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TMI Blog2023 (2) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act cannot be levied where the addition is made on estimated basis. From the above observation we hereby delete the penalty levied by the A.O. and find no justification in the order of the ld. CIT(A). - Decided in favour of assessee. - ITA Nos. 2326 & 2325/Mum/2022 - - - Dated:- 24-1-2023 - SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM Assessee by : None Revenue by : Shri Vranda U. Matkarni ORDER Per Bench : These appeals have been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) ( ld.CIT(A) for short), National Faceless Appeal Centre ( NFAC for short) u/s.250 of the Income Tax Act, 1961 ( the Act'), pertaining to the Assessment Years ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the beneficiaries of receiving bogus purchase bills without actual delivery of goods or services. 5. During the assessment proceeding, it is stated that the assessee has failed to produce the suppliers, brokers or transporters before the A.O. and has also failed to prove the genuineness of the impugned purchases. The A.O. made an addition of Rs.7,75,388/- being 2.58% gross profit ratio + 3% addition made as VAT. 6. In an appeal before the ld. CIT(A) against the assessment order passed u/s. 143(3) r.w.s. 147 of the Act, the ld. CIT(A) restricted the gross profit @ 2.58% on account of bogus purchases. It is observed that the penalty proceeding u/s. 271(1)(c) of the Act was initiated against the assessee for concealment of particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd deducted 3% addition made as VAT. 8. From the above facts, it is evident that the said addition made in the case of the assessee pertains to the addition made on bogus purchase on estimated basis. It is also pertinent to point out that the A.O. has arrived at the percentage of the gross profit based on the average gross profit earned by the assessee for A.Ys. 2008-09, 2009-10 and 2010- 11. We would like to place our reliance in the decision of the co-ordinate bench in ITA No.5384/Mum/2019 in the case of ACIT vs. M/s. Fancy Diamonds India Pvt. Ltd. vide order dated 17.06.2022, which has held that in case where the addition is made on estimated basis, the penalty u/s. 271(1)(c) of the Act is not leviable. The Tribunal has relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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