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2019 (10) TMI 989 - AT - Income TaxAddition on account of unverifiable purchases - CIT-A deleted the addition - HELD THAT:- After considering the orders of the A.O. and submission of the assessee, the ld. CIT(A) has directed to compute the income on the basis of 0.25% on total turnover and no benefit of any expenditure would be allowed. Assessee has relied in the case of Arman Fashion Pvt. Ltd. v. ITO Ward 1(1) Surat [2013 (6) TMI 543 - ITAT AHMEDABAD] wherein net profit was estimated at 0.5% of turnover. Special Bench in the case of Manoj Agarwal v. DCIT [2008 (7) TMI 446 - ITAT DELHI-A] has estimated commission income at 0.50% for giving accommodation entries by holding the CIT (A) was justified in estimating net commission at 0.355 after allowing 0.15% for expenses. Therefore, we find that the issue is covered in favour of the assessee hence, following same we are not inclined to interfere with the order of Ld. CIT (A) hence, same is upheld. This ground is dismissed. Addition of undisclosed income from interest - HELD THAT:- We find that the interest received was duly reflected in the books of accounts of Arpit Jewels (a sister concern of the assessee) which has been duly verified by the Ld. CIT (A). In view of this matter, we do not find any infirmity in the order of CIT (A), accordingly, same is upheld. This ground of appeal is therefore, dismissed. Penalty levied u/s 271(1)(c) - HELD THAT:- As decided in FORTUNE TECHNOCOMPS (P) LTD. [2016 (5) TMI 859 - DELHI HIGH COURT] Once the assessment order of the AO in the quantum proceedings was altered by the CIT(A) in a significant way, the very basis of initiation of the penalty proceedings was rendered non-existent. The AO could not have thereafter continued the penalty proceedings on the basis of the same notice. Also, the Court concurs with the CIT(A) and the ITAT that once the finding of the AO on bogus purchases was set aside, it could not be said that there was any concealment of facts or furnishing of inaccurate particulars by the Assessee that warranted the imposition of penalty under Section 271(1)(c) of the Act. We find that the addition was made and income was estimated. Therefore, we are of the view that the penalty cannot be levied. - Decided in favour of assessee
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