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TMI Blog2017 (1) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the facts of the case. Moreover the law relied by the departmental representative speaks that surrender of income on account of investigation to buy the peace is not voluntarily and statute does not recognize these type of defenses under the explanation 1 to section 271(1)(c) of the Act. Admission of bogus purchases leads to the concealment of income and furnishing the inaccurate particulars of income in the return. The surrender of income was not voluntarily and it is a fit case to levy the penalty. Therefore, in view of the law settled in Mak Data P. Ltd. Vs. Commissioner of Income Tax [2013 (11) TMI 14 - SUPREME COURT] we are of the view that it is a fit case to levy the penalty, hence the order passed by the CIT(A) is correct an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes due to avoid litigation, buy peace and with a request to grant immunity from penalty. 3. Thus your appellant prays that penalty of ₹ 8,10,638/- may please be deleted. 3. The brief facts of the case are that the assessee filed return of income on 28.09.2010 declaring total income to the tune of ₹ 1,18,04,147/- after claiming deduction of ₹ 45,28,365/- u/s.80IC(3) of the Income Tax Act, 1961 ( in short the Act ). The return was processed u/s.143(1) of the Act. Thereafter, the case was selected for scrutiny and statutory notices u/s.143(2) and 142(1) of the Act were issued on 26.08.2011 and sent by post to the address mentioned in the return of income filed by the assessee. The notice u/s.143(2) dated 26.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,97,063/- 4 Anshu Mercantile Pvt. Ltd. 8,88,750/- Thereafter, by giving an opportunity of being heard the bogus purchases to the tune of ₹ 27,02,126/- was added to the income of the assessee. Thereafter, the penalty proceeding was initiated in which the assessee submitted the reply dated 30.07.2013 in pursuance of notice dated 12.07.2013 which is reproduced below for ready reference:- Without prejudice to the claim of expenditure, the assessee wants to concentrate on the business and wants to buy peace by paying the taxes on this discrepancy. Under the circumstances, the assessee hereby admits that the bills from the above mentioned do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion and placed reliance upon the law settled in [2013] 358 ITR 593 (SC) Mak Data P. Ltd. Vs. Commissioner of Income Tax. With due regard to the contentions raised by the learned representative of the parties and perused the record carefully, it came into the notice that the Assessing Officer in the assessment order dated 24.01.2013 added the bogus purchases to the tune of ₹ 27,02,126/- as income of the assessee in view of the letter received from DGIT (Inv.), in which the said company was found to be involved in Hawala entries in the finding of the Sales Tax Department, Maharashtra. After the submission of the penalty s notice dated 30.07.2013, the assessee replied which is reproduced as under:- Without prejudice to the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incharge. Proper bills are not collected by the site incharge. In many cases the clients demands to show the bill for purchases. To counter this issues the assessee has made arrangement with the abovementioned parties who give the bills against the said purchases. The said parties are paid by cheque, the cash received back from them is offset against the case submits that the expenses are not inflated by this arrangement, only the expenses are matched in the books. During the VAT Audit it was found that the parties have not paid any MVAT and were involved in issuing bogus bills. After the fact was known to the assessee. The MVAT was fully paid for by the assessee against the said purchases. The assessee wants concentrate on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as bonafide thus the penalty u/s.271(1)(c) was not leviable. Whereas in the instant case the facts are totally different. During the assessment an information was received from DGIT (Inv.), Mumbai about the four firms engaged in Hawala entries. The name of the four firms were Ganesh Enterprises, Amar Enterprises, Saradge Enterprises and Anshu Mercantile Pvt. Ltd. Notice was given to the assessee but there was no proper reply, however, the assessee accepted the bogus purchase to buy peace and paid the tax accordingly. In the said circumstances the said law is not applicable to the facts of the case. Moreover the law relied by the departmental representative speaks that surrender of income on account of investigation to buy the peace is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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