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2023 (8) TMI 585 - ITAT MUMBAIPenalty u/s 271(1)(c) - Estimation of income on bogus purchases - AO held that GP rate of 12.5% should be estimated to factor the suppressed profit on bogus purchases made - HELD THAT:- All the payments made have been through banking channels and there is no dispute regarding the quantitative statement of the purchases along with the bills and corresponding sales along with the copies of proceeding bills. None of these evidences or documents or the copies of sales bills or the quantitative details or the corresponding sales has been found to be incorrect or trading results have been disturbed. It is not a case that in the course of any enquiry conducted by the AO, parties have denied the transaction or it has been found that assessee has made these purchases outside the books. The sources of purchases are from the books and through banking channels and quantitative details of purchases have been accepted. Once the quantitative details of purchases and the corresponding quantitative sales have not been disturbed and has been accepted, then there cannot be any case for levy of penalty on account of alleged bogus purchases. Ultimately, the AO held that at the most there could be element of suppression of gross profit on the purchases, but such estimated addition alone cannot be the basis for levy penalty u/s. 271(1)(c), penalty proceedings being separate and distinct from the assessment proceedings and the assessee can explain on the basis of same material facts on record that he has not concealed any particulars of income or furnished any inaccurate particulars of income. The explanation of the Assessee and all the evidences filed before the authorities below have neither been rebutted nor has been found to be incorrect or assessee has failed to substantiate the explanation. Appeal of revenue dismissed.
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