TMI Blog2019 (6) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal in the case of M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT [ 2017 (6) TMI 514 - ITAT PUNE] has held that in the cases of purchases from suspicious dealers, addition of 10% of the bogus purchases over and above the GP declared by the assessee for the year should be made. In the instant case, the CIT (A) has restricted the addition to 10% of the alleged bogus purchases. Hence, the impugned order is modified; the addition is restricted to 10% of alleged bogus purchases over and above the GP declared by the assessee. - Decided partly in favour of assessee. Penalty u/s 271(1)(c) - defective notice - furnishing inaccurate particulars of income - HELD THAT:- A perusal of the order levying penalty dated 22.07.2015 reveals that though penalty was initiated for furnishing inaccurate particulars of income , the Assessing Officer invoked the other limb of section 271(1)(c) while levying penalty i.e. concealment of income . The manner in which penalty has been levied by the AO u/s.271(1)(c) clearly shows that there was ambiguity in the mind of Assessing Officer with regard to charge u/s.271(1)(c) that is to be invoked for levy of penalty. It is a well settle law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus parties. However, the Commissioner of Income Tax (Appeals) restricted the addition to 10% of the alleged bogus purchases i.e.8,59,887/- and deleted the remaining addition. Against the findings of the Commissioner of Income Tax (Appeals), the Revenue is in appeal before the Tribunal by raising following grounds: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-2, Nashik was justified in deleting the addition of ₹ 77,38,989/- made by the Assessing Officer on the issue of alleged bogus purchases? 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-2, Nashik was justified in ignoring the facts that the AO had brought on record credible evidence to prove that the purchases are not genuine? 3. The appellant prays leave to add, alter, clarify/amend and or withdraw any grounds of appeal as and when the occasion demands. 4. Shri Pankaj Garg representing the Department submitted that the assessee had failed to furnish supporting documents to show trail of goods. The assessee neither furnished invoices, octroi receipts and transport receipts nor th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of purchase transactions is on the assessee and he should have in first place furnished cogent evidences to prove the genuineness of the purchases and suppliers. No confirmations were filed by the assessee from suppliers. We also observe that at the time of assessment proceedings, the Assessing Officer has also not exercised his power to summon the Vendors u/s. 133(6) of the Act. If the assessee had failed to produce Vendors, the Assessing Officer could have summoned them. Thus, there was lack of effort from both the sides to bring the true colour of purchase transaction to fore. The Commissioner of Income Tax (Appeals) after considering entire facts came to the conclusion that it is a case of purchases from gray market and thereafter, bills have been procured from hawala operators. In the given facts, the entire purchases cannot be considered as bogus. At the same time, the assessee cannot be allowed to go scot free for not proving the genuineness of the purchases. The Co-ordinate Bench of the Tribunal in the case of M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT in ITA No. 795/PUN/2014 for the assessment year 2010-11 has held that in the cases of purchases from suspicious de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Samson Perinchery reported as 392 ITR 4 (Bom.) 11. On the other hand, the ld. DR vehemently defended the order of Assessing Officer dated 22.07.2015 in levying penalty u/s. 271(1)(c) of the Act and prayed for reversing the impugned order. 12. Both sides heard. Orders of the Authorities below perused. A perusal of assessment order shows that penalty proceedings u/s.271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income . The relevant extract of the assessment order whereby penalty proceedings were initiated reads as under: Further, for furnishing of inaccurate particulars of income, penalty proceeding u/s.271(1)(c) of the IT Act is separately initiated. A perusal of the order levying penalty dated 22.07.2015 reveals that though penalty was initiated for furnishing inaccurate particulars of income , the Assessing Officer invoked the other limb of section 271(1)(c) of the Act while levying penalty i.e. concealment of income . The relevant extract of the penalty order reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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