TaxTMI 
TaxTMI 
2021 (6) TMI 657
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....n brief:- In the present case, he assessee for the year under consideration has filed its return of income on 28th September 2010, declaring total income of Rs. 15,86,890. The said return of income was processed under section 143(1) of the Act. Subsequently, the Assessing Officer received information from the Sales Tax Department indicating that the assessee is a beneficiary of accommodation entries provided by hawala operators through bogus purchase bills, and hence, the Assessing Officer re-opened the assessment under section 147 of the Act and made addition of Rs. 29,43,922, as 12.5% of the aggregate amount of Rs. 2,35,51,374. The assessee being aggrieved by the assessment order so passed by the Assessing Officer filed appeal before the ....
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.... (Appeals) deleting the penalty are as follows:- "5. Decision: I have carefully considered the facts of the case and submissions made by the assessee. It is seen from the facts available on record that the assessee is a Private Limited company and engaged in the business of manufacturing metals and chemicals and products therefore and supplying the same to Government. The assessee filed return of income on 28.09.2010 declaring total income of RS.15,86,890/-. Based on the information received from Sales-tax authorities in respect of the assessee company's involvement in the practice of evading taxes by showing bogus purchases from tainted parties, the case was re-opened for scrutiny on approval from higher authorities. After analys....
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....served that the addition has been made only on the basis of estimate made by the AO and it is settled position that when income is estimated, there can be no question of imposing penalty u/s 271(1)(c) of the Act. When an estimation is done, it becomes nearly debatable in respect of the rate/percentage of estimation and depends upon various parameters. The appellant cited several decisions in favour of it, on the same issue. 6.3 The Hon'ble IT AT, Mumbai deleted the penalty levied for furnishing inaccurate particulars of income in respect of bogus purchases in the case of Evergreen technologies Pvt Ltd Vs DCIT ITA No 1833/Mum/2016 dated 26.07.2017. Similarly, the Hon'ble Delhi High Court in case of CIT Vs Aero traders Pvt Ltd (2010....
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....issions of the learned Departmental Authorities and perused the material on record. We find The Assessing Officer imposed penalty under section 271(1)(c) of the Act on estimation basis without adducing any evidence on record for concealment of income. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad-hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. We find support from the series of decisions by different High Courts as well the decision of the Co-ordinate Benches of....