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TMI Blog2020 (10) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri Subodh Ratnaparkhi, A.R ORDER PER RAVISH SOOD, JM The present appeal filed by the revenue is directed against the order passed by the CIT(A)-1, Mumbai, dated 21.02.2019, which in turn arises from the penalty order passed under Sec. 271(1)(c) of the Income Tax Act, 1961 (for short Act‟), dated. 28.08.2015 for A.Y. 2008-09. The revenue has assailed the impugned order on the following grounds of appeal before us: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justif ied in deleting the penalty levied u/s 271(l)(c) without properly appreciating the decisions of the Hon'ble Apex Court in the case of Mak Data Pvt. Ltd. Vs CIT ( Civil Appeal No. 9772 of 2013 ) , the Hon'ble Gujarat High Court's decision in the case of N. K. Proteins Ltd, Tax Appeal No. 242 of 2003 dated 20/06/2016 against which the SLP was dismissed by the Hon'ble Supreme Court and also ignoring the fact that Department received specific credible information in this case from the Sales Tax Department of the State Government of Maharashtra in respect of non-genuine purchases. 2. Whether on the facts and in the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014. In its aforesaid revised computation of income the assessee had on its own disallowed the purchases amounting to ₹ 5,23,050/- (net purchases), for computing its income for the year under consideration. In compliance to notice issued under Sec.148, dated 20.03.2014, the assessee submitted that its paper return filed on 20.03.2014 declaring a total income of ₹ 4,83,75,010/- may be treated as the return filed in compliance to the aforesaid notice. 4. During the course of the reassessment proceedings, it was observed by the A.O that as against the declaration of ₹ 8,39,450/- made by the assessee in the course of the survey action under Sec.133A, only purchases amounting to ₹ 5,23,050/- were disallowed by the assessee. In the backdrop of the aforesaid facts the A.O called upon the assessee to explain as to why the purchases of ₹ 3,16,400/- which were claimed to have been made from M/s Manav Impex may not be considered as bogus and therein disallowed. In reply, it was submitted by the assessee that post survey proceedings, on verifying the purchase bill file and other voluminous records, it was able to find the octroi declaration forms in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (-) ₹ 4,78,51,960/- (Original returned income of the assessee) (+) ₹ 63,280/- (addition as regards the profit/margin estimated by the A.O in respect of bogus purchases of ₹ 3,16,400/- which were claimed by the assessee to have been made from M/s Manav Impex)]. Accordingly, the A.O imposed a penalty of ₹ 1,99,294/- in the hands of the assessee, vide his order passed under Sec. 271(1)(c), dated 28.08.2015. 5. Aggrieved, the assessee assailed the penalty imposed by the A.O under Sec. 271(1)(c) before the CIT(A). Observing, that there may be a number of reasons on the part of the assessee in agreeing to an addition and not carrying the matter any further in appeal, the CIT(A) was of the view that merely because the assessee had not assailed the quantum assessment any further in appeal would not justify levy of penalty under Sec. 271(1)(c) of the Act. Apropos the disallowance of the impugned bogus purchases and the consequential addition made by the A.O, the CIT(A) was of the view that a simplicitor disallowance of a percentage of purchases de hors any finding of concealment on the part of the assessee would not justify levy of penalty under Sec. 271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the material sold by them to the assessee company were not forthcoming, and thus, could not be verified, therefore, purchases made from the abovementioned parties were being offered for disallowance. In the backdrop of the aforesaid facts, we are of the considered view that the impugned purchases claimed by the assessee to have been made from the aforementioned parties had been disallowed and offered for tax, primarily for the reason, that the concerned supplier parties having failed to have complied with the VAT provisions were thus not forthcoming with the confirmations of their transactions with the assessee, as a result whereof, the purchase transactions under consideration had remained unverified. As such, we are of a strong conviction that the assessee in order to buy peace of mind and to avoid litigation had in all fairness offered to disallow the aforesaid purchases. In the totality of the facts involved in the case before us, we find ourselves to be in agreement with the view taken by the CIT(A) that an income offered as an addition/disallowance by an assessee, de hors any material proving concealment or furnishing of inaccurate particulars of income on its part, ..... 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