TaxTMI 
TaxTMI 
2012 (5) TMI 750
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.... 9,51,780/-. The assessment was completed u/s 143(3) vide order dated 31.3.2005 and the total income was determined at ₹ 12,96,370/- after making additions on account of receipt of unaccounted job charges of ₹ 4,38,414/- and bogus purchases of ₹ 14,92,565/-. Against these two additions made by the Assessing Officer (AO), the assessee carried the matter in appeal before the Ld. CIT (A). CIT (A) vide his order dated 30-9-1996 gave partial relief to the assessee and it directed the deletion of the addition to the extent of ₹ 9,92,565/-. Before ITAT, Revenue contested the deletion of ₹ 9,92,565/- and the assessee contested the addition of ₹ 5 lacs. Hon'ble ITAT vide order dated 22.9.2005 dismissed the assesse....
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....t for the reasons that the mensrea ( even though not relevant for the department to establish) has been proved by the ITAT by way of above mentioned findings. Therefore, in view of the judgment of the Hon'ble Supreme Court in the case of Dharmendra Textiles and Processors and others 306 ITR 227 (SC), the penalty levied by the Assessing Officer on account of unaccounted job work of ₹ 5,50,000/- is confirmed. 4. As regards the second issue i.e. penalty on bogus purchases from :- 1. Mukesh MetalCorporation. ₹ 98,640/- 2. Pooja Enterprise. ₹ 5,37,025/- 3. S.R. Metal Corporation ₹ 8,56,900/- Rs.14,92,565/- The Hon'ble ITAT in para 29 of their order has mentioned that these Three parties not only accepted before t....
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....ctures or surmises basis and the AO has highly relied upon the assessment order only and he has not attempted to make out the case for levy of penalty u/s. 271(1)(c) of the Act. The addition of the job work income and the purchases has been made, after rejecting the book result under section 145 of the Act for which reference was made to para 1 of Page No.3 of the assessment order. It was therefore contended that since, section 145 of the Act has been applied by the Ld. A.O. and the additions/disallowances have been made on estimate basis, penalty under section 271(1)(c) of the Act cannot be imposed. With regard to penalty levied on the addition of the purchases, it was submitted that the Ld. CIT(A) has reduced the addition and the addition....
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....9, page 21 of ITAT order wherein it has observed that the three parties were examined by Excise authorities before whom they not only denied to have made any sales to the assessee but they also accepted before the AO that they did not make any sale to the Assessee. These parties also clarified before AO that they had also procured bogus bills to give colour of genuineness to the transaction. It was also stated by them that the payments received by cheque were repaid in cash to the assessee's representative. The assessee was also granted opportunity to cross examine the parties which was not availed of and it was only contended that statements given by sellers before Excise authorities were baseless. 7. We have heard the rival submissions c....