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TMI Blog2015 (3) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... of account from the various parties. The Hon'ble Supreme Court in the case of Mak Data P. Ltd. Vs. CIT (2013 (11) TMI 14 - SUPREME COURT) has held that the assessee fails to offer an explanation which is bonafide and proved that all the material facts have been disclosed, penalty proceeding is justified. In the case of CIT Vs. Kalindi Rail Nirman Engineering Ltd.(2014 (4) TMI 679 - DELHI HIGH COURT) has held that even imposition of penalty on estimate is justified, are squarely applicable. Therefore, we confirm the order of the ld. CIT(A) in both the assessment years. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to the non maintenance of quantitative details of purchases and sales as well as of opening and closing stock while upholding the rejection of books of account under section 145(3) of the Act. We, thus, while setting aside orders of the lower authorities, direct the A.O. to sustain addition of ₹ 5,00,000/-." Similar finding has been given by the Hon'ble ITAT for A.Y. 2005-06, which is reproduced as under:- "Considering all these facts and circumstances of the case, as discussed above in totality, we are of the view that instead of denial of total purchases in question, especially when sales have not been denied by the A.O. and that the quantitative details of purchases and sales as well as of opening and closing stock have not been maintained, it would be just and proper to sustain addition of ₹ 2,00,000/- during the year to plus the leakage, if any, caused by the above discrepancies. We thus while setting aside orders of the lower authorities, direct the A.O. to sustain addition of ₹ 2,00,000/- only." The ld. Assessing Officer before imposing penalty U/s 271(1)(c) has given reasonable opportunity of being heard to the assessee. After considering the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of Section 271(1)(c) of the Act. Therefore, he imposed penalty at ₹ 1,79,375/- for A.Y. 2004-05 and ₹ 73,185/- for A.Y. 2005-06, which is 100% tax sought to be evaded. 3. Being aggrieved by the order of the Assessing Officer in both the years, the assessee carried the matter before the learned CIT(A), who had submitted before him that no penalty U/s 271(1)(c) of the Act can be levied in this case as the addition had been made on estimate basis but the ld. CIT(A) decided as under:- "The appellant has contended that no penalty U/s 271(1)(c) of IT Act can be levied in this case as the addition has been made on estimate basis. Such contention appears to be factually incorrect in as much as in this case the addition has not been made on estimate basis and specific addition on account of bogus purchases was made which was restricted to ₹ 5 lacs by Hon'ble ITAT. The appellant has also placed reliance on the case laws reported in CIT Vs. Aero Traders Pvt. Ltd. (2010) 322 ITR 316. In this case the A.O. has rejected the books of accounts and accordingly estimated the profit and penalty was imposed on account of such addition made on estimate basis. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the appellant's case are also broadly similar to the facts and circumstances of the above mentioned case in as much as the appellant has also made claim for bogus purchases which were sustained to the extent of ₹ 5 lacs. Ld. CIT(A) has further held that the reliance is also placed on the decision of Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication Pvt. Ltd. reported in (2010) 327 ITR 510. In this case, the Hon'ble Court has essentially held that if the assessee has made a claim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such a claim is not found to be of bonafide nature, then it will be definitely a case of penalty u/s 271(1)(c) of IT Act. The facts and circumstances of the appellant's case also indicate the appellant has made absolutely incorrect claim on account of bogus purchases to the extent of ₹ 5 lacs and therefore imposition of penalty was justified, keeping in view the proposition of law laid down by the Hon'ble High Courts as discussed above. Having considered all the facts and circumstances as discussed above, I am of the considered view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 5,00,000/- sustained by ITAT to plug the leakage, if any, caused due to possibility of claimed purchases in question from someone else as the A.O. has not doubted the sales and due to non-maintenance of quantitative details of purchases and sales as well as opening and closing stock while upholding the rejection of books of accounts u/s 145(3) of the Act and on such facts of case imposition of penalty for furnishing inaccurate particulars is not justified. Reliance is placed on the judgment in case of CIT Vs. Aero traders P. Ltd. (2010) 322 ITR 316 and Naresh Chand Agarwal Vs. CIT (2014) 265 CTR 306 where it is held no penalty U/s 271(1)(c) can be imposed where addition is made on estimate basis. The Hon'ble ITAT, Jaipur Bench, Jaipur in case of Kamlesh Dangayach Vs. ACIT (ITA No. 18 & 19/JP/2012 order dated 16/05/2012)- copy annexed exactly on similar facts deleted the penalty U/s 271(1)(c) which judgment squarely applies in the case. In view of above submissions penalty of ₹ 1,79,375 confirmed by Ld CIT(A) deserves to be deleted. Similar arguments were advanced by the ld. AR for A.Y. 2005-06. 5. At the outset, the learned D.R. supported the order of the Ld. CIT(A). 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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