT SHE HAS EITHER CONCEALED THE PARTICULAR OF INCOME OR FILED THE INACCURATE PARTICULARS OF INCOME. AS I HAVE ALREADY DISCUSSED IN PARA NO. 3 OF THIS ORDER THAT THE AO HAS GIVEN A DETAILED FINDING FOR HOLDING PURCHASES OF RS.79,94,642/- FROM M/S S.S. POLIFILL (P) LTD. AS BOGUS PURCHASES AND EVEN WHILE LEVYING THE PENALTY, HE HAS MENTIONED THAT THE ASSESSEE IS HELD TO BE GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF HER INCOME BY SHOWING BOGUS PURCHASES AND HE FURTHER MENTIONED THAT CONCEALED INCOME FOR THE PURPOSE OF IMPOSITION OF PENALTY IS DETERMINED TO RS.10,00,000/- AS UPHELD BY THE CIT(A)-II, KANPUR. NOW, BEFORE ADJUDICATING UPON THE VALIDITY OF PENALTY U/S 271(1)(C) IMPOSED UPON THE ASSESSE , THE ISSUE TO BE DECIDED IS WHETHER CIT(A) HAS UPHELD THE PURCHASES TO THE EXTENT OF RS.10,00,000/- AS BOGUS OR HE HAS UPHELD THE ADDITION ON ACCOUNT OF HIS FINDING OF CONSIDERING THE BOOKS OF ACCOUNT AS NOT CORRECT AND ENHANCING THE SALE ON ESTIMATE BASIS AS ARGUED BY THE LD. AR. IN ORDER TO FIND OUT WHETHER, THERE IS ANY DIFFERENCE OF OPINION BETWEEN THE FINDING OF THE CIT(A) AND THE AO AS REGARDS TO THE ADDITION OF RS.79,94,642/- WHICH WAS RESTRICTED TO RS.10,00,000/- IN :- 4 -: APPELLATE ORDER, I HAVE CAREFULLY PERUSED THE APPELLATE ORDER DATED 19.03.2010 PASSED BY THE LD. CIT(A)-II, KANPUR. AFTER GOING THROUGH THIS APPELLATE ORDER, I FOUND THAT THE CIT(A) HAS NOT AGREED WITH THE AO FOR HOLDING THE ENTIRE PURCHASE OF RS.79,94,642/- AS BOGUS PURCHASES AND THEREFORE, AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE (APPELLANT), HE ESTIMATED SALES AT RS.7,27,00,639/- INSTEAD OF REPORTED SALE OF RS.7,17,00,639/- AND THEREFORE, CONFIRMED THE ADDITION TO THE EXTENT OF RS.10,00,000/- TAKING THE DIFFERENCE BETWEEN THE ESTIMATED SALES AND THE DECLARED SALES. FOR A READY REFERENCE, THE DECISION OF THE CIT(A)-II, KANPUR IN THIS REGARD AS GIVEN IN PARA NO. 7.2 OF THE SAID ORDER IS REPRODUCED AS UNDER:- '7.2 UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT DO NOT REFLECT TRUE AND CORRECT PICTURE OF THE AFFAIRS AND THEREFORE, THE CORRECT PROFIT CANNOT BE DEDUCED. ACCORDINGLY, I REJECT THE BOOKS OF ACCOUNTS OF THE APPELLANT AND I ESTIMATE SALES AT RS.7,27,00,639/- INSTEAD OF REPORTED SALES OF RS.7,17,00,639/- (ON ACCOUNT OF MISMATCH AND UNDER INVOICING BOTH IN TERMS OF QUANTITY AND VALUE). ACCORDINGLY, THE GROSS PROFIT WOULD INCREASE BY RS.10 LAKH WHICH WOULD BE THE QUANTUM OF ADDITION SUSTAINED AS AGAINST RS.79,94,642/- MADE BY THE AO. THIS ADDITION COMES TO JUST ABOUT 1.3% INCREASE IN THE G.P. RATE AS COMPARED TO WHAT THE APPELLANT HAS DECLARED IN ITS BOOKS.' 5.2 LOOKING TO THE ABOVE DECISION OF THE CIT(A), IT IS VERY MUCH CLEAR THAT THE ADDITION OF RS.10,00,000/- IS ALTOGETHER ON A DIFFERENT FOOTING RATHER THAN BEING ON ACCOUNT OF THE PURCHASES SHOWN BY THE ASSESSEE AS BOGUS AS HELD BY THE AO IN THE ASSESSMENT ORDER AND ALSO RELIED UPON BY HIM IN THE PENALTY ORDER BY ARGUING THAT THE AO HAS FOUND THE PURCHASES SHOWN BY THE ASSESSEE AS BOGUS PURCHASES ON COLLECTION OF EVIDENCES FROM RTO AND ALSO MAKING DETAILED DISCUSSION