TMI Blog2020 (11) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... he cases relied upon by the Ld. counsel for the assessee and the issues involved are identical, we do not find any reason to take a different view in this case. Hence, we decide this issue in favour of the assessee. Accordingly, we set aside the impugned order passed by the Ld. CIT(A) and direct the AO to delete the penalty levied/s 271(1)(c) - Decided in favour of assessee. - ITA No. 1958/MUM/2019 - - - Dated:- 8-6-2020 - Shri G. Manjunatha (AM) And Shri Ram Lal Negi (JM) For the Assessee : Ms. Dinkle Hariya (AR) For the Revenue : Shri Sandeep Raj ( CIT DR) ORDER PER RAM LAL NEGI, JM This appeal has been filed by the assessee against the order dated 20.02.2019 passed by the Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty levied by the AO. The assessee is in appeal before this Tribunal against the said order. 3. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- 1 Natural Justice 1.1 The Learned Commissioner of Income-tax (Appeals)-17, Mumbai [ Ld. CIT (A) ] erred in not granting proper, sufficient and adequate opportunity of being heard to the Appellant while framing the appellate order. 1.2 It is submitted that, in the facts and the circumstances of the case, and in law, the appellate order so framed be held as bad and illegal, as: (i) The same is framed in breach of the principles of natural justice, and (ii) The same is passed without application of mind to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT vs. Simit P. Seth 356 ITR 451(Guj) and the decisions of the various Benches of the Tribunal. The Ld. counsel further pointed out that since the Ld. CIT (A) has sustained the addition of 12.5% of the total amount of bogus purchases in quantum appeal on estimation basis, the Ld. CIT (A) ought to have deleted the penalty levied u/s 271 (1) (c) of the Act. The Ld. counsel relying on the decision of the ITAT Mumbai in the case of Sh. Ajay Loknath Lohia vs. ITO, ITA No. 2998/Mum/2017, AY 2009-10l, Sameer D. Punjabi, ITA No. 1564/M/2017 and ETCO Telecom Ltd. vs. ITO, ITA No. 5243/M/2012, Elcon Pipe and Fittings Pvt. Ltd. vs. ITO, ITA No. 496/Mum/2018, AY 2009-10, Shri Deepak Gogri vs. ITO, ITA No. 1396/Mum/2017, AY 2011-12, and Mohammed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases, never made by observations with regard to the incorrectness in details filed by the assessee to prove such purchases. The AO never disbelieved information filed by the assessee, but he proceeded on the basis of information received from sales-tax department to make additions. The AO has made such addition on adhoc basis by estimating gross profit on alleged bogus purchases. From these facts, it is very clear that the AO failed to make a case of deliberate attempt by the assessee to furnish inaccurate particulars of income. Therefore, we are of the considered view that mere disallowance of purchases on adhoc basis does not tantamount to willful furnishing inaccurate particulars of income within the meaning of section 271 (1) (c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that assessee had concealed the income to the above extent and accordingly, a penalty of ₹ 18,006/- was imposed. The penalty has since been affirmed by the CIT(A) also. 4. We find that the plea of the assessee before the lower authorities has been that the levy of penalty is not automatic and that the transactions of purchase effected from the four parties were well documented and the payments were also made through banking channels. After hearing the Ld. Departmental Representative, we find that there is no justification to levy the penalty under section 271(1)(c) of the Act, inasmuch as, it is a case of failure of the assessee to substantiate an entry of purchase in the books of account and it is not a case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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