No Section 271(1)(c) Penalty for Income Estimation: ITAT Ahmedabad

Maruti Infrastructure Ltd. Vs DCIT (ITAT Ahmedabad) Income Tax Appellate Tribunal (ITAT) Ahmedabad ruled that penalty under Section 271(1)(c) of the Income Tax Act cannot be levied when income addition is based on estimation. The case involved Maruti Infrastructure Ltd., a real estate development company, for the assessment year 2013-14. The dispute arose when the Assessing Officer (AO) disallowed subcontract payments, treating 40% of them as non-genuine and estimating them as bogus expenses. The CIT(A) reduced the disallowance to 7% of the profit, which was further upheld by the ITAT. However...