TaxTMI 
TaxTMI 
2021 (9) TMI 838
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....ome-tax Act, 1961 (hereinafter 'the Act'). The penalty was by Income Tax Officer, Ward 32(1)(4), Mumbai for Assessment Year 2010-11 vide even date 08.03.2018 under section 271(1)(c) of the Act. 2. The only common issue in this appeal of Revenue is against the order of CIT(A) deleting the levy of penalty on estimated income in regard to estimation of profit on bogus purchases. For this, Revenue has raised following grounds:- "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the penalty levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961, of Rs. 89,341/- without appreciating the facts that the Assessing Officer has correctly held that the assessee has failed to substanti....
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....126/-. The assessee has not challenged the estimation made by CIT(A) and accepted the addition. The AO initiated the penalty proceedings under section 271(1)(c) of the Act and accordingly, show cause notice was issued to the assessee as to why the penalty under section 271(1)(c) of the Act be not levied for furnishing of inaccurate particulars of income on the profit element of the bogus purchases i.e. Rs.2,89,126/-. The AO levied the penalty at the rate of 100% for furnishing of inaccurate particulars of income and levied the penalty amounting to Rs.89,341/-. Aggrieved, assessee preferred the appeal before CIT(A), who deleted the penalty by observing that the quantum addition was based on estimate and once estimate addition was made, penal....
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....med by the assessee under the head "Provision for obsolescence of inventory" was Rs. 35,575. While the Assessing Officer disallowed the entire amount, the Commissioner of Income-tax (Appeals) reduced the disallowance to 25 per cent. thereof, amounting to Rs. 8,894. The said disallowance has been affirmed by the Income-tax Appellate Tribunal and the High Court. 7. The Tribunal, while dealing with the question of penalty under section 271(1)(c) on the ground of obsolescence, has held as under (page 801 of 10 ITR (Trib) : "We have heard both the parties and have carefully gone through the orders of the authorities below. It is not in dispute that disallowance has been made by the Revenue only to the extent of 25 per cent. of the total cl....