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TMI Blog2017 (1) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We are of the considered opinion that in view of the ratio in the various decisions as above penalty cannot be sustained. It is also a settled legal position of law that penalty cannot be levied wherein the assessment is made on estimation basis. Accordingly, we are inclined to uphold the order passed by the ld.CIT(A) by dismissing the appeal of the revenue. - I.T.A. No. 5586/Mum/2015 - - - Dated:- 16-1-2017 - SHRI MAHAVIR SINGH, JM AND SHRI RAJESH KUMAR, AM For the Appellant : Shri Shivaji Gode For the Respondent : Ms. Nimisha Bothara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of assessment proceedings, the AO observed that a search was carried out by the Sales Tax Authorities and also a survey u/s 133A of the Income Tax Act, 1961 was carried out by the DDIT(Inv) V(I), Mumbai on some hawala operators who were engaged in providing accommodation entries without supplying goods. On this basis, the AO noted that the assessee has also taken accommodation entries. The AO thereafter called for the explanation from the assessee as to why the books of account should not be rejected and proportionate disallowance on bogus purchases should not be made. 4. In response to the show cause notice, the assessee vide letter dated 6.3.2013 submitted before the AO that the material was actually purchased and received an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the First Appellate Authority who after considering the contentions and submissions of the assessee and various case laws relied upon by the assessee deleted the penalty levied by the AO by observing and holding as under : Thus, it is seen that the AO has imposed penalty on an addition which was based on estimation and that too, all adhoc addition and had hardly any chance of survival at higher appellate forums. The assessee did not prefer appeal against the addition to buy mental peace and avoid litigations, but that itself does not proof any concealment on part of the assessee or furnishing of any inaccurate details. For imposition of penalty, the additions has to be on sound footing with concrete evidences of concealment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roborated his actions with any further investigation or by bringing any materials on records other than the statements of the parties before the sales tax authorities. In fact the entire assessment was based on estimate , surmises and presumptions. The ld. AR also submitted that the similar additions made by the AO on the basis of information received from Sales Tax departments were deleted in series of case cases by the ITAT as well as Jurisdictional High Court. The ld. AR, therefore, submitted that the addition made by the AO though not challenged by the assessee before FAA to buy peace of mind could not be taken to mean that assessee has accepted the charges leveled by the AO and this did not per se proved the concealment of income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and assessed u/s 69C of the Act. We heard the parties and perused the record. The total purchase expenditure claimed by the assessee during the year under consideration was ₹ 7,36,27,555/-. The AO noticed that the Sales Tax Department of Government of Maharashtra has listed out names of certain dealers, who were alleged to have been providing accommodation entries without doing actual business. The AO noticed that the assessee made purchases to the tune of ₹ 38.69 lakhs from two parties named M/s Umiya Sales Agency Pvt Ltd and M/s Mercury Enterprises, whose names found place in the list provided by the Sales Tax Department. The AO placed full reliance on the enquiries conducted by Sales Tax Department in respect of the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by Hon ble Gujarat High Court in the case of CIT Vs. M.K. Brothers (163 ITR 249). He has further relied upon the decision rendered by the Tribunal in the cae of ITO Vs. Premanand (2008)(25 SOT 11)(Jodh), wherein it has been held that where the AO has made addition merely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of ITA. No.5920/Mum/2013 and 6203/Mum/2013 7 showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld CIT(A) has also appreciated the contentions of the assessee that he w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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