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TMI Blog2021 (7) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... alled for hearing neither the assessee nor any of her authorized representatives was present on behalf of the respondent assessee to represent the case. There is no application for adjournment of hearing either. Consequently, we deem it fit and appropriate to proceed to dispose off the appeal ex-parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record. 3. Facts in brief:- In the present case, the assessee is an individual and is the proprietor of M/s. Nikil Sales Corporation, engaged in the business activity of trading of ceramics. The assessee filed its return of income on 24th September 2010, declaring total income of Rs. 2,47,668. Since the gross receipt during the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer considered the reply of the assessee along with the material furnished by the assessee and came to the conclusion that the contention of the assessee that she had made purchases from the alleged parties is not acceptable. He came to the conclusion that the assessee has not purchased any goods from these parties and treated it as fictitious purchases by cheque and received back the same amount in cash. He held that the assessee has also paid the small amount in cash to such parties as commission for providing such accommodation entries which is not recorded in the books of account of the assessee and hence the assessee failed to prove the genuineness of the purchases from such hawala parties. He also observed that the books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the order levying penalty passed by the AG and the statement of facts. The AG had added Rs. 22,65,8571- being entire bogus purchases to the total income of the assessee. Subsequently, the AO passed the penalty order u/s 271(1)(c) of the Act on 18-04-2016 for furnishing inaccurate particulars of income and also for concealing the particulars of income by way of bogus claim of expenditure, levying a minimum leviable penalty of Rs. 6,68,770/- being 100% of the tax sought to be evaded. 6.1 The appellant has contended that the purchases made by the appellant are genuine and supported by valid documents. The appellant has also contended that it has not concealed any particulars of income nor has it furnished inaccurate particulars of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the provision of Section 44AD and made the addition by estimating the net profit rate at 8 percent. Rejection of the books of account allowed the A.O. to make the addition on estimate basis. When the addition is made on estimate basis, no penalty under Section 271(1)(c) of the Income Tax Act, can be imposed as per the ratio laid down in the case of C.I. T. vs. Arjun Prasad Ajit Kumar, (2008) 214 CTR (All) 355, where it was observed that: "Appeal (High Court) -Substantial question of law- Penalty under section 271 (1)(c) CIT (A) deleted penalty under section 271(1)(c) on the ground that there being nothing on record that assessee's explanation lacked bona fides, penalty under section 271(1)c) could not be imposed on the basis of esti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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