TMI Blog2017 (5) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... nected, at least to some extent, with the business of the assessee. The assessee, during quantum proceedings itself filed revised computation of income after disallowing the alleged bogus purchases by citing the reason that the suppliers were not traceable during assessment proceedings. Merely because the suppliers could not be traced at the given address would not automatically lead to a conclusion that there was concealment of income or furnishing of inaccurate particulars by the assessee. The assessee made a claim which was bona fide and the same was coupled with documentary evidences but the same remained inconclusive for want of confirmation from the suppliers. Therefore, overall facts of the case do not justify imposition of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty u/s 271(1)(c) and consequently a notice u/s 274 was issued to the assessee which finally resulted into the imposition of impugned penalty vide AO penalty order dated 25/09/2013. The same was contested without any success before Ld. CIT(A) vide impugned order dated 04/08/2014 , against which the assessee is in appeal before us. 3. The Ld. Counsel for assessee, Dr. K. Shivram, while drawing our attention to the document placed in the paper book, assailed penalty order on legal grounds as well as on merits by contending that the show cause notice issued u/s 274 was defective as the relevant clause as applicable to the case of the assessee was not appropriately marked and no specific charge was mentioned therein for which the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The AO duly accepted the additions offered by the assessee without making any efforts to obtain confirmation from the alleged suppliers. In view of all these factors, the assessee stood good chance of succeeding in quantum appeal, however, it refrained from doing so only to buy peace of mind and avoid further litigation. Reliance was placed on following judicial pronouncements for various contentions:- i) CIT Vs. Reliance Petro products [2010 322 ITR 158 Supreme Court] ii) CIT Vs. Larsen Toubro Ltd. [2014 366 ITR 502 Bombay High Court] iii) CIT Vs. Sonal Construction Co. [55 taxmnn.com 425 Gujarat High Court] iv) M.G.Contractors Pvt. Ltd. Vs. DCIT [ITA Nos.7034 to 7038/Del/2014 19/09/2016 Delhi Tribunal] v) Anita Bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same ground. We find that the assessee was issued two show cause notices- one in the standard printed form u/s 274 dated 04/03/2013 as placed on Page No.-86 of the paper book and another dated 27/08/2013 by way of letter as placed in Page No. 92 of the paper book. We find that in the first notice, the relevant clause has not been ticked off and the second notice is simply a show cause notice. However, in the quantum order Ld. AO, after due deliberations, clearly initiated the penalty proceedings for furnishing of inaccurate particulars which shows due application of mind qua penalty proceedings. The penalty was finally levied on the same ground as well. Therefore, mere marking of relevant clause, in our opinion, on the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of defect pointed by the Ld. AR in the notice and therefore, the legal grounds raised are rejected. 7. On merits, Ld. AR has assailed imposition of penalty on various grounds and placed reliance on various judicial pronouncements which we have duly considered. We find that first of all Section 69C could not be applied to the facts of the case as the payments were through banking channels which were duly reflected in the books of accounts and therefore, there was no unexplained expenditure within the meaning of Section 69C incurred by the assessee. Further, we find that the assessee was in possession of purchase invoices and various other documentary evidences qua these purchases. A bare perusal of the purchase invoices reveals th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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