TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 652
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....actually sold any goods to the company. They have merely issued sale bills to the company. On receipt of the cheques towards the sale, the same was deposited in bank accounts and they only retained ½ % of the amount as their commission and the balance amount was returned in cash to the assessee company. They categorically stated that actually no goods were ever supplied to the assessee. Sales tax numbers given on their bills are either not correct or the same has been cancelled subsequently. Therefore, the Assessing Officer made addition of the aforesaid amount to the income of the assessee. 5. On appeal, the Ld. CIT(A) deleted the addition. While doing so, he observed that the addition made by the Assessing Officer in respect of the alleged bogus purchases were made in haste without establishing that the assessee could have produced the materials without such purchases for which the assessee has realized sale price of Rs. 1,30,75,391/-. Naturally, it cannot be a case that the assessee has not at all received any goods from the above parties. He observed that as has been held in the case of Rasiklal K. Parikh and Company, Ahmedabad 'A' Bench of the Tribunal in ITA No. 1654,....
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....s, but maybe the route is a bit circuitous. Accordingly, he held that resorting to the purchases from the gray market, the assessee had saved some money but he claimed higher amount of purchase amount in the books. In his view, the assessee must have saved around 3% in the given line of business of the assessee. He, therefore, held that it would not be proper that 3% of the alleged bogus purchases should only be added as profits to the income of the appellant and the commission paid to the seven parties should be reduced from such profits. He observed that 3% of the alleged purchases of Rs. 27,41,185/- would come to Rs. 82,235/-, ½ % of such purchases is Rs. 13,706/- and the balance amount liable for addition was Rs. 68,529/-. Accordingly, he sustained addition for Rs. 68,529/- and allowed relief of Rs. 26,72,656/- to the assessee. 6. Being aggrieved by the said order of the Ld. CIT(A), the assessee filed appeal before the Tribunal. 7. The Tribunal reversed the order of the CIT(A) and restored back the order of the Assessing Officer. The Tribunal in ITA No. 1823/Ahd/2000 order dated 30.12.2005 held as under: &nb....
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....ir commission. The Assessing Officer further noted that the addition made was sustained by the Tribunal in further appeal filed by the Revenue against order of the CIT(A). He, therefore, held that the assessee has furnished inaccurate particulars of his income in concealment of true income and was liable to penalty and levied minimum penalty of 100% of the amount of the tax sought to be evaded which worked out to Rs. 11,78,752/-. 9. The Ld. CIT(A) deleted the levy of penalty on the ground that against the order of the Tribunal, the assessee preferred appeal to the Hon'ble Gujarat High Court who admitted the assessee's appeal by an order dated 11.12.2006 by admitting following substantial questions of law: "(i) Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in disallowing the purchase expenditure amounting to Rs. 26,72,656/- by treating the same as bogus when admittedly corresponding sales against these very purchases have been offered and accepted for tax? (ii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal....
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....aid clause (c) of Subsection (1) of Section 271 of the Act. In other words, unless there is any indication in the order of admission passed by the High Court, simply because a tax appeal is admitted would not give rise to the presumption that the issue is debatable and therefore, penalty should be deleted. The Ld. DR therefore submitted that the order of the CIT(A) was against the decision of the jurisdictional High Court as the penalty levied by the Assessing Officer was deleted by him only on the ground that quantum appeal filed by the assessee has been admitted by the Hon'ble High Court and substantial question of law has been formulated on it and therefore, the issue was not frivolous or mala fide. 12. On the other hand, the Ld. AR of the assessee submitted that he is not supporting the order of the CIT(A) on the ground that quantum appeal of the assessee was admitted by the Hon'ble High Court, therefore the penalty was liable to be dismissed. He submitted that on merits of the case, Ld. CIT(A) in the quantum appeal has given a categorical finding that the assessee has maintained stock register wherein the purchases are entered and consumption is shown of purchases of raw mate....
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.... pointed out the recent decision of the Hon'ble Gujarat High Court in the case of CIT Vs. Prakash Vyas in Tax Appeal No. 606 of 2010, order dated 15.11.2011 wherein Hon'ble High Court has held as under: "11. We are of the opinion that the Tribunal erred in deleting the penalty on this sole ground. Admission of a Tax Appeal by the High Court, in majority cases, is ex-parte and without recording even prima facie reasons. Whether ex-parte or after by-parte hearing, unless some other intention clearly emerges from the order itself, admission of a Tax Appeal by the High Court only indicates the Court's opinion that the issue presented before it required further consideration. It is an indication of the opinion of the High Court that there is a prima facie case made out and questions are required to be decided after admission. Mere admission of an appeal by the High Court cannot without there being anything further, be an indication that the issue is debatable one so as to delete the penalty under Section 271(1)(c) of the Act even if there are independent grounds and reasons to believe that the assessee's case would fall under the mischief envisaged in the sai....