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2017 (8) TMI 1667 - AT - Income TaxPenalty u/s 271(1)(c) - Addition on account of non-genuine/bogus purchases - assessment was reopened on the basis of the information received from the DGIT (Investigation) that during the impugned assessment year, the assessee made purchases from the dealers, who were shown as hawala dealers in the website of the Sales tax Department of State of Maharashtra - HELD THAT:- AO on the basis of the gross profit percentage, disallowed 12.5% out of the total purchases made from the four such hawala dealers. Admittedly, the addition was made on estimation basis. As in the case of Ruchi Developers [2015 (6) TMI 1094 - ITAT AHMEDABAD] and Earthmoving Equipment Service Corporation [2017 (5) TMI 474 - ITAT MUMBAI], has taken a view that when a assessee made a bona fide claim coupled with documentary evidence but the same remained inconclusive for want of confirmation from the suppliers and the Assessing Officer has not made further inquiry to verify the correctness of the confirmation, the imposition of penalty is not justifiable. Thus, respectfully following the decisions of the co-ordinate Benches of this Tribunal, we find that the penalty made on estimated disallowance is not sustainable. As a result, the penalty levied is set aside and the appeal of the assessee is allowed.
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