TMI Blog2021 (6) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. - Decided against revenue. - ITA No.6535/Mum./2019 - - - Dated:- 10-6-2021 - Shri S. Rifaur Rahman, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Revenue : Shri Gurbinder Singh For the Assessee : Ms. Forum Mehta ORDER PER S. RIFAUR RAHMAN, A.M. The appeal has been filed by the Revenue challenging the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Bench of the Tribunal in quantum proceedings granting partial relief to the assessee, the Assessing Officer issued notice dated 14th September 2018, under section 274 r/w section 271(1)(c) of the Act. In response, the assessee filed written submissions vide letter dated 14th September 2018, and the same was taken into consideration by the Assessing Officer during the penalty proceedings. The Assessing Officer observed that the assessee in its Profit Loss Account had shown purchases worth ₹ 3,56,16,927, from 25 parties. He received information from the DGIT (Inv.), Mumbai, and subsequently from the Sales Tax Department, Mumbai, regarding suspicious parties who are only providing accommodation entries without doing any actual busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidences in support of the purchases of ₹ 3/56/16/927 claimed to have been made from the alleged 25 hawala suppliers as well as having regard to the fact that no specific adverse material was brought out by the AO to show that the said purchases are bogus considering assessee s nature of business and overall facts of the case, the Hon'ble Tribunal directed to assess 8% of the amount of impugned purchases as income. The Honble ITAT held that where the assessee could not produce any evidence to substantiate actual delivery of material, the addition which could be made was to account for profit element embedded in these purchase transaction to factorize for profit element earned by the assessee against possible purchase of materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the appellant's case as mentioned above, it cannot be considered that the appellant has furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the Act. It is seen that in the case of Earthmoving Equipment Service Corporation Vs. ITO (supra), the Hon'ble ITAT, Mumbai deleted the penalty levied in respect of bogus purchases under similar facts and circumstances. It was held by the Hon'ble Tribunal that merely because the suppliers could not be traced at the given address would not automatically lead to a conclusion that there was concealment of income or furnishing of inaccurate particulars by the assessee. It was held that the assessee made a claim which was bona fide and the same was coupl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utomatically lead to a conclusion that there was concealment of income or furnishing of inaccurate particulars by the assessee. The assessee made a claim which was bona fide and the same was coupled with documentary evidences but the same remained inconclusive for want of confirmation from the suppliers. Therefore, overall facts of the case do not justify imposition of penalty on the aseessee and therefore, the same deserves to be deleted on merits of the case. All the cited case laws support the view taken by us in the matter. Therefore, by deleting the impugned penalties, we allow assessee s appeal. 4.5 Respectfully following the above mentioned decision of the Hon ble ITAT, Mumbai and keeping in view the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v/s Vision Research Management (P) Ltd., [2015] 63 taxmann.com 8 (Lucknow) (Trib.); iii) Prem Chand v/s ACIT, [2014] 52 taxmann.com 95 (Chandigarh) (Trib.); iv) CIT v/s PHI Seeds India Ltd., [2008] 301 ITR 0013 (Del); and v) Dilip N. Shroff v/s JCIT [2007] 291 ITR 519 (SC). 6. Even the learned Departmental Authorities has not brought any cogent material to prove otherwise warranting interference at the instance of the Revenue. In this view of the matter, we are of the considered view that the learned Commissioner (Appeals) was indeed justified in directing the Assessing Officer to delete the penalty, as there was no concealment of income on the part of the assessee have been proved by the Revenue and additions made on es ..... X X X X Extracts X X X X X X X X Extracts X X X X
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