TaxTMI 
TaxTMI 
2025 (5) TMI 1706
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....cts of the cases and the grounds taken up in the appeals are similar except variation in the amount, these appeals were heard together, and a common order is passed for the sake of convenience and brevity. ITA No. 2100/Mum/2025 is taken as the 'lead case'. 2. The grounds of appeal raised by the revenue in ITA No. 2100/Mum/2025 (AY.2009-10) are as under: "1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty levied of Rs. 3,91,799/- being @12.5% on alleged bogus purchases, by ignoring the fact that the Maharashtra Sales Tax Department thru DGIT (Investigation Wing). Mumbai has proved beyond doubt that M/s. Reliance Steel Traders and M/s. CR Enterprises, were paper companies....
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....he Ld. CIT(A) is right in deleting the penalty u/s 271(1)(c) of the Act, in view of the decision of the Hon'ble High Court Mumbai, in the case of Pr. Commissioner of Income-Tax-5, Mumbai Vs. Kanak Impex(India) Ltd (2025)172 Taxmann.com 283 (Bombay) 03.03.2025, wherein the decision of 100% addition has been allowed, by rejecting the ITAT's decision of estimating the profit rate @12.5% on bogus purchases and thereby impliedly grant deduction of such unexplained expenditure incurred u/s. 690 of the Act, even though the assessee failed to discharge its onus to prove the genuineness of alleged purchases and has offered no explanation of the sources of expenditure incurred on account of such purchases? 4. Whether on the facts and....
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....ecision of the Hon'ble Supreme court in case of Union of India Vs Dharmendra Textiles Processors & ors/306 ITR 277. wherein it was held that explanation appended to u/s. 271(1)(c) of the Act, entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return and that the said section has been enacted to provide for a remedy for loss of revenue? 8. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in directing the AO to delete the penalty levied, without appreciating judgment on the decision of Hon'ble Delhi High Court in the case of CIT Vs Atul Kumar Gupta in ITA No. 479/2014, which reinforces the Revenue Authority to i....
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....uring the re-assessment proceedings, the AO asked assessee to furnish details of purchases from the above hawala parties. He also required the assessee to produce the said parties for verifications. The assessee did not comply with the requirement of the AO. Hence, AO added the entire purchases of Rs. 1,01,43,657/- from the above two parties. He also initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income and thereby concealing particulars of income. The penalty proceedings were kept in abeyance as the assessee has filed appeal against the assessment order. On appeal by the assessee, the CIT(A) restricted the addition to 12.5% of the said purchases, i.e. Rs. 12,67,957/- and deleted the remainin....
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....similar facts and circumstances, the levy of penalty on ad hoc disallowance was deleted. In the said case, information was received from Sales Tax Department that the said assessee was one of the beneficiaries who had taken accommodation entries from hawala dealers. The AO made addition of the entire purchases which was restricted to 12.5% by the CIT(A) and ITAT. The AO subsequently levied penalty u/s 271(1)(c) of the Act. The ITAT deleted the penalty by observing that no penalty u/s 271(1)(c) of the Act is leviable on ad hoc disallowance. Since facts were similar, the penalty levied by the AO was deleted by the CIT(A). 5. Aggrieved by the order of CIT(A), the revenue filed appeal before the Tribunal. The learned Senior Departmental Repr....
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.... AO is liable to be deleted. 7. We have heard both the parties and perused the materials available on record. We have also deliberated upon the decisions relied upon by the parties. Though the revenue has raised 10 grounds of appeal, they are either inter-connected or are general in nature. Hence, the grounds are decided together in terms of the discussion made hereafter. The re-assessment order was passed u/s 143(3) r.w.s. 147 of the Act by disallowing 100% of the purchases of Rs. 1,01,43,657/- from M/s Reliance Steel Traders and M/s CR Enterprises. The disallowance was restricted to 12.5% of the impugned purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271....