The assessee, engaged in operating a photo studio, had filed return for AY 2011\u201312. In reassessment, the AO, relying on Sales Tax Department information, treated purchases from alleged hawala parties as non-genuine, rejected books u\/s 145(3), and estimated profit at 12.5% \u00a0with further addition of 1% \u00a0towards commission, though assessee had produced purchase invoices, challans, bank statements and stock records. Penalty \u00a0u\/s 271(1)(c) was levied for concealment. CIT(A) deleted the penalty holding that the addition was based on ad-hoc estimation and not on conclusive evidence of concealment, which was affirmed by the Tribunal. Dismissing Revenue\u2019s appeal, the High Court held that penalty cannot be levied where income is determined only on estimation. The AO had accepted sales and only estimated profit element; penalty proceedings are distinct from assessment and in absence of cogent evidence of concealment, levy of penalty is unwarranted.( ITA No. 48 of 2022; dt. 16\/09\/2025) ( \u00a0A.Y. 2011\u201312)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 271(1)(c) : Penalty \u2013 Bogus purchases \u2013 Addition on estimation \u2013Rejection of books oaf account – Penalty not leviable.[ S. 145(3) ,147, 148 , 260A ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-56564","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-eIk","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/56564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=56564"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/56564\/revisions"}],"predecessor-version":[{"id":56565,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/56564\/revisions\/56565"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=56564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=56564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=56564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}