FUN N FOOD RESTAURANT,THANE vs. ACIT, CENTRAL CIRCLE-3,, THANE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKARAssessment Year: 2019-20
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 06.02.2024, impugned herein, passed by the Ld.
Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y.
2019-20. M/s. Fun N Food Restaurant
2
2. In this case, the Assessing Officer (AO) vide order dated
19.08.2021 u/s 144 of the Act has made following additions:
"Rs.64,52,870/-on account of suppressed sales.
Rs. 12,97,535/ on account of non verifiable expenses @ 10% of the total expenses of Rs. 1,29,75,351/-u/s 37(1) of the Act."
Subsequently, the penalty proceedings were also initiated u/s 271(1)(c)/270A of the Act, which resulted into levy of penalty u/s 271(1)(c)/270A of the Act, to the tune of Rs.57,23,766/- @ 200% of the income escaped/total additions of Rs.77,50,405/- (Rs.64,52,870/- + Rs.12,97,535/-).
Admittedly, the addition of Rs.12,97,535/- was on account of adhoc disallowance of indirect expenses @ 10%, which has subsequently been deleted by the Ld. Commissioner vide impugned order and therefore said addition is not in existence. However, the Ld. Commissioner affirmed the penalty to the tune of Rs.57,23,766/- on the addition of Rs.64,52,870/-, which has also been subsequently reduced to Rs.3,94,915/- @ 6.12% of the suppressed sale of Rs.64,52,870/-, by the Hon'ble Tribunal vide order dated 04.09.2024 passed in quantum appeal i.e. ITA No.4686/M/2023. 5. Admittedly, the addition, as sustained by the Hon'ble Tribunal ultimately, is also based on the estimation of profit. As it is the mandate of the law that the penalty on the estimated addition, is hardly sustainable and therefore by considering peculiar facts and circumstances in totality and specific to the effect that major part of the addition has already been deleted and therefore penalty on the amount of addition of Rs.64,52,870/- is un-sustainable. Consequently, we are deleting the same. Thus, the penalty levied by the AO and sustained by the Ld. Commissioner is deleted. M/s. Fun N Food Restaurant
In the result, the appeal filed by the Assessee is allowed.
Order pronounced in the open court on 27.05.2025. (PRABHASH SHANKAR) (NARENDER KUMAR CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The DR Concerned Bench
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By Order
Dy/Asstt.