9911796707
TMI Blog2025 (4) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer and ITA No. 1068/Srt/2024 relates to consequential levy of penalty under Section 271(1)(c) of the Act. Since common facts and issues for consideration are involved for both the years under consideration, both appeals filed by the assessee are taken up together. We shall first deal with ITA No. 1062/Srt/2024 (A.Y. 2007-08) 2. The Department raised the following grounds of appeal: "a) On the facts and circumstances of the case and law the ld.CIT(A) has erred in deleting the addition of Rs. 9,64,13.991/- made on account of bogus purchases u/s 69A of the Act ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group entities which were engaged in pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case and taw, the ld. CIT(A) has erred not appreciating that the judgment of Calcutta High Court of in the case of PCIT vs. Premlata Tekriwal (143 taxmann.com 173) involving similar issue of purchase of bogus concern to suppress profits wherein the court held that "since it was established that expenditure was unexplained/bogus, entire amount of bogus expenditure was to be added to income of Assessee". f) Whether on the facts and circumstance of the case and in law, the Ld. CIT(A) has justified in restricting the addition to 6% of the total bogus purchases even though the AO has made 100% addition of bogus transaction amounting to Rs. 9,64,13,991/- made by the Assessee with the entry provider not appreciating that non-genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entities. On further investigation, the Assessing Officer observed that the such entities were not found to be operating from the addresses mentioned and were bogus entities. The Assessing Officer noted that despite issuance of several notices of hearing, the Assessing Officer did not cause appearance before the Assessing Officer. Accordingly, the Assessing Officer added a sum of Rs. 9,64,13,991/- with respect to various bogus accommodation entries received by the assessee from the following concerns which are tabulated below for ready reference: Name of the Entry Provider Amount (Rs.) Group Avi Exports 2,09,42,955/- Rajendra Jain Group Moulimani Impex Pvt. Ltd. 3,36,96,067/- Rajendra Jain Group Sparsh Exports Pvt. Ltd. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these observations, Ld. CIT(A) restricted the addition to only 5% of the purchases in view of the order passed by his predecessor for earlier years. 6. The Department is in appeal before us against the aforesaid order passed by Ld. CIT(A). 7. Before us, the Ld. D.R. placed reliance on the observations made by the Assessing Officer in the assessment order. 8. On going through the facts of the instant case we observe that while passing the order, Ld. CIT(A) has noted that even for subsequent years for A.Y. 2008-09 Ld. CIT(A) vide order dated 28.09.2018 has given substantial relief to the assessee by restricting the addition to only 5% of the purchases. Before us, the Ld. DR also submitted that Ld. CIT(A), while allowing relief to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in deleting the penalty levied by the AO u/s. 271(1)(c) of the Act of Rs. 3,24,52,950/- without appreciating the fact that the Assessing Officer has correctly held that the assessee has failed to substantiate the transactions claimed in its return of income thereby evaded taxes to that extent? d) Whether on the facts and circumstances of the case and law, the ld. CIT(A) has erred in not appreciating the fact that the act of assessee clearly falls within the ambit of provisions of Explanation-1 to section 271(1)(c) of the Act as the assessee had failed to offer an explanation or which was found by the A.O. to the false? e) On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 271(1)(c) is leviable on estimated additions which is the case here. The ITAT Mumbai has in a judgement, summed up as: Heard both the sides and perused the materials on record. It is undisputed fact that impugned penalty was levied only on estimated addition. The Assessing Officer had made addition of entire bogus purchases, however, did not doubt the sales made against such purchases. We observe that the Tribunals in various decisions have held that where sales are not disputed, entire alleged bogus purchases cannot be disallowed and only the gross profit on the alleged purchases to be disallowed." "After taking into consideration the various decisions of the Tribunal that no penalty under section 271(1)(c) is leviable on est ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
