No Penalty- When deeming provisions are applied for assessing income

CA Prarthana Jalan Hon’ble Allahabad High Court has in the case of Hariom Steels Pvt Ltd has held that penalty cannot be levied when deeming provisions are applied for assessing income. Certain scrap was sold by Hariom Steels Pvt Ltd to parties not covered under Section 40A (2)(b) of the Act @ Rs. 17,340/- per metric tone whereas it was sold @ Rs. 5000/- per metric ton to parties covered under Section 40A (2)(b) of the Act. The value of the difference of the scrap sold was added to the income of the assessee and accordingly, penalty of Rs. 46,25,000/- was imposed under Section 271 (1)(c...