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TMI Blog2019 (4) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... hannels. For the purposes of exports, the assessee purchases goods from various dealers including above named JPK Trading (I) Pvt. Ltd and the same were exported outside India. In the course of this regular business activity the assessee inter alia purchased goods, namely precious and semi precious gems and stones from above named company JPK Trading (I) Pvt. Ltd. and to prove the genuineness of the purchases made from above named party the assessee furnished copy of purchases invoices, copy of bank statements copy of export invoices, Airways bills, bank advice in relation to realization of sale proceeds in foreign exchange, confirmation of supplier, TIN of supplier which is issued to a dealer doing business of purchase/sale issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) without specifically pointing out in the show cause notice, whether penalty was proposed on concealment of particulars of income or for furnishing inaccurate particulars of income. 2. Rival contentions have been heard and record perused. The facts in brief are that the assessee is engaged in the business of trading and export of precious and semi precious stones. During the course of assessment proceedings U/s 143(3) read with Section 147 of the Act, the Assessing Officer made addition by estimating 25% of the alleged bogus purchases. The ld. CIT(A) has reduced the estimated addition to the extent of 15% of the bogus purchases. However, the A.O. also levied penalty U/s 271(1)(c) of the Act with regard to the alleged addition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to penalty so imposed by the A.O. U/s 271(1)(c) of the Act. However, the quantum and penalty proceedings are separate and if in the penalty proceedings, it is found that the assessee has furnished all the evidences to substantiate its claim of not furnishing inaccurate particulars, no penalty is to be imposed even if the addition is being confirmed. In the instant case, the assessee is carrying on business at Jaipur as exporter and trader of precious and semi precious gems and stones from last many years. The entire sales of ₹ 4,11,22,504/- are export sales and all realizations of sale proceeds are in the form of foreign currency through proper banking channels. For the purposes of exports, the assessee purchases goods from various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on the record. The addition made by the A.O. 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 the parties were giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution. In view thereof, the Hon'ble High Court has 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). 7. In view of the above discussion, we do not find any merit in imposition of penalty U/s 271(1)(c) of the Act and the Assessing Officer is directed to delete the same. We order accordingly. 8. In the result, appeal of the assessee is allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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