2024 (5) TMI 98 - AT - Income Tax

Penalty u/s. 271(1)(c) - bogus purchases or inflated purchases not supported by proper vouchers treated the same as concealed income - HELD THAT - In the present case before us the assessee is unable to prove a claim because the vouchers of purchases were self-made vouchers and this fact has been recorded by AO As noted that once these purchases are supported by self-made vouchers and the same are treated as bogus as held by the AO how the same is concealment of particulars of income leading to concealment of income the decision of Hon ble Supreme Court in the case of Suresh Chandra Mittal 2001 (6) TMI 63 - SC ORDER squarely applies to the facts of the case. Hence respectfully following the decision of Hon ble Supreme Court in the case of Suresh Chandra Mittal supra we delete the penalty and allow the appeal of assessee.

Summary

Issues involved:
The judgment involves the imposition of penalties u/s. 271(1)(c) of the Income Tax Act for the assessment years 2014-15 and 2015-16 based on concealment of income.

Assessment Year 2014-15:
The case involved the assessee, a partnership firm engaged in feed production for animals, where the Department discovered discrepancies in expenses related to maize purchases during a survey. The assessment was reopened under section 147 r.w.s 148 of the Act, leading to the partner voluntarily declaring additional income of Rs. 22,35,000. The AO initiated penalty proceedings u/s. 271(1)(c) for concealment of income, which was confirmed by the CIT(A) invoking Explanation 4 to section 271(1)(c). The CIT(A) dismissed the appeal, emphasizing that the income admitted post-survey cannot be considered voluntary disclosure, leading to the imposition of the penalty. The Tribunal, however, referred to a Supreme Court decision and ruled in favor of the assessee, stating that the self-made vouchers for purchases did not constitute concealment of income, ultimately deleting the penalty.

Assessment Year 2015-16:
The facts and circumstances of this assessment year were identical to the previous year. Following the same reasoning as in the assessment year 2014-15, the Tribunal deleted the penalty and allowed the appeal of the assessee in this year as well.