TMI Blog2021 (7) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... urts 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. 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 CIT(A) was indeed justified in deleting 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 estimation by the Assessing Officer do not call for initiation of penalty - Decided against revenue. - ITA no.5779/Mum./2019 - - - Dated:- 27-7-2021 - Shri Saktijit Dey, Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso shown income from the said business activity. Apart from this, there is an income from other sources as well. The Assessing Officer processed her return of income under section 143(1) of the Act. Meanwhile, the Assessing Officer received information from the Sales Tax Department, Mumbai, through DGIT (Inv.), Mumbai, regarding suspicious parties who are only providing accommodation entries without doing actual business and the assessee had entered into hawala transactions for purchases amounting to ₹ 22,65,857 from the following parties: Sl. no. Name of the Party Amount (`) 1. M/s. Deep Enterprises 8,21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and hence the assessee failed to prove the genuineness of the purchases from such hawala parties. He also observed that the books of account maintained by the assessee do not reflect the true and genuine picture of the financial states of the assessee. The Assessing Officer, based on the information received from the Sales Tax Department and the details submitted by the assessee came to the conclusion that these transactions were shown in order to inflate the expenses and bring down the profitability thereby avoiding the payment of tax and hence, he concluded that an amount of ₹ 22,65,857, as accounted in the books of account of the assessee through fictitious invoices in the name of three bogus parties represents unexplained expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported by valid documents. The appellant has also contended that it has not concealed any particulars of income nor has it furnished inaccurate particulars of income. The appellant has also contended that purchase was disallowed on ad-hoc basis which also suggested that concerned purchases were not bogus in nature. To buttress its claim, the appellant has relied on a number of case laws as mentioned in its submission. 6.2 The AG had basically estimated the profit on alleged bogus purchases being the profit element calculated by adopting peak credit and penalty u/s. 271(1)(c) of the Act was levied by the AO on such estimated profit. There is a plethora of court decisions which say that where additions are made on estimation, no pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that there being nothing on record that assessee's explanation lacked bona fides, penalty under section 271(1)c) could not be imposed on the basis of estimating sales and making addition by applying net profit rate-Same was rightly sustained by Tribunal and no substantial question of law arises 6. Considered the submissions of the learned Departmental Authorities 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 inaccur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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