9911796707
TMI Blog2021 (8) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... tains to the assessment year 2011-12. 2. When the case was called for hearing, no one was present on behalf of the respondent assessee to represent the case. There is no application for adjournment of hearing either. Therefore, we 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. The grounds on which the present appeal has been preferred by the Revenue are as under:- "1. Whether on the facts and in the circumstances of the case and in law, the IA. CIT(A) was correct in deleting the penalty of Rs. 1,18,200/ - levied u/s. 271(1)(c) of the Act as the penalty was levied on quantum additions made on account of bogus purchases, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s original return of income on 29th September 2011, declaring total income at Rs. 3,77,040. The Assessing Officer noticed that during the previous year relevant to the assessment year under consideration, the assessee had made purchases worth Rs. 1,17,60,320, and out of this purchase, an amount of Rs. 29,53,032, has been effected from M/s. Ronak Enterprises. Subsequently, on the basis of information received from the Investigation Wing of the Department, which revealed that the assessee had taken accommodation bill for purchase through the above party which was declared as hawala operator by Maharashtra Sales Tax Department, the case was re-opened by issuance of notice under section 148 of the Act. During the course of the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016. The assessee being aggrieved is in further appeal before the learned CIT(A) and contesting the issue related to penalty under section 271(1)(c) of the Act. 6. The learned CIT(A) deleted the penalty observing that the Assessing Officer cannot impose penalty on the basis of estimated addition. The relevant observation of the learned CIT(A) is extracted below for the sake of brevity:- "6. I have considered the facts of the case and the appellant's submissions. "6.1 The Grounds No 1 & 2 of the appeal are against levying of penalty of Rs. 1,18,200/- u/s 271(1)(c) of the Act. The AO had added of Rs. 4,42,955/- being 15% of non genuine purchase of Rs. 29,53032/- to the total income of the assessee. Subsequently after the order of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 estimating sales and making addition by applying net profit rate Same was rightly sustained by Tribunal and no substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no findings of the AO that the details furnished by the appellant in his return are found to be inaccurate; or erroneous or false. Accordingly, I delete the penalty of Rs. 1,18,200/- levied by the AO u/s 271(1)(c) of the Act and the grounds of appeal are Allowed." 7. Aggrieved, the Revenue is in appeal before us. 8. The learned Departmental Representative submitted that the assessee has failed to prove the fact that the corresponding sales have been effected which indicate that the suspected hawala parties are non-existent and never supplied any material to the assessee and, hence the purchases made from the said party cannot be genuine. Hence, the Assessing Officer was indeed justified in making addition and consequently imposing penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
