TaxTMI 
TaxTMI 
2021 (7) TMI 1194
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....ord. 3. Facts in brief:- The assessee filed its return of income for the year under consideration on 29th November 2013, declaring total income at Rs. 19,00,094. The Assessing Officer, on perusal of the record available before him, noticed that the assessee has made purchases to the tune of Rs. 2,57,29,670, from two parties. Meanwhile, the Assessing Officer received information from the Sales Tax Department, Mumbai, through DGIT (Inv.), Mumbai, a search and seizure action was conducted by the Sales Tax Department in case of Bhanwarlal Group, and found that the said group was engaged in the business of providing accommodation entries in the shape of bogus unsecured loans / bogus shares application / share capital money / bogus bills in short term and long term capital gain and such bogus entries were routed through the companies under its control. It was further noticed by the Investigation Wing that the assessee is one of the beneficiaries of accommodation entries from the said group to the tune of Rs. 2,57,29,670. Accordingly, the Assessing Officer assessed the income @ 12.5% of the non-genuine purchases based on the decision of the first appellate authority vide its order dated ....
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....ances 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 necessary material evidence. Therefore, the appellant was constrained in order to avoid lengthy litigation to offer the additional income, which was accepted as such the Assessing Officer. The Hon'ble Apex Court in the case of Mak Data P. Ltd. (2013) 358 ITR 593(SC) while considering the provisions of Explanation 1 to section 271(1)(c) of the Act observed that the general principles of law in respect of penalty for concealment of income, does not grant the appellant automatic immunity from penalty on account of surrender or M/s. Unisynth Chemicals voluntary disclosure of income. As per the provisions of Explanation-1 to section 271(1)(c) of the Act, the question is whether the appellant has offered any explanation for concealment of income or furnishing of inaccurate particulars of income. In the case own hand we find that the requirement laid down by the Hon'ble Court has been met by the appellant inasmuch as, as observed by th....
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....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 question of inviting the penalty under section 271(1)('c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate 13 ITA No.4549/Del.12011 particulars regarding the income of the appellant. Such a claim made in the return cannot amount to furnishing inaccurate particulars." 6.1.6 The Hon'ble ITAT in the case of Ws Ruchi Developers Vs Income Tax Officer (ITAT Ahmedabad) I.T.A. No. 3348/Ahd/2011, held that "Coming to the penalty appeal, the Tribunal found that the assessee has placed on record the letters addressed to ITO with account of the alleged bogus party. PAN is also written in case of LJmiya Traders and in case of Maruti Traders. The assessee has also placed on record the confirmations by the concerned parties. The AO made addition on the basis that the assessee failed to produce the parties. However, other details in the nature of PANs and confirmations of concerned pa....
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.... 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 particulars relating to its claim in the return of income. Thus we hold that there is no concealment of income or furnishing of inaccurate particulars of income. Thus we direct the Assessing Officer to delete the penalty levied u/s. 271(1)(c) of the Act." 4.1.8 I further reply on following decisions for my view that penalty cannot be levied on addition made on agreed basis. a) CIT v/s Suresh Chandra Mittals (2001) 251 ITR 9 (SC). b) CIT v/s Manjunatha Cotton and Ginning Factory (Ker. HC) 4.1.9 With the consideration of all the above judgements, it is clear that where appellant has failed to produce creditor parties in respect of alleged Bogus Purchases while he submitted all other details and evidences and additions been made, It was held that where explanation of the appellant has not been accepted by the Department, The levy of penalty is merely on disallowance of expenditure and not finding of concealment of any particulars or mala fide intention to reduce the ta....