IN THE ASSESSMENT ORDER AND THEREFORE, JUSTIFYING THE LEVY OF PENALTY U/S 271(1)(C) BY HOLDING THE ASSESSEE GUILTY OF :- 5 -: FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME BY SHOWING BOGUS PURCHASES WHICH IN FACT, HAS NOT BEEN FOUND BY-THE CIT(A) AS CORRECT IN HIS APPELLATE ORDER AND THEREFORE, HE MADE ADDITION OF RS.10,00,000/- BY ENHANCING THE SALE OF THE ASSESSEE BY REJECTING THE BOOKS OF ACCOUNT AND SUCH FINDING OF THE CIT(A) CLEARLY SHOWS THAT HE HAS ACCEPTED THE PURCHASES SHOWN BY THE ASSESSEE. THEREFORE, THE BASIS OF LEVYING OF PENALTY BY THE AO HAS ITSELF NOT BEEN FOUND SUSTAINABLE. THE SIMILAR SITUATION EMERGED BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF HARIGOPAL SINGH VS. COMMISSIONER OF INCOME TAX REPORTED IN (2002) 125 TAXMAN 242, WHEREIN THE ESTIMATED ADDITION MADE BY THE AO WAS CONSIDERABLY REDUCED BY THE HON'BLE TRIBUNAL AND HENCE, IT HAS BEEN HELD BY THE HON'BLE HIGH COURT THAT IN SUCH CASES, PROVISIONS OF SECTION 271 (1 )(C) ARE NOT ATTRACTED. IN THIS CASE, ASSESSEE WAS A SWEET SELLER AND HE WAS NOT MAINTAINING ANY ACCOUNTS AND THEREFORE, HE DECLARED HIS INCOME ON ESTIMATE BASIS. THE ASSESSING OFFICER, HOWEVER, ASSESSED THE INCOME AT A HIGHER FIGURE BY ESTIMATING THE ASSESSEE'S SALE AND GROSS PROFIT. THE APPEAL WAS DISMISSED BY THE COMMISSIONER (APPEALS). ON FURTHER APPEAL, THE TRIBUNAL OBSERVED THAT THE ESTIMATE MADE BY THE ASSESSING OFFICER WAS HIGHLY EXCESSIVE AND, THEREFORE, REDUCED THE ADDITION. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AGAINST THE ASSESSEE BY INVOKING SECTION 271(1)(C) ALONG WITH EXPLANATION 1(B), AND FOUND THAT SINCE THE ASSESSEE HAD NOT FILED ANY FRESH EVIDENCE IN PENALTY PROCEEDINGS TO PROVE THAT THERE WAS NO ATTEMPT ON HIS PART TO CONCEAL HIS INCOME, HE IMPOSED A PENALTY. ON APPEAL, THE COMMISSIONER-(APPEALS) DELETED THE PENALTY. HOWEVER, THE TRIBUNAL CONFIRMED THE PENALTY. ON APPEAL BEFORE THE HON'BLE HIGH COURT, IT HAS BEEN HELD AS UNDER:- 'IN ORDER TO ATTRACT CLAUSE (C) OF SECT/ON 271(1), IT IS NECESSARY THAT THERE MUST BE CONCEALMENT BY THE ASSESSEE OF THE PARTICULARS OF HIS INCOME OR IF HE FURNISHES INACCURATE PARTICULARS OF SUCH INCOME. IN THE INSTANT CASE, THE TRIBUNAL :- 6 -: AGREED THAT THE INCOME OF THE ASSESSEE HAD TO BE ASSESSED ON AN ESTIMATE OF THE TURNOVER BUT WAS OF THE VIEW THAT THE ESTIMATE AS MADE BY THE ASSESSING OFFICER WAS HIGHLY EXCESSIVE AND IT FIXED THE TOTAL INCOME OF THE ASSESSEE AT A LOWER FIGURE. IT WAS, THUS, CLEAR THAT THERE WAS A DIFFERENCE OF OPINION AS REGARDS THE ESTIMATE OF THE INCOME OF THE ASSESSEE. SINCE THE ASSESSING OFFICER AND THE TRIBUNAL ADOPTED DIFFERENT ESTIMATES IN ASSESSING THE INCOME OF THE ASSESSEE, IT COULD NOT BE SAID THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME SO AS TO ATTRACT CLAUSE (C) OF SECTION 271(1). THERE WAS NOT EVEN AN IOTA OF EVIDENCE ON THE RECORD TO SHOW THAT THE INCOME OF THE ASSESSEE DURING THE YEAR UNDER APPEAL WAS MORE THAN THE INCOME RETURNED BY HIM. ADDITIONS IN HIS INCOME WERE MADE, ON ESTIMATE BASIS AND THAT BY ITSELF DID NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE