Section 271(1)(c) penalty cannot be levied on Income Tax Additions on Ad-Hoc Basis

Vinod Oberoi Vs ITO (ITAT Delhi) Penalty under section 271(1)(c ) of the Act is not leviable since the addition made by the Assessing Officer is on account of ad-hoc estimation of net profit @ 8% on the un-reconciled turnover as per books and as per Form 26AS and the addition is only of Rs.98,863/-. Additions made on ad-hoc basis on estimation does not attract penalty under section 271(1)(c) of the Act as there is no conclusive proof of concealment of income or furnishing of inaccurate particulars of income. Therefore, even on merits penalty is liable to be deleted. FULL TEXT OF THE ORDER OF I...