2024 (8) TMI 1294 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - addition of 12.5% of non-genuine purchases - HELD THAT - Considering the facts, we are of the opinion that the AO has not fully established that, the assessee has concealed his income and made purchases from the grey market. Merely because the profit has been estimated and the assessee chose not to litigate further, would not amount to concealment of income or filing of inaccurate particulars. As decided in AARKAY SAREE MUSEUM 1990 (8) TMI 97 - BOMBAY HIGH COURT merely because certain additions were made in the trading account by the Assessing Officer, it did not necessarily follow that the assessee had concealed its income. Thus we do not find any merit in the levy of impugned penalty u/s 271(1)(c) - Decided in favour of assessee.

Summary

The ITAT Mumbai allowed the appeals filed by the assessee against the penalty imposed under section 271(1)(c) for non-genuine purchases. The Tribunal held that the AO did not establish concealment of income, citing judicial precedents. The penalty was directed to be deleted for all assessment years in appeal.