9911796707
TMI Blog2023 (10) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... at in case where the addition is made on estimated basis, the penalty u/s. 271(1)(c) of the Act is not leviable. Tribunal has relied on the decision of Krishi Tyre Retreading and Rubber Industries [ 2014 (2) TMI 21 - RAJASTHAN HIGH COURT ] the decision of the Hon ble Punjab Haryana High Court in the case of CIT vs. Sangrur Vanaspati Mills Ltd. [ 2008 (2) TMI 285 - PUNJAB AND HARYANA HIGH COURT ] and Subhash Trading Co. Ltd. [ 1995 (11) TMI 37 - GUJARAT HIGH COURT ] on estimated basis, there cannot be any penalty levied. In assessee s case the AO has made the addition by estimating the profit @ 12.50% on alleged bogus purchases for the reason that the assessee has spiked the purchase price in order reduce the profits and the said p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the action of the Ld. Assessing Officer in levying a penalty of Rs. 2,15,053/- u/s 271(1)(c) for Income Tax Act, 1961, without considering the facts and circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Ld. CIT(A) has erred in confirming the action of Learned Assessing Officer in levying a penalty of Rs. 2,15,053/- on the issue of an addition made of Rs. 7,16,843/- (being 12.50 percent of alleged profit earned on account of Non genuine purchases, without appreciating the fact that penalty is not to be imposed on the issue of addition made on estimate basis. 2. The assessee is a firm engaged in the business of trading in precious, semi precious stones, synthetic stones and si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entary evidence to support the purchases. Accordingly the Assessing Officer applied 12.50% towards the rate of profit to make an addition of Rs. 7,16,843/- while completing the assessment under section 143(3) read with section 147. Subsequently, the Assessing Officer initiated penalty proceedings under section 271(1)(c) by issuing a show cause notice for the reason that the assessee has furnished inaccurate particulars of income and that the quantum appeal filed by the assessee before the CIT(A) has been dismissed. The assessee submitted that the profits were estimated at 12.5% of the amount attributable to alleged bogus purchases solely based on the information received from the DGIT(Inv). The assessee submitted that it is maintaining prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition is made in assessee s case as a percentage of bogus purchases i.e. by applying 12.50% towards gross profit on the bogus purchases. The Assessing officer while levying penalty has applied the minimum tax rate on the gross profit estimated by the Assessing Officer. The main contention of the ld AR is that when profit is arrived at on an estimate basis there cannot be any levy of penalty for concealment of income for which he relied on various judicial pronouncements. We notice that the coordinate bench of the Tribunal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
