IN INCOME TAX APPELLATE TRIBUNAL BENCH, CHENNAI BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA Nos.855, 856 & 857/Chny/2018 Assessment Year : 2006-07 M/s Prince Builders, Assistant Commissioner of New No.20, Old No.17/2, v. Income Tax, Kutchery Lane, Mylapore, Non-Corporate Circle 2, Chennai - 600004. Chennai - 600034. PAN : AAHFP0862G (Appellant) (Respondent) Appellant by : Shri S. Sridhar, Advocate Respondent by : Shri S. Bharath, CIT Date of Hearing : 31.07.2019 Date of Pronouncement : 05.09.2019 ORDER PER N.R.S. GANESAN, JUDICIAL MEMBER: All three appeals of assessee are directed against respective orders of Commissioner of Income Tax (Appeals)-2, Chennai. Therefore, we heard these appeals together and disposing same by this common order. 2. There was delay of 6 days in filing these appeals by assessee. assessee has filed petitions for condonation of delay. 2 I.T.A. Nos.855 to 857/Chny/18 We have heard Ld.counsel for assessee and Ld. D.R. We find that there was sufficient cause for not filing these appeals before stipulated time. Therefore, we condone delay and admit appeals. 3. I.T.A. No.857/Chny/2018 is against quantum assessment order passed by Assessing Officer. I.T.A. No.856/Chny/2018 is against penalty levied by Assessing Officer under Section 271(1)(c) of Income-tax Act, 1961 (in short 'the Act'). I.T.A. No.855/Chny/2018 is against penalty levied by Assessing Officer under Section 271(1)(b) of Act. 4. Let s first take quantum appeal in I.T.A. No.857/Chny/2018. 5. Shri S. Sridhar, Ld.counsel for assessee, submitted that assessee is in business of civil construction. According to Ld. counsel, Assessing Officer estimated profit at 8% of turnover. CIT(Appeals) also confirmed order of Assessing Officer. According to Ld. counsel, estimation of profit at 8% of total turnover is incorrect. remand report filed by Assessing Officer was not properly appreciated by CIT(Appeals). 6. We heard Shri S. Bharath, Ld. Departmental Representative also. assessee appears to have filed Profit & Loss account and balance sheet before Assessing Officer. However, no other material was filed before Assessing Officer to ascertain correctness of 3 I.T.A. Nos.855 to 857/Chny/18 net profit declared. Assessing Officer is expected to verify books of account and other bills and vouchers to ascertain whether profit is rightly determined. Since assessee has not filed any other material except Profit & Loss account and balance sheet even after giving proper opportunity, Assessing Officer estimated profit at 8% of total turnover. This Tribunal is of considered opinion that in absence of any other material to ascertain correctness of profit declared by assessee, estimation of profit at 8% is very reasonable, therefore, CIT(Appeals) has rightly confirmed same. Hence, this Tribunal do not find any reason to interfere with order of lower authority and accordingly same is confirmed. 7. Now coming to appeal regarding levy of penalty under Section 271(1)(c) of Act. 8. We heard Ld.counsel for assessee and Ld. D.R. assessee has disclosed net profit at 2.64%. However, Assessing Officer estimated profit at 8% for purpose of taxation. question arises for consideration is whether estimation at 8% would amount to concealment of any part of income or furnishing inaccurate particulars of income? This Tribunal is of considered opinion that estimation of profit involves little bit of guess work, presumption and assumption. Since assessee could not produce necessary material to support profit disclosed at 2.64%, Assessing Officer admittedly 4 I.T.A. Nos.855 to 857/Chny/18 estimated profit at 8% which was also confirmed by this Tribunal in earlier part of this order. It does not mean that assessee has concealed any part of income or furnished inaccurate particulars of income. Estimation of profit at 8% is as per statutory provision, therefore, there cannot be any presumption that assessee has concealed any part of income or furnished inaccurate particulars. In view of above, this Tribunal is unable to uphold orders of lower authorities. Accordingly, orders of both authorities below are set aside and penalty levied by Assessing Officer is deleted. 9. Now coming to levy of penalty under Section 271(1)(b) of Act, Assessing Officer levied penalty of 20,000/- for non-compliance of notice issued by Assessing Officer. 10. We heard both Shri S. Sridhar, Ld.counsel for assessee and Shri S. Bharath, Ld. D.R. From material available on record it appears that assessee-firm was closed on dissolution on 10.02.2006 by means of dissolution deed. assessee claims that other than letter dated 22.05.2009, no other communication was received. This Tribunal is of considered opinion that dissolution of partnership firm is reasonable cause on part of assessee for non-appearance. Moreover, assessee has filed appeal before this Tribunal against assessment order as well as penalty proceedings, which were confirmed by CIT(Appeals). On further appeal before this Tribunal, 5 I.T.A. Nos.855 to 857/Chny/18 assessment proceedings were confirmed. However, penalty under Section 271(1)(c) was deleted. In those circumstances, levy of penalty under Section 271(1)(b) of Act is not warranted. Therefore, we are unable to uphold orders of authorities below. Accordingly, orders of both authorities blow are set aside and penalty levied by Assessing Officer under Section 271(1)(b) of Act is also deleted. 11. In result, I.T.A. No.857/Chny/2018 is dismissed, I.T.A. Nos.855 & 856/Chny/2018 are allowed. Order pronounced in court on 5th September, 2019 at Chennai. sd/- sd/- (Inturi Rama Rao) (N.R.S. Ganesan) Accountant Member Judicial Member Chennai, 6 Dated, 5th September, 2019. Kri. Copy to: 1. Appellant 2. Respondent 3. : CIT(A)-2, Chennai 4. Principal CIT, Chennai-1, Chennai 5. DR 6. GF. Prince Builders v. Assistant Commissioner of Income-tax, Non-Corporate Circle-2, Chennai