TMI Blog2021 (2) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... authenticity of the aforesaid purchase transaction would justify an addition/disallowance to the said extent, however, the same by no means would on such standalone basis justify levy of penalty under Sec. 271(1)(c). If an assessee gives an explanation which is unproved but not disproved i.e though the same is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee‟s case is false, then, no penalty under Sec.271(1)(c) can justifiably be imposed. Our aforesaid view is supported by the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. Upendra Vs. Mithani [ 2009 (8) TMI 1159 - BOMBAY HIGH COURT] . Accordingly we are of a strong conviction that in the absence of documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act 1961 without appreciating that the notice initiating penalty under section 274 read with section 271(1)(c) was bad in law. 2. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) erred in upholding action of the Assessing Officer in imposing penalty under section 271(1)(c) of the Income-tax Act 1961 amounting to ₹ 76,000 being 100% of tax sought to be evaded on alleged concealed income on account of disallowing purchases amounting to ₹ 285,363/- without appreciating that the addition of alleged non-genuine purchases was made on a difference of opinion: and there was neither concealment of income nor filing of inaccurate of income, as the Appellant had fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also of no avail as the party could not be traced at the address given by the assessee. In the backdrop of the aforesaid facts the A.O directed the assessee to produce the aforementioned party and also to provide its latest address along with the details of goods purchased, copy of bills raised by the said party, freight invoices, octroi and transportation bills in respect of delivery of material from the said party and details of corresponding sales. As the assessee failed to furnish the documentary evidence substantiating receipt of material claimed to have been purchased from the aforementioned party, and also, could neither produce the party for necessary verification nor link the consumption of the materials with his production activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er authorities. It was submitted by the ld. D.R that as the assessee had failed to substantiate its claim of having purchased the goods under consideration, the A.O, thus, had rightly imposed the penalty under Sec. 271(1)(c). 8. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, it is a matter of fact borne from the record that the assessee in the course of the assessment proceedings had failed to substantiate the genuineness and veracity of its claim of having made purchases of ₹ 2,85,363/- from the aforementioned party, viz. M/s Arihant Enterprise. As the assessee had failed to discharge the onus and, thus, could not prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts of the assessee. 9. As observed by the A.O in his order passed under Sec.271(1)(c), dated 29.09.2016, the details filed by the assessee in his attempt to substantiate the genuineness of the impugned purchases were in the nature of secondary evidence, and the same not being primary evidence, thus, did not prove its claim of having purchased the goods from the aforementioned party. In our considered view, for the reason that the assessee could not substantiate the genuineness of the purchases claimed to have been made from the aforementioned party to the satisfaction of the A.O, the same, for the said reason was disallowed by him. However, we cannot remain oblivious of the fact that the A.O had at no stage rejected the book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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