TMI Blog2022 (4) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... inable in the eyes of law. So appeal filed by the assessee is partly allowed and appeal filed by the Revenue is dismissed. Penalty levied u/s 271(1)(c) - When entire addition in this case is on estimation basis and at no point of time Revenue Authorities have reached the specific conclusion that the assessee has concealed the particulars of income or has furnished inaccurate particulars of income rather made the addition on the basis of information received from Sales Tax Department without conducting any independent enquiry as to the alleged bogus purchases, the penalty levied by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law. - ITA Nos. 1732/M/2021, 1733/M/2021, 290/M/2021 and 291/M/2021 - - - Dated:- 17-3-2022 - SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Radha Halbe, A.R. For the Respondents : B.K. Bagchi, D.R. ORDER Per Kuldip Singh , Judicial Member For the sake of brevity aforesaid cross appeals bearing identical question of law and facts are being disposed of by way of a composite order. 2. Appellant Shri Shailesh D. Thakare (hereinafter referred to as the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in law, the learned CIT(A) erred in sustaining the penalty of ₹ 2,58,886/- levied u/s. 271(1)(c) on the estimated profit addition of 25% on alleged bogus purchase. 4. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other. ITA No. 290/M/2021 (Revenue's appeal) 1. On the facts . in the circumstances of the case, and in law, the Ld. CIT(A) has erred in deleting the penalty by not appreciating the fact that the assessee failed to prove the genuineness of the alleged bogus purchases from the Hawala parties during the course of assessment as well as penalty proceedings. 2. On the facts . in the circumstances of the case, it is submitted that the penalty was levied for the additions made on the basis of information received from Law enforcement agency of the State Government of Maharashtra i.e. Sale Tax Department. 3. The Ld. CIT(A) while deleting the penalty has not appreciated the ratio laid down by the Hon'ble Supreme Court in the case of MAK DATA(P) LTD Vs CU [358 ITR 593 (SC)]. 4. It is humbly submitted that present appeal is be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for accommodation entries to the tune of ₹ 38,61,698/- as under: S. No. Name of the Party Amount of bill 1 Swastik Sales Agency Pvt. Ltd. 7,74,982/- 2 Navoday Trade Impex Pvt. Ltd. 9,40,358/- 3 Rajeshwari Trading Pvt. Ltd. 12,31,199/- 4 Elecon Impex Pvt. Ltd. 9,15,159/- Total 38,61,698/- 4. Consequently the Assessing Officer (AO) after recording reasons initiated the reopening under section 147 read with section 148 of the Act. Declining the contentions raised by the assessee that he has made genuine purchases, AO proceeded to add an amount of ₹ 38,61,698/- to the total income of the assessee and thereby framed the assessment at total income of ₹ 41,09,458/- under section 143(3) read with section 147 of the Act. 5. Assessee carried the matter before the Ld. CIT(A) who has restricted the additions to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not been disputed by the AO as well as the Ld. CIT(A) addition to the tune of 25% of the bogus purchases is not sustainable and relied upon the decision rendered by Hon'ble Bombay High Court in the case of Principal Commissioner of Income Tax vs. M/s. Mohommad Haji Adam Co. in Income Tax Appeal No. 1004 of 2016 ors. order dated 11.02.2019 and further contended that co-ordinate Benches of the Tribunal have taken uniform view that in such cases addition may be made up to 12.5% of the bogus purchases. In support of his arguments the Ld. A.R. for the assessee also relied upon the decision of Hon'ble Bombay High Court in case of CIT vs. Nikunj Eximp Enterprises (P) Ltd. (2013) 216 Taxman 171 (Bom.) 8. Hon'ble Bombay High Court in identical facts and circumstances of the case decided the issue in case of M/s. Mohommad Haji Adam Co. (supra) even after distinguishing the decision rendered by the Hon'ble Gujarat High Court in case of N.K. Industries Ltd. vs. Dy. CIT in Tax Appeal No. 240 of 2003 and connected appeals decided on 20.06.2016, also relied upon by the Revenue, held that when there is no discrepancy between the purchases shown by the assessee and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Tribunal by way of filing the present cross appeals. 14. Undisputedly, initially the AO has made addition of ₹ 38,61,698/- on the total amount of alleged bogus purchases made by the assessee during the year under assessment. It is also not in dispute that addition made by the AO has been restricted by the Ld. CIT(A) to the tune of ₹ 9,65,425/- i.e. @ 25% of the total bogus purchases. It is also not in dispute that now Tribunal vide order of even date has restricted the addition to the extent of 12.5% of the entire bogus purchases. 15. In the backdrop of the aforesaid undisputed facts the Ld. A.R. for the assessee contended that when the entire addition has been made on the basis of estimation penalty levied by the AO and sustained by the Ld. CIT(A) is not sustainable. Moreover, penalty in this case has been levied on the basis of information received from the Sales Tax Department and no independent enquiry has been made by the AO, hence, the penalty is not sustainable. Co-ordinate Bench of the Tribunal has also deleted the penalty in the identical facts and circumstances of the case by citing as DCIT vs. M/s. Toshvin Analytical Pvt. Ltd. in ITA No. 7505 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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