TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 817
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....ividual and is a proprietor of M/s. Namrta Paper Agencies. The assessee filed the return of income for AY 2007-08 on 21.08.2024 declaring a total income of Rs. 6,63,520/-. The case was reopened and the reassessment u/s. 143(3) r.w.s. 147 was completed on 27.03.2015 wherein the AO made an addition amounting to Rs. 53,56,525/- towards alleged bogus purchases from two parties. Aggrieved the assessee filed further appeal before the ld. CIT(A) who reduce the amount of addition to 12.5% of the alleged bogus purchases amounting to Rs. 6,69,566/-. The AO subsequently, initiated penalty proceedings u/s. 271(1)(c) to levy penalty of 100% on the tax that worked out to Rs. 2,27,584/-. 3. Aggrieved the assessee filed further appeal before the ld. CIT....
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....ong with the accompanying grounds of appeal. 6.2 The appellant filed appeal against the order of the AO dated 29.03.2019 raising as many as 03 grounds. Ground No.01 & 03 are general in nature and hence no separate pronouncement is required, whereas ground no. 2 is specific against the penalty imposed amounting to Rs. 2,27,584/- while passing the penalty order under section 271(1)(c) of the Income Tax Act,1961. In the assessment order passed u/s 143(3) r.w.s 147 of the I.T Act, addition of Rs. 53,56,525/- was made being the accommodation entries taken by the appellant during the F.Y. 2006-07 from the following entities: Sr. No. Name of the entities which provided accommodation entries TIN Amount 1 Bigwin P....
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....ine purchases (Rs. 53,56,525/-) which comes to Rs. 3,21,392/-only. 6.4 It is settled position that when the additions made in the assessment order, on the basis of which penalty for furnishing inaccurate particulars is levied, are deleted, there remains no basis at all for levying the penalty. Accordingly, no penalty can survive and the same is liable to be cancelled. In the case of K.C. Builders vs. ACIT [2004] 165 ITR 562 (SC), and several other courts of Law pronounced that the deletion of quantum addition would obviously result in deletion of penalty. Once the quantum itself has been deleted, then penalty levied under Section 271(1)(c) of the Act is unsustainable and does not survive. As the Ld. ITAT has restricted the....
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...., the addition made merely on an estimated gross profit cannot form the basis for levy of penalty under section 271(1)(c) of the Act. In this regard it is relevant to take note of the following observations of the coordinate bench in the case of Narayansingh J. Deora (supra) - 7. We have care fully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that the AO after rejecting the books of accounts estimated the assessee's income by applying 12% of the total contract receipt of Rs. 1,98, 75,956/- and estimated the assessee's income at Rs. 23, 87,869/-. On appeal, the ld. CIT(A) reduced the percentage of profit to 5% of the total contract receipt. On further ....
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....lars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the re turn must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return ....