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2021 (2) TMI 1014 - ITAT MUMBAIPenalty levied u/s. 271(1)(c) - Bogus purchases - information received from DGIT (Inv.,), Mumbai that assessee has received accommodation entries from M/s. Vitraj Traders Impex without making any purchases but made purchases only in grey market - AO estimated the profit element from non-genuine purchases at 12.5% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5%. See SHRI DEEPAK GOGRI VERSUS THE INCOME TAX OFFICER, WARD 25 (3) (2) , MUMBAI [2017 (11) TMI 1857 - ITAT MUMBAI] As decided in AERO TRADERS (P) LTD. [2010 (1) TMI 32 - DELHI HIGH COURT] estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In the case on hand the Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year. Grounds raised by the revenue are rejected.
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