TaxTMI 
TaxTMI 
2025 (5) TMI 866
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. The brief facts as culled out from the proceeding before the lower authorities are that the assessee filed return of income for the A.Y 2009-10 on 26.09.2009, declaring total income of Rs. 2,79,090/- and the return was processed u/s 143(1) of the Act. The case was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act dated 07.03.2014 after recording the reasons. It is alleged that the assessee who is engaged in the business of trading in ferrous and nonferrous metals under the name and style of proprietorship concern "M/s Vijesh Metal (Ind)" and as per the information received from DGIT (Inv), Mumbai, the assessee was beneficiary of bogus purchases through bogus bills and conducting various non genuine transactions. Subsequ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accordingly restored to file of the AO with a direction to restrict the addition as regard the bogus / non genuine purchases by bringing the gross profit rate of such purchases at the same rate as that of the other genuine purchases. 4. In the penalty proceedings the AO vide order dated 29.03.2019 passed u/s 271(1)(c) of the Act has imposed penalty of Rs. 4,78,270/- being 100% of the amount of the tax sought to be evaded by concealment of particulars of income of Rs. 15,47,800/- and also for furnishing inaccurate particulars of such income. The said order of imposing penalty was challenged before the Ld. CIT(A), who has confirmed the same by passing the impugned order, challenged in appeal before us. 5. Thus aggrieved by the order of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....23. For the sake of brevity we may refer order the ITA No. 3565/Mum/2023 (supra) and would like to refer relevant portion of the judgment extracted herein below: "7. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that it is a settled proposition of law that when addition has been made on estimate basis, no penalty can be levied u/s. 271(1)(c) of the Act. The Id. AR relied on the decision of the co-ordinate bench in the case of Mun Gems vs. Asst. CIT [2023] 108 ITR(T) 276 (Mum-Trib), M/s. V. K. Ispat & Alloys (in ITA No. 2326 & 2325/Mum/2022 ITA No. 3565/Mum/2023 (AY.2011-12) KP Sanghvi & Sons LLP vs. Asst. CIT vide order dated 24.01.2023 and Shri Poonam K. Prajapati vs. ITO (in ITA No.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....100% of the alleged purchase made from the above party. 10 The first appellate authority, on the other hand, in a appeal prayed by the assessee, restricted the addition to 5% of the alleged bogus purchase and made an addition of ITA No. 3565/Mum/202 3 (A.Y.2011-12) K P Sanghvi & Sons LLP vs. Asst. CIT Rs. 12,37,251/- as against the addition made by the ld. A.O. amounting to Rs. 2,47,45,023/-. The impugned penalty of Rs. 4,20,570/- was levied on the quantum of addition confirmed by the ld. CIT(A). 11. In the above factual matrix, the ld. AR had relied on the following decisions where the co-ordinate benches have held that the penalty u/s. 271(1)(c) of the Act cannot be levied, where addition has been made on estimate basis ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the addition is made on estimated basis. It is evident that there are plethora of other decisions by the Hon'ble High Court's and various benches of the tribunal which had held the said proposition. In the present case in hand, it is observed that the A.O. has made addition @ 2.58% + 3% on VAT which was restricted by the ld. CIT(A) to 2.58% of gross prof it on the bogus purchases made by the assessee with the hawala parties. This clearly indicates that the addition in assessee's case was made on estimated basis. 9. We are of view that the penalty u/s. 271(1)(c) of the Act cannot be levied where the addition is made on estimated basis. From the above observation and by respectfully following the above decisions, we here....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome. That is not the case of the Revenue either. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the s. 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The words are plain and simple. In order to expose the assessee to the penalty unless the case....