9911796707
TMI Blog2017 (1) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to Rs. 15,10,274 without appreciating the fact that the addition in respect of bogus purchases was only after survey & scrutiny proceedings wherein in response to relevant queries assessee failed to explain and substantiate the genuineness of the transaction and thereby triggering default in terms of Explanation 1 to Section 271(1)(c)." 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the penalty levied u/s 271(1)(c) of the IT. Act amounting to Rs. 15,10,274 by holding that the same was based on addition which was made on estimation and adhoc basis, without appreciating the fact that, it was not the addition that was made on estimation and adhoc basis, but merely the computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The AO observed that the assessee has failed to produce the purchaser for verification and therefore the onus cast upon the assessee was not discharged and books of accounts as maintained and produced by the assessee could not be relied upon for the purpose of assessing the income as per the Act which were ultimately rejected u/s 145(3) of the Act and estimated and assessed the income by making an addition Rs. 45,76,587/- on adhoc basis @ 5% of total purchases Rs. 9,15,31,738/- u/s 143(3) r.w.s.144 of the Act at Rs. 87,10,500/-. The AO also initiated penalty proceedings u/s 271 (1)(c) of the Act for concealment of the particulars of income. 5. Though aggrieved by the addition made by the AO, the assessee in order to buy peace of mind, di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der before the first appellate authority and thus attained finality which showed that the assessee was in agreement with the findings of the AO. The AO has also given detailed findings that sufficient opportunities were also given to the assessee before rejecting the books of account u/s 145(3) of the Act and thereafter framed the assessment order u/s 143(3) r.w.s.144 of the Act however the ld. CIT(A) ignored all these aspects before deleting the penalty levied by the AO and therefore the order of CIT(A) was bad in law and should be reversed. 8. The ld. AR submitted before us that the AO has made the addition on the basis of information received by the AO from the Sales Tax Authorities and DDIT(Inv) V(I), Mumbai. The AR submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the bogus purchases o tax on the basis of information received from the third party i.e. State Sales Tax Department and DDIT(Inv) V(I), Mumbai which was not challenged by the assessee before the FAA and attained finality. Thereafter the AO levied penalty u/s 271(1)( c ) of the Act on the ground that the assessee did not challenge the assessment order and accepted additions so made thereby accepting the concealment of income . We find from the record that the additions as made by the AO was a pure estimate and nothing concrete as to bogus purchases were brought on records by the AO by making any further enquiries or investigation. In our view the penalty can not be imposed where the additions are made on estimate basis. The Tribunal has co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in the following cases : a) Ramesh Kumar and Co V/s ACIT in ITA No.2959/Mum/2014 (AY-2010-11) dated 28.11.2014; b) DCIT V/s Shri Rajeev G Kalathil in ITA No.6727/Mum/2012 (AY-2009-10) dated 20.8.2014; and c) Shri Ganpatraj A Sanghavi V/s ACIT in ITA No. 2826/Mum/2013 (AY-2009-10) dated 5.11.2014 In all the above said cases, the Co-ordinate Benches of the Tribunal has held that the AO was not justified in making the addition on the basis of statements given by the third parties before the Sales Tax Department, without conducting any other investigation. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing cases the Tribunal has taken similar view in some of the case that on the basis of third party evidence, addition made by the AO cannot be held as good law and deleted the addition which are as under: a) Ramesh Kumar and Co V/s ACIT in ITA No.2959/Mum/2014 (AY-2010-11) dated 28.11.2014; b) DCIT V/s Shri Rajeev G Kalathil in ITA No.6727/Mum/2012 (AY-2009-10) dated 20.8.2014; and c) Shri Ganpatraj A Sanghavi V/s ACIT in ITA No. 2826/Mum/2013 (AY-2009-10) dated 5.11.2014 10. In all the above said cases, the Co-ordinate Benches of the Tribunal has held that the AO was not justified in making the addition on the basis of statements given by the third parties before the Sales Tax Department, without conducting any other investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
