2021 (6) TMI 313

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..... ef facts of the case are that the assessee company filed its return of income for the assessment year under consideration declaring total income of Rs. 9,89,683/- and the same was processed u/s 143(1) 0f the Act. Subsequently, on the basis of information received from the Director General of Income Tax (Inv.) Mumbai, that the assessee had obtained bogus purchase bills amounting to Rs. 86,15,256/- from three hawala parties without actual delivery of goods, AO reopened the case of the assessee and completed the assessment u/s 143(3) r.w.s,147of the Act and determined the total income of the assessee at Rs. 20,66,590/- after making addition of 12.5% of the total amount of bogus purchases on estimation basis. On the basis of the said addition, .....

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..... s in question addition of 12.5% of the disputed purchases was made to the income of the assessee. Hence, the Ld. CIT(A) has wrongly deleted the penalty levied by the AO on the basis of the said addition. The Ld. DR further submitted that the impugned order passed by the Ld. CIT(A) may be set aside and the order passed by the AO may be restored. 7. We have perused the material available on record. The Ld. CIT(A) has deleted the penalty levied by the AO holding that penalty proceedings are different from the assessment proceedings and addition of income during assessment proceedings does not ipso facto make the assessee liable u/s 271(1)(c) of the Act. Under section 271(1)(c) of the Act, AO has power to impose penalty if he/she is satisfied .....

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..... ty levied u/s 271(1)(c) of the Act on the basis of addition on account of profit made on estimation basis, holding that the addition made on estimation basis does not amount to concealment of income or furnishing of inaccurate particulars of income. 9 In our considered view, findings of the Ld. CIT(A) are well reasoned and based on the decisions of the Tribunal discussed above. Hence, do not find any reason to interfere with the decision of the Ld. CIT(A). Accordingly, we dismiss the present appeal and uphold the decision of the Ld. CIT(A) and direct the AO to delete the penalty levied u/s 271(1)(c) 0f the Act. In the result, appeal filed by the revenue is dismissed. Order pronounced on 31/05/2021 under Rule 34 of the ITAT Rules.
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