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2018 (4) TMI 798

hen sales are not doubted hundred percent disallowance on the plank of bogus purchase cannot be done. This exposition comes from the in the case of Nikunj eximp enterprises (2013 (1) TMI 88 - BOMBAY HIGH COURT). - Just because assessee has filed a revised return of income and added the purchases as income, it can be presumed that there has been any concealment of income or furnishing of inaccurate particulars of income. This is more so when no enquiry whatsoever was made by the assessing officer himself in the assessment proceedings or in the penalty proceedings. We duly note that Hon’ble high courts and ITAT in a catena of cases have disapproved hundred percent addition in similar situation. Hence in our considered opinion in these fac .....

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nstruction of footbridges and carrying out other civil works for railways. The return of income declaring an income of ₹ 42,61,478/- was filed on 20/09/2010. The AO received information from the Sales Tax Authorities that the assessee was a beneficiary of the Hawala transactions. The AO, therefore, issued notice u/s 148 dated 27/05/2013. The assessee filed its revised return of income on 27/06/2013 in which the amount of the 'bogus purchases' amounting to ₹ 63,71,559/- was offered for taxation. The AO passed assessment order u/s 143(3) r.w.s. 147 on 30/09/2013 by adding the additional income surrendered by the assessee. Penalty proceedings u/s 271(l)(c) were also initiated. Now the AO vide order dated 19/03/2014 has impo .....

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hand Mittal, order dated 20.07.1999, c. Sir Shadilal Sugar and General Mills Ltd. v/s CIT [1987] 168 ITR 705. 5 The AO did not accept the assessee's explanation and imposed penalty u/s 271(1)(c) by observing that enquiries and investigation of the Sales Tax Department clearly revealed the racket involving Hawala dealers and beneficiaries. Further, the AO observed that the revised return filed by the assessee was filed after receiving notice u/s 148 was not a voluntary act on the part of the assessee. 6. Assessee made elaborate submissions before the learned CIT(A). Considering the assessee submissions learned CIT(A) deleted the penalty holding as under:- 9. I have carefully considered the appellant's submissions, the observations of .....

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ies or investigation to show that the appellant had furnished any inaccurate particulars of its income or had concealed any income. 10. The appellate authorities have in similar cases either deleted whole of the addition or have sustained the addition only partly i.e. only to the extent of 12.5% or 25%. Five such instances have been referred to by the appellant, as reproduced in preceding paragraphs, wherein the jurisdictional ITAT under similar circumstances has deleted the whole of the addition on account of such bogus purchases. In the appellant's case, the appellant itself surrendered the whole of the amount involved in such transactions by filing the revised return of income before furnishing of any inaccurate particulars of income .....

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ase as discussed above and relying upon the decisions of the jurisdictional ITAT as discussed above, it is held that the AO was not justified in imposing penalty in this case u/s 271(1)(c) as this is neither a case of concealment of income, nor a case of furnishing of inaccurate particulars of income. Therefore, the penalty imposed by the AO, in this case u/s 271(1)(c), amounting to ₹ 19,68,812/- is directed to be deleted. 7. Against above order revenue is in appeal before us. 8. We have heard both the counsel and perused the records. We find that in this case assessing officer had received information from the sales tax Department that assessee was recipient of purchase bills from hawala traders. When notice for reopening was issued .....

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