Penalty cannot be imposed on the basis of estimation of net profit

Last updated: 06 March 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Vide a penalty order u/s 271(1)(c) dated 27-03-2009, it was held that the assessee has concealed the income of Rs.8,16,617/- which was taxed on account of estimation of profit. The First Appellate Authority has expressed that since the addition was in respect of Gross Profit and work-inprogress was based upon certain estimation, therefore, it was not a case of concealment, hence, deleted the penalty following the judgment of Hon’ble jurisdictional High Court in the case of CIT v. J.H. Parabia (Transport) P. Ltd. (2006) 284 ITR 361 (Guj). Now, the Revenue is before us.

Citation :
Dy. Commissioner of Income-tax, Circle-1,Room No.108, Aayakar Bhavan, Majura Gate, Surat Appellant V/s. M/s Krishna Art Silk Cloth Pvt. Ltd., 261/A,GIDC, Pandesara, Surat PAN No.AABCK1458N Respondent