TMI Blog2019 (1) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty against the addition made on the basis of estimation of income by taking 25% of the unverifiable purchases which was reduced in the said case to 15% was found to be not sustainable. This view has been consistently taken even in other decisions - Decided in favour of assessee. - ITA No. 733/JP/2017 - - - Dated:- 7-1-2019 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Rohan Sogani Shri Rajiv Sogani (CA) For the Revenue : Shri P.P. Meena (JCIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 21/07/2017 of ld. CIT(A)-I, Jaipur arising from the penalty order passed U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act) for the A.Y. 2008-09. The assessee has raised following grounds of appeal: 1(a) In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of the ld. A.O. in imposing the penalty of ₹ 43,122/- U/s 271(1)(c) of the Income Tax Act, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the said penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 as well as decision dated 22/12/2016 in the case of Deepak Dalela Vs ITO in ITA No. 1027/JP/2013. The ld AR has also relied on the following decisions of this Tribunal: (i) ITA No. 668/JP/2016, Shri Hemant Srivastava Vs ITO order dated 08/01/2018. (ii) ITA No. 237/JP/2016, Smt. Sharmila Jain Vs ITO orde dated 08/01/2018 6. On the other hand, the ld DR has submitted that the addition was made by the Assessing Officer on the basis of the enquiry and also following the precedents on the issue and therefore, it is not the addition merely based on estimation. He has relied upon the orders of the authorities below. 7. We have considered the rival submissions as well as the relevant material on record. There is no dispute that while completing the assessment U/s 143(3) of the Act, the Assessing Officer rejected the books of account of the assessee U/s 145(3) of the Act and consequently the income in respect of unverifiable/bogus purchases was estimated @ 25% of such purchases. The said addition made by the Assessing Officer was restricted by the ld. CIT(A) to 7% to those purchases as against 25% addition made by the Assessing Officer. Thus, it is clear that the addition s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not sustainable. In the case of Shri Hemant Srivastava Vs ITO (supra), the Coordinate Bench has considered this issue in para 7 and 8 as under: 7. We have considered the rival submissions as well as relevant material on record. There is no dispute that the addition in question was made by the AO @ 25% of unverifiable purchases while completing the assessment u/s 143(3). There is no definite finding by the AO that the assessee has inflated the purchase to the extent of 25% but it was only estimation of the AO to make addition which was subsequently restricted by this Tribunal to 15% of unverifiable purchase. Thus even the addition in quantum proceedings attained the finality it is not based on the finding that the assessee has inflated the purchases and suppressed the income or claim of the assessee was absolutely bogus. The AO has only doubted the purchases from certain parties and made the addition only to the extent of 25% of purchases made from such parties instead of disallowing entire purchases from those parties. When the AO has not given any finding of bogus purchases then the disallowance made by the AO is only based on estimation which was restricted by this Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the books of account and estimated the trading addition on the basis that the assessee had not maintained sitewise account, no head-wise details of claimed purchases were furnished, no separate head of expenses was maintained, work in progress was not declared, some wages were shown outstanding without complete details of creditors, stock register was not maintained and misc. expenses on water transportation etc. were not verifiable and purchase vouchers of sand, steel, bajri etc. were self made etc. Assessee explained reasons for the above defects which were not accepted by the AO as not found satisfactory. The AO accordingly made estimation. The circumstances suggest that it may be just and proper case of making estimated trading addition but an inference therefrom cannot be drawn beyond doubt especially keeping in mind the nature of work in not maintaining those books and details supported with proper vouchers etc. that there was concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee to attract the penal provisions. In view of above discussion and keeping in mind the fact and circumstances of the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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