Tribunal upholds CIT(A) decision, dismisses Revenue's penalty appeals due to lack of conclusive evidence.

The Tribunal dismissed both appeals by Revenue, affirming the deletion of the penalty under section 271(1)(c) by CIT(A) based on the lack of conclusive evidence proving the purchases as bogus and the presence of doubt regarding the same.

---

---

Issues:
- Appeal against deletion of penalty under section 271(1)(c) of the Income-tax Act on account of bogus purchases.

Detailed Analysis:
1. The appeals by Revenue challenged the Commissioner of Income Tax (Appeals) order deleting the penalty under section 271(1)(c) of the Act related to bogus purchases for the assessment years 2009-10 and 2011-12.
2. The common issue in both appeals was the deletion of penalty by CIT(A) for the Assessing Officer's levy under section 271(1)(c) of the Act. The grounds raised by the appellant questioned the correctness of the deletion of penalty based on the genuineness of purchases and the alleged attempt to reduce profitability to avoid taxes.
3. The CIT(A) reduced the addition of unexplained expenditure related to bogus bills from hawala parties to 15% profit element, which was further reduced by ITAT to 3.5%. The penalty was imposed for furnishing inaccurate particulars of income by submitting bogus bills. However, CIT(A) deleted the penalty stating that the addition was made on an estimation basis, not conclusively proving the purchases as bogus.
4. CIT(A) relied on precedents and court decisions stating that where additions are made on estimation, no penalty under section 271(1)(c) is leviable as there is no concealment or furnishing of inaccurate particulars of income. The appellant had produced documentary evidence of purchases, payments, and stock tally before the Assessing Officer, creating doubt on the bogus nature of purchases.
5. The Tribunal upheld CIT(A)'s decision, emphasizing that once sales were not doubted, and documentary evidence was provided, the penalty for furnishing inaccurate particulars of income cannot be imposed. As there was doubt regarding the purchases, the penalty was rightly deleted by CIT(A).

In conclusion, the Tribunal dismissed both appeals by Revenue, affirming the deletion of the penalty under section 271(1)(c) by CIT(A) based on the lack of conclusive evidence proving the purchases as bogus and the presence of doubt regarding the same.

---