TaxTMI 
TaxTMI 
2026 (2) TMI 309
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...., without appreciating that the addition of Rs. 10,49,860 sustained in the quantum proceedings represents only an estimated profit element. The learned CIT A failed to appreciate the essence of the fact of the case that the impugned addition was itself an estimated figure and therefore could not form the foundation for levy of penalty. Penalty under section 271(1)(c) cannot be imposed WHARE the addition is based purely on estimation. 2. Without prejudice, the learned CIT A further erred in confirming the levy of penalty at 300 per cent of the tax sought to be evaded, which is excessive, arbitrary and wholly unjustified. Even assuming, without admitting, that penalty was leviable on the facts of the case, the imposition of the maximum penalty is unwarranted, disproportionate and contrary to the settled principles governing the exercise of discretion under section 271(1)(c). 3. In this case, addition of Rs. 83,98,884/- was made by the Assessing Officer in respect of certain purchases stated to be bogus in nature.The ld.CIT(A) in the subsequent quantum appeal, restricted the addition to 12.5% only and thus, sustaining the addition to Rs. 10,49,860/-. Subsequently, ITAT uph....
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....star Diamond in ITA No.1542/ Mum/ 2025 are extracted as below for the sake of brevity: "8. What is concealment of income or inaccurate particulars of such income as contemplated by Section 271(1)(c), has been explained by the Hon'ble Supreme Court in the case of the CIT Vs. Reliance Petro Products (P.) Ltd. as reported in 322 ITR 158 wherein it has been held as under: - "A glance at the provision of s. 271(1)(c) would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. 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 was fo....
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....not agree with the contention of the assessee and distinguished the case relied by Ld. AR including the ITAT Mumbai Benches cases. In this given background, it was argued before us by the Ld. AR that addition has been made on estimation basis, therefore penalty u/s 271(1)(c) cannot be levied. The Ld. AR has relied upon the recent order of Jurisdictional ITAT Mumbai Bench in the case of Atul Properties vs. ACIT Circle 24, Mumbai (ITA No. 4967/Mum/2024, 4968/Mum/2024 order dated 06.11.2024 also reported 2024 (11) TMI 366-ITAT Mumbai and one of us was Member of the Bench which decided this appeal and the para no. 5 and 5.1 containing the finding of the Tribunal which supports the contention of Ld. AR are extracted below:- 5.1. In the instant case, the AO has added 100% value of bogus purchases. However, the Ld.CIT(A) has restricted the addition to the extent of 12.5%, meaning thereby the addition has been sustained by the Ld.CIT(A) on estimated basis. The Hon'ble Rajasthan and Punjab & Haryana High Courts have expressed the view that the penalty u/s. 271(1)(c) of the Act is not leviable when the addition is made on estimation basis. Accordingly, following the above said decis....
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....annexure-B and link the purchase with sales supported by bills and vouchers and reflection in the stock register of its entry and exit item by item. The assessee was also asked to produce books of accounts, bills and vouchers for verification but could not link the purchases with that of corresponding sales. The assessee produced books of accounts for verification. However, the AR of the assessee vide his written submission dated 12.03.2015 sated that the assessee has already submitted purchase details alongwith correspondence sales and bills along with stock details. The assessee firmly believes that there are valid reasons for not treating purchases as fictitious and also believes that no addition on account of disallowance of purchase should be made. The assessee has request to consider the case amicably. Assessee plead for non-levy of penalty of prosecution as consent letter is given to buy peace of mind and avoid further litigation cost, since the assessee has submitted all the documentary evidences in connection with the purchases from the said dealers. Kindly consider the same." However, the assessing officer has not agreed with the submission of the assess....