EITHER CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THERE HAD TO BE A POSITIVE ACT OF CONCEALMENT ON HIS PART AND THE ONUS TO PROVE THAT WAS ON THE DEPARTMENT. FURTHER, THE TRIBUNAL GROSSLY ERRED IN LAW IN RELYING ON EXPLANATION 1(B) TO SECTION 271(1 )(C) TO RAISE A PRESUMPTION AGAINST THE ASSESSEE. THE ASSESSEE HAD JUSTIFIED HIS ESTIMATE OF INCOME ON THE BASIS OF HOUSEHOLD EXPENDITURE AND OTHER INVESTMENTS MADE DURING THE RELEVANT PERIOD. IT WAS NOT THE CASE OF THE REVENUE THAT HE HAD IN FACT INCURRED EXPENDITURE IN EXCESS OF WHAT HE HAD STATED. THEREFORE, IT COULD NOT BE SAID THAT THE EXPLANATION FURNISHED BY THE ASSESSEE HAD NOT BEEN SUBSTANTIATED OR THAT HE HAD FAILED TO PROVE THAT SUCH EXPLANATION WAS NOT BONA FIDE. IN THE RESULT, THE APPEAL WAS ALLOWED.' EVEN THE HON'BLE JURISDICTIONAL ALLAHABAD HIGH COURT IN CASE OF NARESH CHAND AGARWAL VS. COMMISSIONER OF INCOME TAX-1 LUCKNOW REPORTED IN (2013) 38 TAXMAN.COM 397 AND IN CASE OF COMMISSIONER OF INCOME TAX-11 LUCKNOW VS. NORTON ELECTRONICS SYSTEMS (P) LTD. REPORTED IN (2014) 41 TAXMAN.COM 280, HAS HELD THAT WHERE ADDITION TO ASSESSEE'S INCOME IS MADE ON ESTIMATE :- 7 -: BASIS, PENALTY U/S 271(1)(C) CANNOT BE IMPOSED. THE LD. AR HAS ALSO REFERRED VARIOUS DECISIONS IN HIS WRITTEN SUBMISSION IN WHICH, IT HAS BEEN HELD THAT IN ABSENCE OF ANY MATERIAL OR EVIDENCE, MERELY ESTIMATION OF INCOME DOES NOT ATTRACT PENAL PROVISIONS. HE HAS GIVEN THE DETAILS OF THE DECISION OF HON'BIE CHATTISGARH HIGH COURT IN THE CASE OF CIT VS. VIJAY KUMAR JAIN (SUPRA) IN WHICH, IT HAS BEEN HELD THAT NO PENALTY CAN BE LEVIED IN THE CASE OF ESTIMATING THE RATE OF PROFIT AND MORE PARTICULARLY IN A CASE WHERE THE AO HAS MADE ADDITION BY APPLYING 10% OF NET PROFIT RATE THAT WAS SUBSEQUENTLY REDUCED BY THE TRIBUNAL TO 6%. 5.3 IN THE PRESENT CASE, THE AO HAS MADE ADDITION ALTOGETHER ON A DIFFERENT PREMISES HOLDING THAT THE ENTIRE PURCHASE OF RS.79,94,642/- SHOWN BY THE ASSESSEE FROM HER SISTER CONCERN ARE BOGUS PURCHASES BUT THE CIT(A) HAS CONFIRMED THE ADDITION IN QUANTUM ONLY UP TO RS. 10,00,000/- TAKING A DIFFERENT BASIS BY ESTIMATING THE SALE IN EXCESS OF RS.10,00,000/- AS COMPARED TO THE AMOUNT SHOWN BY THE ASSESSEE IN THE RETURN AND SUCH ESTIMATION OF SALE WAS MADE AFTER REJECTING BOOKS OF ACCOUNT WHILE THE AO IN THE ASSESSMENT ORDER DID NOT RECORD ANY FINDING THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE(APPELLANT) WERE INCORRECT AND LIABLE TO BE REJECTED U/S 145(3). SUCH DIFFERENCE OF OPINION BETWEEN TWO AUTHORITIES ITSELF SHOWS THAT THERE IS NO POSITIVE FINDING ABOUT EITHER CONCEALMENT OF PARTICULAR OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE EITHER FOR THE PURCHASES SHOWN BY HER OR SALE SHOWN BY HER IN THE RETURN OF INCOME. THE HON'BIE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HARIGOPAL SINGH VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD THAT THERE HAD TO BE A POSITIVE ACT OF CONCEALMENT ON THE PART OF THE ASSESSEE AND THE ONUS TO PROVE THAT WAS ON THE DEPARTMENT, HOWEVER, IN THE INSTANT CASE UNDER APPEAL, NO SUCH POSITIVE ACT OF