2022 (6) TMI 1068

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....In this appeal, assessee has raised following grounds: "Being aggrieved by the order of the Assessing Officer 17(3)(2), Mumbai, and learned Commissioner of Income Tax(Appeals) - 28 this appeal petition is filed on the following amongst other grounds of appeal, which it is prayed may be considered without prejudice to one another. 1. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) erred in partly upholding action of the Assessing Officer in levying penalty under section 271 (1) (c) of the Income-tax Act 1961 amounting to RS. 28,476 and directing him to rework penalty on the basis of sustained addition of RS. 92,153 being 10% of alleged bogus purchases of RS. 921,532 wi....

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..... 9,46,240. During the assessment proceedings, the Assessing Officer observed that most of the purchases made by the assessee were not from genuine parties and were bogus as per the information received from Sales Tax Department. Accordingly, Assessing Officer vide assessment order passed under section 143(3) of the Act made an addition of Rs. 9,21,532 under section 69C of the Act. In further appeal, the learned CIT(A) vide order dated 07/08/2014 dismissed the appeal filed by the assessee against the aforesaid order passed under section 143(3) of the Act. In quantum appeal against the aforesaid order passed by the learned CIT(A), Co-ordinate Bench of the Tribunal vide order dated 23/06/2017 passed in ITA No. 6429/Mum/2014 granted partial re....

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....bunal, in quantum appeal, at 10% of the impugned purchases. The Co-ordinate Bench of Tribunal further noted that the Assessing Officer has not made any independent enquiry nor any incriminating material was brought on record, except relying on the report of Sales Tax Department, Government of Maharashtra. Thus, it is evident that the entire addition has been made by the Assessing Officer only on the basis of estimation i.e. on the basis of difference of opinion and on an ad hoc basis. It is further pertinent to note that such addition was ultimately restricted to 10%. 9. We find that in respect of similar issue, the Co-ordinate Bench of Tribunal in Reliable Metal Industries vs ACIT, in ITA No.1261/Mum./ 2017, vide order dated 30/08/2017,....

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....e find that the penalty made on estimated disallowance is not sustainable. As a result, the penalty levied is set aside and the appeal of the assessee is allowed." 10. In another decision, the Co-ordinate Bench of Tribunal in Kamlesh Manohar Kanungo vs. DCIT, in ITA No. 139/Mum/2021, vide order dated 03/11/2021, after following various judicial precedents, decided similar issue, observing as under: "13. In the case on hand the learned AO and learned CIT(A) as well has only estimated the gross profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, respectfully following the above decisions, we direct the AO to delete ....