2024 (6) TMI 25

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....ances of the case and in law, Ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c), though notice u/s 274 had been issued in mechanical manner without intimating the charge as to whether the penalty is proposed to be levied for 'Concealment of income' or "furnishing inaccurate particulars of income". 2.0 On facts and circumstances of the case and in law, CIT(A) erred in confirming the levy of penalty u/s 271(1)(c). though the initiation of penalty had been made in assessment order for dual charge of 'Concealment of income' and "furnishing inaccurate particulars of income". 3.0 On facts and circumstances of the case and in law, Ld.CIT(A) erred in confirming the penalty u/s 271(1)(c) of Rs. 22,80,490/- in respect of addition s....

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....ation entries of bogus purchases to assessee during AY 2007-08 from M/s Kunal Gems of Rs. 8,99,99,946/-, M/s Mohit International of Rs. 1,75,01,601/-, M/s Natasha Enterprises of Rs. 2,30,00,009/- and M/s New Planet Trading Co. Pvt. Ltd. of Rs. 49,99,980/-. Shri Praveen Jain, in his statement recorded u/s 132(4) of the Act, admitted that he manages and controls the business affairs of all the concerns where his employees are also shown as directors, partners and proprietors. The AO by taking the view that income of Rs. 13,55,01,536/- has escaped assessment in the hands of assessee for the year under consideration, reopened the case and notice u/s 148 was issued on 26.03.2014. The assessee in his written submission stated that entire sales ar....

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....d by AO which was partly confirmed by the Ld.CIT(A). He has filed paper book containing 75 pages. The Ld. AR submitted that no penalty can be imposed on addition based on estimation. He stated that AO had added @ 100% of the alleged bogus purchases which was reduced to 5% of net profit by the Ld.CIT(A). Subsequently, the addition was restricted to 5% of the bogus purchases by the Tribunal. The AO has levied penalty on the addition sustained by the Ld.CIT(A). However, the Ld.CIT(A) has restricted penalty on the addition to the extent sustained by the Tribunal. Therefore, the penalty was levied on estimated addition. Such penalties based on estimated addition is not liable to be sustained as held by this Co-ordinate Bench in the case of Yogen....