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TMI Blog2015 (10) TMI 1705X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case the Ld. CIT(A) was right in deleting the penalty of Rs. 22,63,450/- imposed by the AO u/s 271(1)(c) of the Income Tax Act, 1961 especially when the books of account of the assessee were an reliable and an addition on account of low G.P. was confirmed by the CIT(A)? (ii) "Whether on the facts and in the circumstances of the case the Ld. CIT(A) was right in deleting the penalty of Rs. 22,63,450/- imposed by the AO u/s 271 (1)(c) of the Income Tax Act, 1961 especially when:- (a) The assessee failed to conclusively establish the genuineness of the parties from whom purchases were made. (b) Failed to produce the parties concerned. (c) Failed authenticate what was shown in the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no satisfaction to initiate penalty u/s 271(1)( c) was recorded by the CIT(A) at the time of giving direction to make trading addition purely on estimate basis. 4. The CIT(A) on the facts and circumstances of the case, was right in deleting penalty u/s 271(1)(c) of the Income Tax Act which was imposed by the Assessing Officer in respect of trading addition as per directions of CI.T.(Appeals) while the satisfaction to initiate penalty has been recorded in respect of unverified purchase in the assessment order. 5. The CI.T.(A) ,on the facts and circumstances of the case, was justified in deleting penalty, the Assessing officer had failed appreciate the conclusion of the CIT(A) that sufficient process of the evidences of transaction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchases from three parties as bogus. As per sec 271(l)(c), penalty is to be levied if the assessee has concealed particulars of income or has furnished inaccurate particulars of such income. In this case at hand, the issue boils down to the fact that the whole basis of levying the penalty were unverifiable purchases from certain parties which has been deleted emphatically by the CIT(A) in a detailed manner and the addition which has been sustained is only on the basis of estimation of average G.P. rate of the five concerns of the group. In other words, the whole basis of making the addition by the AO has been set aside. Moreover, the work performed as reflected in the trading Account has been accepted by the AO which implies that work c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained on account of application of GP., the penalty would not be leviable. In view of the Ld. CIT(A) has rightly held that there is no justification of levying the penalty u/s. 271(1)(c) since the very basis of initiation of penalty on account of bogus purchases has been deleted. We also find considerable cogency in the assessee's counsel contention that since the ITAT 'H' Bench, Delhi in assessee's own case in the quantum Appeal in ITA No. 5599/Del/2010 (AY 2008-09) vide order dated 8.7.2015 has deleted the addition in dispute and, therefore, penalty in dispute does not survive. Therefore, in view of the above, we find that Ld. CIT(A) has passed a well reasoned order which does not need any interference on our part, hence, we affirm the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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