SHANKARLAL P.MALI,MUMBAI vs. DCIT-CC4(4),RANGE-4, MUMBAI

These are the appeals filed by assessee against the order of CIT(A)-52, Mumbai dated 23/02/2016 for A.Y.2001-02 to 2007-08 in the matter of imposition of penalty u/s. 271(1)(c) of the IT Act.

Rival contentions have been heard and record perused. Facts in brief are that assessee is an individual carrying on proprietary concern under the name M/S SUNDHA MAA ENTERPRISES from Asst. Year 1990- 91. Presently Assessee is carrying on business of manufacturer of ready- made shirts in the name of M/S. SUNDHA MAA ENTERPRISES. The 2689/Mum/2016 Shri Shankarlal P. Mali assessee group is dealers in readymade garments. Some of the items dealt in by the group are Shirts, Kids-wear and Sherwani etc. The manufacturing activity consists of procuring material from suppliers and cutting the same according to size by master tailors. A search and seizure operation u/s.132 of the Act was carried out on these group of cases on 28/06/2006. Certain incriminating documents were found during search with regard to unaccounted purchase and sales.

During the course of assessment, the AO on the unaccounted sales estimated GP and added the same in assessee’s income. AO also levied penalty u/s. 271(1)(c) with respect to the additions so made.

At the outset learned AR placed on record the order of the Tribunal in quantum appeal dated 26/06/2018 wherein most of the additions with respect to which penalty was levied, was deleted by the Tribunal. As per the details filed by learned AR the additions so sustained by Tribunal are with respect to the estimated profit on accounted sales are as under:- Assessment Year Profit 2001-02 8 2002-03 110 2003-04 32 2004-05 7,271 2005-06 40,274 2006-07 2,65,212 2007-08 52,805