TaxTMI 
TaxTMI 
2021 (2) TMI 544
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....n law, the Ld. CIT(A) was correct in deleting the penalty of Rs. 62,802/- levied u/s 271(1)(c) of the Act as the penalty was levied on quantum additions made on account of bogus purchases, without appreciating that the onus was on the assessee to establish the genuineness of such purchases by producing such parties before the Assessing Officer and the assessee failed to discharge his onus"? (2) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was correct in holding that the AO has estimated the income without appreciating that the A.O. has levied penalty. only after verifying the fact that the assessee evaded the taxes on quantum of additions made on account of bogus purchases and the assessee failed t....
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.... 57,299 4 27710642619V G.R. Trade Link 94,994 5 27820645517V V. M. Udyog 2,01,647 6 27870658730V Payal Enterprise 2,21,020 7 27710551730V MR Corporation 1,93,795 8 27720714054V Kumar Enterprises 2,569 9 27390623201V Shah Enterprise 5,57,006 Thereafter, the notices were given and after the reply of the assesse, the AO raised the addition to the extent of 12.5% of the bogus purchase in sum of Rs. 16,25,967/-. The penalty proceeding was initiated and after the notice, the penalty in sum of Rs. 62,802/- was levied. Feeling aggrieved, the assessee filed the present appeal before the CIT(Appeals) deleted the addition. The Revenue was not satisfied, therefore, filed the present appeal before us. 4. We have heard the argum....
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....t rate at 8 percent. Rejection of the books of account allowed the A. 0. to make the addition on estimate basis. When the addition is made on estimate basis, no penalty under Section 271 (1)(c) of the income Tax Act, can be imposed as per the ratio laid down in the case of Cl. T vs. ArjunPrasadAjit Kumar, (2008) 214 CTR (All) 355, where it was observed that: "Appeal (High Court)Substantial question of law Penalty under section 271 (l)(c CIT (A) deleted penalty under section 271(1)(c) on the ground that there being nothing on record that assesses's explanation lacked bone tides, penalty under section 271(1)(c) could not be imposed on the basis of estimating sales and making addition by applying net profit rate same was rightly sustaine....
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....there being are no findings of the AO that the details furnished by the appellant n his return are found to be inaccurate or erroneous of false. Accordingly, I delete the penalty of Rs. 62,802/- levied by the AO u/s 271(1)(c) of the Act and the grounds of appeal are Allowed." 5. On appraisal of the above mentioned finding, we find that the CIT(Appeals) has deleted the penalty on the basis of this fact when the profit was estimated then no penalty was leviable. The CIT(A) has relied upon the Hon'ble Allahabad High Court in the case of Naresh Chand Agrwal Vs. CIT 357 ITR 0514 (All) and the decision of the Hon'ble ITAT, Mumbai in the case of DCIT Cir 4(2)(2) Vs. M/s. Manoharmanak Alloys Pvt. Ltd. in ITA. No.5586/Mum/2015 dated 16.01.2017and t....