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2014 (12) TMI 715 - AT - Income TaxDeletion of penalty u/s 271(1)(c) – Addition restricted on unexplained receipt against bogus purchases - CIT(A) was of the view that the books of accounts to be rejected and because of no positive act of concealment on the part of the assessee has been brought on record, the penalty u/s 271(1)(c) is not sustainable - Held that:- CIT(A) made addition of ₹ 10,00,000/- by enhancing the sale of the assessee by rejecting the books of account and such finding of the CIT(A) clearly shows that he has accepted the purchases shown by the assessee - the basis of levying of penalty by the AO has itself not been found sustainable – the same issue has been already decided in Harigopal Singh Vs. Commissioner of Income Tax [2002 (8) TMI 65 - PUNJAB AND HARYANA High Court] wherein it has been held that the provisions of section 271 (1 )(c) are not attracted – in order to attract section 271(1)(c), it is necessary that there must be concealment by the assessee of the particulars of his income or if he furnishes inaccurate particulars of such income - there had to be a positive act of concealment on the part of the assessee and the onus to prove that was on the department – here, no such positive act of concealment on the part of the assessee has been brought on the record and the addition sustained is only on estimated basis - the basis for levying of penalty by the AO u/s 271(1)(c) that the assessee is guilty of furnishing of inaccurate particulars of her income by showing bogus purchases is not found to be correct after the assessment order passed in this regard. The books of account of the assessee were initially rejected and the AO has made the additions under different heads and in appeal, the CIT(A) has deleted the additions made under the head unexplained cash credit and u/s 40A(3) of the Act on account of cash payment - under the head unexplained receipt against bogus purchases, the addition was made by the AO, but in appeal the CIT(A) has restricted it to ₹ 10 lakhs only on estimate basis - therefore, no positive act of concealment of income chargeable to tax has been brought out on record - since the addition was made on estimate basis, the penalty u/s 271(1)(c) is not leviable – thus, CIT(A) rightly held that penalty cannot be levied on estimated addition – Decided against revenue.
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