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2022 (6) TMI 665 - AT - Income TaxPenalty u/s 271(1)(c) - estimation of income on Disallowance of bogus purchases - HELD THAT:- We find that the Hon’ble ITAT, “SMC” Bench in [2019 (9) TMI 1648 - ITAT MUMBAI] have dealt with similar issue, more so particularly, in assessee’s own case and had ruled that when sales are not in doubt, then 100% disallowance for bogus purchases cannot be made and relied on Hon’ble jurisdictional High Court in Nikunj Eximp Enterprises Pvt Ltd. [2013 (1) TMI 88 - BOMBAY HIGH COURT] and Principal Commissioner of Income-tax vs M. Haji Adam & Co [2019 (2) TMI 1632 - BOMBAY HIGH COURT] We do not find any infirmity in aforementioned decision and thereby set aside the matter to the Assessing Officer with the direction to restrict the addition on gross profit rate of bogus purchases at the same rate as that of the genuine purchases after giving opportunity to the assessee to present its case. Further, we hold that levy of interest under section 234B and 234C are consequential and initiation of penalty under section 271(1(c) is premature.
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