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TMI Blog2021 (10) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... icer made an addition based on the information received from Sales tax department Maharashtra. We are of the opinion that once the revenue accepts that penalty is levied on the basis of information from the outside agency/ department, the penalty is not sustained - Decided against revenue. - ITA Nos. 1411 And 1412/Mum/2020 - - - Dated:- 17-9-2021 - Shri S Rifaur Rahman, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri S.N. Kabra, DR For the Respondent : None ORDER PER PAVAN KUMAR GADALE, JM: These are the two appeals filed by the Revenue against the separate orders of the Commissioner of Income Tax (Appeals) -44 Mumbai, passed u/s. 271(1)(c) and 250 of the Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal though the tax effect is below the monetary limit prescribed in the CBDT Circular No. 17/2019 dated 08.08.20 19 r.w. Circular No. 3/2018 dtd 11.07.2018 as amended on 20.08.2018 as the case falls in the exception provided in para 10(e) of the said Circular in as much as the addition is based on information received from external sources in the nature of law enforcement agencies, namely, Sales Tax Authorities. 5. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 6. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 2. The Brief facts of the case are that, the assessee is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remarks left and there was no compliance. Therefore, the assessee was issued show cause notice on 02.12.2016 to produce the details referred at Para 4.1 of the order. The assessee has submitted the details supporting the purchases i.e ledger, bills, bank statements etc. Whereas the A.O has dealt on the facts, evidence, judicial decisions and the percentage of gross profit ratio on sales. Finally, the A.O. relied on the Hon ble High Court decisions and estimated the profit element of bogus purchases @ 8% and worked out the addition of ₹ 4,01,983/- and assessed the total income of ₹ 20,64,580/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 28-12-2016. 4. Subsequently, the A.O has initiated penalty proceedings u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has obtained bogus purchase bills and the same could not be overlooked and prayed for allowing the revenue appeal. 7. We heard the Ld.DR submissions and perused the material on record. The sole crux of the disputed issue as envisaged by the Ld.DR that the CIT(A) has erred in deleting the penalty overlooking the transactions of bogus purchases. Whereas, the Ld.CIT(A) considering the facts and circumstances observed that the penalty cannot be levied on estimated income. We find that the A.O. has estimated income/gross profit @ 8% on bogus purchases. We are of the opinion that when the addition is on estimated basis, penalty u/s 271(1)(c) of the Act cannot be levied on such adhoc estimated income. The disallowance of purchases on ad-hoc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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