9911796707
TMI Blog2024 (8) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... bills of purchases as per the information supplied by the Sales Tax Department. It is clear that in the case of the assessee the addition was made on estimation basis therefore following the decision of ITAT in JATIN ENTERPRISES VERSUS ACIT-19 (2) , MUMBAI [ 2024 (3) TMI 1073 - ITAT MUMBAI] we consider that penalty levied in the case of the assessee on estimated addition is not sustainable. Therefore, the penalty levied is deleted. Accordingly, both the grounds of appeal of the assessee are allowed. - SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER For the Appellant : Ravi Gupta For the Respondent : Ashok Kumar Ambastha ORDER PER AMARJIT SINGH (AM): All these 3 appeals filed by the assessee are directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name was appeared in the list provided by the Maharashtra Sales Tax Department. The assessee had made purchases of Rs. 1,08,71,191/- without delivery of goods as reported in the list of Sales Tax Department from 10 different parties as mentioned at page no. 2 of the assessment order. Therefore, the case of the assessee was reopened u/s 147 of the Act by issuing of notice u/s 148 of the Act on 21.03.2014. On query the assessee has submitted purchase details along with comprising sales and bills along with stock details etc. However, the assessing officer has not agreed with the submission of the assessee and on the basis of facts as discussed above added 12.5% of the aforesaid purchases to the amount of Rs. 13,58,899/- being profit element i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sales Tax Department, therefore estimated the profit element embedded in such purchases at 12.5% of the purchase amount of Rs. 108,71,191/- and made addition of Rs. 13,58,899/- to the total income of the assessee. During the course of assessment, the assessee has furnished detail of purchases and other documentary evidences connected with the purchases made from the said dealers as referred at para 7 of the assessment order by the assessing officer reproduced as under: Similarly, details of corresponding sales of goods were also called for as per annexure-B and link the purchase with sales supported by bills and vouchers and reflection in the stock register of its entry and exit item by item. The assessee was also asked to produce books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as referred by the ld. counsel in the case of Jatin Enterprises Vs. ACIT-19(2) dated 21.03.2024 where on identical fact also the CIT(A) has restricted the addition to the extent of 12.5% on estimation basis. The ITAT has deleted the penalty holding that penalty levied u/s 271(1)(c) of the Act on estimation addition is unsustainable. The relevant extract of the decision of the ITAT is reproduced as under: 4. We have heard the submissions made by rival sides. It is an undisputed fact that the Assessing Officer has made addition in the case of assessee on account of alleged bogus purchases. The Assessing Officer made addition of 100% of unproved purchases, the CIT(A) restricted the addition to 12.5% of such purchases. The addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase amount was made on the ground of extra profit earned by the assessee on such purchases because the parties were involved in issuing accommodation bills of purchases as per the information supplied by the Sales Tax Department. It is clear that in the case of the assessee the addition was made on estimation basis therefore following the decision of ITAT as referred supra we consider that penalty levied in the case of the assessee on estimated addition is not sustainable. Therefore, the penalty levied is deleted. Accordingly, both the grounds of appeal of the assessee are allowed. 7. The appeal of the assessee is allowed. ITA No. 4403/Mum/2023 (AY: 2010-11) 8. Since we have adjudicated the similar issue on identical facts vide ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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