M/S ROMIL DIAM,MUMBAI vs. DCIT, CIRCLE-19(3), MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL “D” BENCH,
MUMBAI
BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
M/s Romil Diam
72-A, Atlas Apartment, 11,J
Mehta
Road,
Nepeansea
Road, Mumbai – 400006,
Maharashtra v/s.
बनाम
Deputy Commissioner of Income
Tax – 19(3), Room No. 513, 5th
Floor, Piramal Chamber, Lalbaug,
Mumbai – 400 012, Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAKFR7912A
Appellant/अपीलाथी
..
Respondent/प्रतिवादी
For Assessee :
Shri Sanjay R. Parikh, CA
For Revenue :
Shri Annavaran Kosuri, (Sr. AR)
Date of Hearing
17.09.2025
Date of Pronouncement
10.11.2025
आदेश / O R D E R
PER PRABHASH SHANKAR [A.M.] :-
The above captioned appeal has been preferred by the assessee pertaining to penalty order passed u/s 271(1)(c) of the Income-tax Act,
1961 [hereinafter referred to as “Act”] as passed by the Learned
Commissioner of Income-tax, (Appeals)/National Faceless Appeal Centre,
Delhi [hereinafter referred to as “CIT(A)”] for the Assessment Year 2014-
15. P a g e | 2
ITA No. 3472 Mum 2025
A.Y. 2014-15
M/s Romil Diam Mumbai
The grounds of the appeals are as under:- 1. The CIT (A), Mumbai erred in upholding 100% of penalty on the ad-hoc addition made on account of alleged bogus purchases u/s 271(1)(c) of the Income-tax Act 1961. 3. In this case, the assessee firm filed return declaring total income of Rs 71,39,320/-.Consequent to a search in the case of Sri Bhanwarlal Jain, an entry provider, the AO noticed that the assessee had taken accommodation entry of Rs 1,38,94,670/- in respect of M/s Nice Diamonds. The AO added 5% of the said transaction as profit margin on the said transaction which was subsequently enhanced to 8% by the ld.CIT(A).Consequent to the order of hon’ble ITAT, the addition was restricted to 3% of the alleged bogus purchase. The AO accordingly, imposed penalty of Rs 2,14,673/- on account of the addition finally sustained. The ld.CIT(A) upheld the addition. 3. In this regard, the ld.AR has raised a legal issue that the penalty order is invalid as the AO in the show cause notice u/s 274 of the Act did not strike off one of the two limbs i.e. either concealment of income or inaccurate particulars. Reliance was placed on various court decisions including that of hon’ble Bombay High Court on Md. Farhan A. Shaikh 125 taxmann.com 253 etc. On merits, it was contended that no penalty
P a g e | 3
ITA No. 3472 Mum 2025
A.Y. 2014-15
M/s Romil Diam Mumbai could be imposed on an estimated addition. Reliance was placed on Cola
Colour P.Ltd (Appeal no/.48 of 2022) Bombay High Court.
4. The ld.AR relied on the orders of authorities below.
5. On careful consideration of the above facts we find that the case is squarely covered in favour of the assessee by the hon’ble juri ictional
High Court order in Cola Colour P.Ltd (supra) which is fully applicable to the facts of the case. Accordingly, we hold that the appellate is liable to be set aside. We order accordingly, with a direction to the AO to delete the penalty.
6. In the result, above appeal of the assessee is allowed.
Order pronounced in the open court on 10.11.2025. SANDEEP GOSAIN
PRABHASH SHANKAR
(न्यातयक सदस्य /JUDICIAL MEMBER)
(लेखाकार सदस्य/ACCOUNTANT MEMBER)
Place: म ुंबई/Mumbai
दिन ुंक /Date 10.11.2025
Lubhna Shaikh / Steno
आदेश की प्रतितलतप अग्रेतिि/Copy of the Order forwarded to :
अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent.
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ITA No. 3472 Mum 2025
A.Y. 2014-15
M/s Romil Diam Mumbai
आयकर आयुक्त / CIT 4. विभागीय प्रविवनवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.