TaxTMI 
TaxTMI 
2021 (7) TMI 877
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....sessment year 2010-11. 2. Brief facts are, the assessee for the year under consideration has filed its return of income on 14th October 2010, declaring total income of Rs. 26,07,300. The Assessing Officer completed the assessment determining total income at Rs. 51,31,980. During the assessment proceedings, the Assessing Officer found that the assessee had made purchases to the extent of Rs. 34,944 from M/s. Ami Traders and Rs. 27,98,877, from M/s. R.K. Traders, whose names appear on the website of Sales Tax Department in the list of suspicious dealers wherein the parties are marked as hawala dealers who are merely issuing bills to various parties without actuall purchase and sale of goods having taken place. The Assessing Officer also rece....
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....AO had added the 12.5% of the bogus purchases at Rs. 3,71,437/- to the total income of the assessee. The appellant did not contest the order of the A0. Subsequently, the A.O. passed the penalty order u/s 271 (1)(c) of the Act for furnishing inaccurate particulars of income and also for concealing the particulars of income by way of bogus claim of expenditure, levying a minimum leviable penalty of Rs. 2,22,860/- being 200% of the tax sought to be evaded. 6.2 The AO had added 12.5% bogus purchases and subsequently levied penalty u/s 271(1)(c) of the Act. There are a plethora of court decisions which say that where additions are made on estimation, no penalty u/s 271(1)(c) is leviable, there being no concealment of particulars of income or f....
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....fides, 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 sustained by Tribunal and no substantial question of law arises" On the similar set of facts the Hon'ble ITAT, Mumbai, has deleted penalty u/s 271(1)(c) of the Act in ITA no.5586/Mum./2015, dated 16.01.2017 in the case of DCIT, Cir. 4(2)(2) v/s M/s. Manohar Manak Alloys Pvt. Ltd. On the same lines, the Hon'ble ITAT, Mumbai in ITA No. 75191Mum/2013 dated 08.07.2015 in the case of Mls. Yashraj Films P. Ltd. vs. The A.C.I.T. Central Circle 29, Mumbai has deleted the penalty u/s. 271(1)(c) of the Act levied an addition made on estimation basis. Likewise, the Hon'ble ITAT, Mumba....
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....he quantum addition made by the Assessing Officer on account of bogus purchase under section 69C of the Act. It is now well settled that because the assessee has not contested the quantum addition made by the Assessing Officer, the penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income by the Assessing Officer is unsustainable in the eyes of law. We also 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 additio....