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TMI Blog2024 (11) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... is unsustainable under law. The aforesaid point is accordingly determined in favour of the assessee and against the revenue. - Shri Ms. Padmavathy S, Accountant Member And Shri Sunil Kumar Singh, Judicial Member For the Assessee : Shri. Haresh P. Shah For the Revenue : Shri. Ashok Kumar Ambastha - SR. AR ORDER PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 25.01.2024 passed in Appeal no. CIT(A), Thane-2/10147/2018-19 by the Ld. Commissioner of Income tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the CIT(A) ] u/s. 250 of the Income-Tax Act, 1961 [hereinafter referred to as Act ] for the Assessment year [A.Y.] 2010-11, wherein learned CIT(A) has confirmed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee u/s. 271(1)(C) of the Act is sustainable under law? 7. Learned AR has argued that the penalty cannot be levied merely by assessing the income on estimation basis. He has referred order dated 21.03.2023 passed by the co-ordinate bench of ITAT Mumbai in ITA No. 3885/MUM/2023 for (A.Y. 2009-10), Jatin enterprises V ACIT-19(2), Mumbai and order dated 22.07.2024 passed by the ITAT Mumbai bench in ITA No. 641/MUM/2024 for (A.Y. 2010-11), ITO-26(2)(1) V Sunil Bhagwandas Vorani (HUF) in support of his submissions. Learned AR has further referred order dated 28.02.2018 passed by the co-ordinate bench of this Tribunal in ITA No. 3707/MUM/2017 (A.Y. 2010-11), which is part of assessee s paper book at pages from 36 to 57 and submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 5. As is evident from para 5.6 of the Ld. AO's order, the Ld. CIT(A) has restricted the additions of @25% of non-verifiable purchases debited to the trading account, this shows that that Ld. CIT(A) while confirming the addition in quantum appeal has done so on estimate basis. The Hon'ble Karnataka High Court in the case of CIT Vs. Parasamal Babulal Jain, ITA No. 20 of 2006, order dated 14.09.2011, has held that the penalty u/s. 271(1)(c) is not attracted where addition made on estimate basis. The said order reads as under: Penalty cannot be levied on the disallowance of expenses made on estimate basis. If no facts are brought on record that any income has been concealed by the assessee or the assessee has furnished inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchases. However, learned CIT(A) has treated the bogus purchase amount debited by the assessee in its P L Account as concealment of particular of income. Learned CIT(A) has failed to appreciate the core spirit of the Tribunal s order that the restriction is based merely on the estimation basis only. Hence, in view of what has been held in above referred decisions, we hold that the penalty levied u/s. 271(1)(C) of the Act is unsustainable under law. The aforesaid point is accordingly determined in favour of the assessee and against the revenue. The assessing officer is directed to delete the penalty. 12. In the result, the appeal is allowed in above terms. The impugned order dated 25.01.2024 and penalty order dated 27.03.2018 are set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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