Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 819 - AT - Income TaxPenalty u/s 271(1)(c) - undisclosed income - bogus purchase - HELD THAT:- Assessee’s business being in the nature of dairy and vegetable, the assessee would not be knowing that whether income from dairy firm was liable to tax or not - during the assessment proceedings, the assessee offered this as undisclosed income which has been confirmed in appeal before the ld.CIT(A) and the issue has attained finality. On examination of the facts on hand, it is apparent that the claim was neither mala fide nor false. It was under bona fide belief that the income generated out of purchase and sales of dairy products are exempt from the income tax. Assessee in the assessment proceedings disclosed this fact and offered the same to tax. In these circumstances, the assessee fulfilled both the conditions to be outside the purview of Explanation (1) to Section 271(1)(c). In the present case, on account of bogus purchase, the ld.CIT(A) has restricted addition to ₹ 11,88,357/- from ₹ 43,53,429/- on estimate basis. Such an estimation is made without any concrete material but on adhoc basis. Hon’ble jurisdictional High Court in the case of CIT Vs. Valimkbhai H. Patel [2005 (7) TMI 35 - GUJARAT HIGH COURT] has held that where addition has been made on estimation basis, no penalty under section 271(1)(c) could be made qua such addition.
|