Agreed estimated additions do not call for levy of penalty

S. Manoharan Vs DCIT (ITAT Chennai)

From the factual matrix, it could be seen that the loose sheet which has led to the addition in the hands of the assessee pertain to period from 07.04.2016 to 14.04.2019 only and there is no document evidencing receipt of rental payment by the assessee for this year. There is no finding by Ld. AO that the amount was actually received by the assessee from any party. These are merely agreed estimated additions. Accordingly, no case of concealment or furnishing of inaccurate particulars of income could be made out against the assessee. We are of the considered opinion that estimated additions do not call for levy of penalty. Therefore, by deleting the impugned penalties for all the years, we allow the appeals of the assessee.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

1. Aforesaid appeals by assessee for Assessment Years (AYs) 2014-15, 2015-16 & 2016-17 arises out of the common order passed by learned Commissioner of Income Tax (Appeals)-19, Chennai [CIT(A)] dated 11-07-2022 in the matter of penalty levied by Ld. AO u/s 271(1)(c) vide separate orders. The penalty arises out of common facts. The assessment for all the years has been framed by Ld. Assessing Officer [AO] u/s.153C r.w.s 143(3).

2. The Ld. AR advanced arguments to submit that penalty could not be levied on estimated additions of rental income. The Ld. CIT-DR controverted the same and submitted that the additions are admitted additions which are based on seized documents which indicated receipt of rental income by the assessee. Having heard rival submissions, our adjudication would be as under.

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