CONCEALMENT ON THE PART OF THE ASSESSEE HAS BEEN BROUGHT ON THE RECORD AND THE ADDITION SUSTAINED IS ONLY ON ESTIMATED BASIS. THEREFORE, ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AS EXAMINED BY ME IN THIS ORDER SO FAR DISCUSSED ABOVE, IT IS VERY CLEAR :- 8 -: THAT THE BASIS FOR LEVYING OF PENALTY BY THE AO U/S 271(1)(C) THAT THE ASSESSEE IS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF HER INCOME BY SHOWING BOGUS PURCHASES IS NOT FOUND TO BE CORRECT AFTER THE ASSESSMENT ORDER PASSED IN THIS REGARD, HAS BEEN ADJUDICATED UPON BY THE LD. CITCA)-II KAN.PUR AND HENCE, NO PENALTY U/S 271(1)(C) CAN BE LEVIED FOR THE ADDITION OF RS.10,00,000/- SUSTAINED BY THE CIT(A) ON A ESTIMATE BASIS GIVING A FINDING DIFFERENT THAN WHAT WAS DISCUSSED IN THE ASSESSMENT ORDER AS AGAINST THE TOTAL ADDITION OF RS.1,24,83,428/- MADE BY THE AO IN THE ASSESSMENT ORDER CONSISTING OF BOGUS PURCHASES OF RS.79,94,642/-, UNEXPLAINED CASH CREDIT OF RS.15,00,000/- U/S 68 AND DISALLOWANCE OF RS.29,88,786/- U/S 40A(3.( THE LAST TWO ADDITIONS ARE COMPLETELY DELETED AND FIRST ADDITION IS ONLY SUSTAINED IN QUANTUM UP TO RS. 10,00,000!- BUT ON DIFFERENT BASIS AND THAT TOO BY MAKING ONLY AN ESTIMATION). THEREFORE, I DELETE THE PENALTY OF RS.3,80,000/- IMPOSED BY THE AO U/S 271(1)(C) VIDE ORDER DATED 24.03.2011 AND ACCORDINGLY, ALL THE FIVE GROUNDS TAKEN IN APPEAL CHALLENGING THIS PENALTY ARE ALLOWED. 3. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER; WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS ADDITION WAS RESTRICTED ON ESTIMATE BASIS AFTER CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNT AND FOR THE ESTIMATED ADDITION, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE, AS IT IS A QUASI CRIMINAL PROCEEDINGS AND UNLESS AND UNTIL POSITIVE ACT OF CONCEALMENT ON THE PART OF THE ASSESSEE IS BROUGHT OUT, PENALTY CANNOT BE LEVIED ON THE ESTIMATED ADDITION. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE INITIALLY REJECTED AND THE ASSESSING OFFICER HAS MADE THE ADDITIONS UNDER DIFFERENT HEADS AND IN APPEAL, THE LD. CIT(A) HAS DELETED THE ADDITIONS MADE UNDER THE HEAD UNEXPLAINED CASH CREDIT AND :- 9 -: UNDER SECTION 40A(3) OF THE ACT ON ACCOUNT OF CASH PAYMENT. UNDER THE HEAD UNEXPLAINED RECEIPT AGAINST BOGUS PURCHASES, THE ADDITION WAS MADE TO THE EXTENT OF RS.79,94,642/- BY THE ASSESSING OFFICER, BUT IN APPEAL THE LD. CIT(A) HAS RESTRICTED IT TO RS.10 LAKHS ONLY ON ESTIMATE BASIS. THEREFORE, NO POSITIVE ACT OF CONCEALMENT OF INCOME CHARGEABLE TO TAX HAS BEEN BROUGHT OUT ON RECORD. SINCE THE ADDITION WAS MADE ON ESTIMATE BASIS, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. WE HAVE ALSO CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A) AND WE FIND THAT THE LD. CIT(A) HAS ADJUDICATED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS, IN WHICH IT HAS BEEN CATEGORICALLY HELD THAT PENALTY CANNOT BE LEVIED ON ESTIMATED ADDITION. THEREFORE, WE FIND NO MERIT IN THE REVENUES APPEAL AND ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH DECEMBER, 2014 JJ:1012 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR