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TMI Blog2018 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... lso denotes reference to specific item of amount added or disallowed as deduction in contrast to substitution of altogether a new estimated sum in place of the income returned. It is a case neither of addition or disallowance but a case of substitution - Accordingly, we delete the penalty levied - Decided in favour of assessee - ITA No. 95/JP/2017 - - - Dated:- 30-5-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri Saurabh Harsh, Advocate For The Revenue : Smt. Seema Meena, JCIT - DR ORDER PER BHAGCHAND, AM This appeal filed by the assessee emanates from the order of the ld. CIT(A)-2, Jaipur dated 30-11-2016 for the Assessment Year 2007-08 raising therein solitary ground as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of stock. He applied 25% income on unverifiable of ₹ 22,61,216/- at ₹ 5,65,304/-. In the appellate proceedings, the CIT (A) relying on the findings in course of survey and search by the BCTT Wingh was found that these parties are not in real business and only providing accommodation entries as well as the assessee's failure to prove the genuineness of purchases, confirmed the addition of 25% of such bogus purchases. The Assessing Officer then levied a penalty of ₹ 1,72,981/- on the addition made. In the present proceedings, assessee has neither filed any written submissions nor appeared before me. The purchases in question are from parties where information was available with the department as a res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate basis as it relates to specific parties from whom purchases were made and in whose cases verifications were sought to be made. Further, the Hon'ble Jaipur Bench of ITAT in the case of ITO vs Bhansali Trading Corporation (42 ITR (Trib) 254) where similar issue was involved has confirmed the penalty levied by the Assessing Officer. The relevant para is reproduced. Reliance is placed on this decision. 6. We have heard the rival contentions of both the parties and perused the material available on the record. The addition made by the Assessing Officer was specific on account of unverifiable purchases on which G.P. @ 25% was applied and added in the income. However, the same was reduced by the ld CIT(A) and applied di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed. The ground of appeal is dismissed. 2.2 During the course of hearing, the ld.AR of the assessee prayed for deletion of penalty of ₹ 1,72,981/- u/s 271(1) of the Act sustained by the ld. CIT(A) for which the ld.AR of the assessee relied on the orders of the ITAT Jaipur bench in the case of Deepak Dalela vs ITO (ITA No. 1027/JP/2013 for the Assessment Year 2006-07 dated 22-12-2016) and in the case of Euro Jewels vs ITO (ITA No. 712/JP/2017 for the Assessment Year 2009-10 dated 10-01-2018). The ld.AR of the assessee further submitted that the issue in question is covered by the above decisions and the penalty sustained by the ld. CIT(A) may kindly be deleted. 2.3 On the other hand, the ld. DR supported the orders of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial available on the record. The addition made by the Assessing Officer was specific on account of unverifiable purchases on which G.P. @ 25% was applied and added in the income. However, the same was reduced by the ld CIT(A) and applied different G.P. rate. However, the additions were specific. The assessee has not been able to produce these parties for verification and also summons were returned back to the officer unserved. This Bench recently decided this issue in detail in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases in ITA No. 187/JP/2012 order dated 22/10/2014 and gave detail findings on unverifiable purchases in number of cases. The department has been able to prove that in gems and jewellery business, some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s upheld the decision of the Tribunal for deleting the penalty. In the light of the above decision of the Hon'ble Jurisdictional High Court, we hereby direct the Assessing Officer to delete the penalty as in the present case also the Assessing Officer has estimated the profit by rejecting the books of account. Accordingly, we delete the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A). Respectfully following the decision on similar issue by ITAT Jaipur bench in the case of Deepak Dalela vs ITO (supra), we direct to delete the penalty of ₹ 1,72,981/- u/s 271(1)( c ) of the Act confirmed by the ld. CIT(A). Thus the appeal of the assessee is allowed. 3 .0 In the result, the appeal of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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