2025 (10) TMI 469

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.... levy of penalty of Rs. 6,96,096/- u/s. 271(1)(c) of the Income Tax Act, 1961 ("the Act"). 2. Briefly the facts of the case are that the assessee filed its return of income, declaring total income of Rs. 7,92,587/-. Subsequently, the case of the assessee was reopened on the basis of the information received from DGIT (Investigation), Mumbai that the assessee had obtained accommodation bills from bogus dealers in order to inflate the purchases and notice u/s. 148 of the Act was issued. Thereafter, after issuance of notices calling for the necessary information and documentation, the assessment order was passed u/s. 143(3) r.w.s. 147 of the Act, wherein the assessed income was determined at Rs. 5,38,54,780/-, after making various additions....

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....CIT(A) and the Ld.CIT(A) has since sustained the penalty and against the said order, the assessee is in appeal before us. 4. During the course of hearing, the Ld. AR drawn our reference to the order passed by the Co-ordinate Bench of the Tribunal in the quantum proceedings and submitted that the Co-ordinate Bench of the Tribunal has reduced the addition on account of bogus purchases from 100% made by the AO to 12.5% and, therefore, it is a clear case of estimation of income by way of disallowance of the purchases and, therefore, on such estimation, penalty cannot be levied and in support, reliance was placed on the decision of the Co-ordinate Bench of the Tribunal in the case of Mohammed Sharif vs. ITO in ITA No. 2408/Mum/2018, dt. 20-05....

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.... said finding has been upheld by the Tribunal and, therefore, it is a clear case of levy of penalty and which has been rightly confirmed by the Ld. CIT(A). 6. In his rejoinder, the assessee has submitted that the aforesaid decisions relied upon by the Ld.DR were rendered by the Hon'ble Bombay High Court in the context of quantum proceedings and not in the context of penalty proceedings. It was submitted that in the instant case, the Revenue has not challenged the order so passed by the Co-ordinate Bench of the Tribunal in the quantum proceedings and, therefore, the same has attained finality and our reference was again drawn to the order of the Co-ordinate Bench of the Tribunal in quantum proceedings and it was submitted that the Co-ordi....

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....he authorities below have rightly held the said transaction as bogus. We further notice that the authorities below have not rejected the sales of the assessee. As contended by the Ld. counsel, there can be no sales without any purchases. The facts and the circumstances of the case suggest that the assessee had purchased the material from grey market and evaded the applicable taxes. Therefore, addition to the extent of profit earned from such transaction and the applicable taxes evaded by the assessee is required to be made. The Hon'ble Gujarat High Court in CIT vs. Simit P. Seth 356 ITR 451(Guj) has upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases shown by the assessee holding that only profi....