TMI Blog2021 (7) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... nd additions made on estimation by the Assessing Officer do not call for initiation of penalty. Consequently, we uphold the order passed by the learned CIT(A) by dismissing the grounds of appeal raised by the Revenue. - ITA no.5507/Mum./2019, ITA no.5508/Mum./2019 - - - Dated:- 27-7-2021 - Shri Saktijit Dey, Judicial Member, And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri T.S. Khalsa For the Assessee : Ms. Aarti Sathe ORDER PER S. RIFAUR RAHMAN, A.M. The present appeal preferred by the Revenue challenging the impugned order dated 30th May 2019, passed by the learned CIT(A) 16, Mumbai, deleting the penalty ₹ 55,000, for the A.Y. 2009 10, and ₹ 1,56,000, for the A.Y. 2011 12, imposed under section 271(1)(c) of the Income Tax Act, 1961 (for short the Act ) by the Assessing Officer. 2. Since both these appeals pertain to the same assessee involving common issue, except variation in figures, which arose out of identical set of facts and circumstances, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. However, in order to understand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as furnished inaccurate particulars of income as the appellant company has truly disclose the purchase transaction before the Revenue authorities. Considering these facts I tend to agree with the appellant's contention. 6,1.3 In support of my view, I would like to place reliance on decision of Hon'ble jurisdictional ITAT in the case of Dcit 24(2), Mumbai vs Unisynth Chemicals 5967/MUM/2014,held that:- From a perusal of the finding of the CIT(A) in the impugned order it is seen that the addition of ₹ 47,04,9601-, on the basis of which penalty under section 271 (1)(c) of the Act was levied by the Assessing Officer, was on account of undisclosed income on account of bogus purchases and sales. On an appreciation of the material on record we are inclined to concur with the view of the CIT(A) that the explanation put-forth by the appeli ant in the penalty proceedings was a plausible one, inasmuch as, the circumstances on which the additional income was offered was because the disputed parties with whom these transactions were made were non- cooperative and the appellant having no control over those parties was, therefore, not able to substantiate its claim with n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the particulars of the income of the appellant. Secondly, the appellant must have furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1)(c) would embrace the detail of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the appellant cannot be held guilty of furnishing inaccurate particulars. In order to expose the appellant to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the appellant, because that is the only document where the appellant can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the appellant in its return are found to be incorrect or erroneous or false there is no qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional ITAT in the case of Deepak Gogri, Mumbai vs ITO 25(3)(2) 1396/MUM/2017 In so far as the penalty levied on estimation of profit element on purchases is concerned, we are of the view that Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases. Assessing Officer based on the decision of the Hon ble Gujarat High Court in the case of CIT v. Simit P. Seth (356 ITR 4511 estimated the profit element in such purchases at 12.5% and by reducing the Gross Profit already declared by the assessee. In the circumstances, we hold that there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation. Coming to the interest, the assessee furnished complete details in the return of income and made a claim and simply because the claim is denied and cannot lead to furnishing of inaccurate particulars or concealment of income. No allegation by Assessing Officer that the assessee failed to disclose the ITA.No.1396/ MUIVJ/2017 (A.Y: 2011-12) Shri Deepak Gogri particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 55,000, which is not sustainable in the eyes of law, hence ordered to be deleted. Consequently, the appeal filed by the appellant is hereby allowed. 5. The Revenue being aggrieved with the aforesaid order of the learned CIT(A) for deleting the penalty, filed appeal before the Tribunal. 6. Considered the rival submissions and perused the material on record. As it appears, the Assessing Officer imposed penalty under section 271(1)(c) of the Act on ad hoc basis without adducing any evidence on record for concealment of income. 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. We find support from the series of decisions by different High Courts as well the decision of the Co ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law. In support of this contention, fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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