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2022 (6) TMI 1359 - AT - Income TaxPenalty levied u/s 271(1)(c) - bogus purchases - AO made estimated addition of 12.5% of bogus purchases - HELD THAT:- Undisputedly, the additions made on account of bogus purchases were partially confirmed by the Tribunal. The assessee failed to discharge its onus in proving genuineness of the purchases and dealers. During assessment proceedings, the addition was made on estimation @ 12.5%. In first appeal, the addition was restricted to 3% and on further appeal to the Tribunal by the Revenue, the addition was enhanced to 6%. The entire addition right from assessment stage to the Tribunal was merely on estimations. There is no definite finding on the quantum of concealment of income. It is an accepted legal position that penalty u/s 271(1)(c) of the Act levied on additions made merely on estimations is unsustainable. As in the case of CIT vs. Krishi Tyre Retreading and Rubber Industries [2014 (2) TMI 21 - RAJASTHAN HIGH COURT] has held that where addition is made purely on estimate basis, no penalty u/s. 271(1)(c) of the Act is leviable. Thus penalty levied u/s. 271(1)(c) of the Act on estimated addition has been held to be unsustainable. - Decided against revenue.
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