HITESH JAYANTILAL MODI (HUF),MUMBAI vs. INCOME TAX OFFICER- WARD 32(1)(5), MUMBAI

PER OM PRAKASH KANT, AM

This appeal has been preferred by the assessee against order dated 26.10.2023 passed by the Ld. Commissioner of Income-tax –
National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2009-10, in relation to penalty u/s 271(1)(c) of the Income-tax Act, 196
Officer.
2. The grounds rai
1. Under the confirming lev
Act, 1961 of R
2 1.1 Under confirming th particulars of Income Tax A 1.2 Under th appreciate the fact that, add u/s 271(1)(c) on estimate
3. We have heard the relevant material made addition in res
12.5% of the bogus p penalty proceedings inaccurate particular of the assessee, the A 30.03.2019. On furt said penalty. Before that addition has b relying the decision o
M/s S4 Interior in I
2009-10, the penalty
Hitesh
ITA

61 (in short ‘the Act’) levied by ised by the assessee are reprodu e facts and in law, the learned CIT(A) vying of penalty w/s 271(1(c) of the In Rs. 4,61,734/-.
the facts and in law, the learned CIT(A at the appellant is guilty of furnishing i f income liable for levy of penalty us 271( ct, 1961. he facts and in law, the learned CIT(A) e submissions made by the appellant an dition is made on estimate basis and n of the Act can be levied where addition basis.
rival submissions of the parti ls on record. In the case, the A spect of bogus purchases on es purchases amount and accordin s u/s 271(1)(c) of the Act rs of the income. After consider
Assessing Officer levied penalty v ther appeal, the Ld. CIT(A) also us, the Ld. counsel for the asse been made on estimate basis of Coordinate Bench of Tribuna
ITA No. 4422/Mum/2017 for a y is liable to be cancelled. We h Jayantilal Modi (HUF)
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A No. 3285/MUM/2024
y the Assessing uced as under:
) erred in ncome Tax
A) erred in inaccurate
1)(c) of the ) failed to nd also the no penalty n is made ies and perused
Assessing Officer stimate basis @
ngly initiated the for furnishing ring submission vide order dated o sustained the essee submitted and therefore, al in the case of assessment year find that in the said case, the Co-ord
Assessing Officer m merely in the nature disproved on the ba relevant finding of th
“7. We have advanced by in the backd admittedly it made an ad purchases. F authorities, it genuineness consideration produced by found by him that the add merely backe claim which w documentary aforesaid fac unproved pur the assessee, on the said ba our aforesaid
High Court of (ITA (L) No. 1
observed as u
"The i deletio
The Tr
Commi
Income can be equally does hypoth explan not ac reason case i
Hitesh
ITA dinate Bench of the Tribunal ha made addition on estimate ba of unproved claim and not a c asis of irrefutable documentary e Tribunal is reproduced as und further deliberated at length on the co the authorized representatives of both th drop of the merits of the case. We f is a case where the A.O had on an estim ddition of 12.5% of the value of the Further, on a perusal of the orders of t emerges that the A.O had declined to a and veracity of the purchase transactio n, for the reason, that the documentary the assessee to substantiate the same, to his satisfaction. We are of the conside dition made by the A.O on an estimate d by an unproved claim of the assessee, was disproved to the hilt on the basis of i evidence by the revenue. In the backd cts, it can safely be concluded that th rchases would justify an addition in the , however, no penalty under Sec. 271(1) asis could have been validly imposed. We d view is fortified by the judgment of th f Bombay in the case of CIT Vs. Upendra
1860 of 2009), dated 05.08.2009, where under:- issue involved in the appeal revolve n of penalty under Section 271(1)(c) of th ribunal has concurred with the view tak issioner of Income Tax (A). The Commis e Tax (A) has rightly taken a view that n e imposed if the facts and circumsta y consistent with the hypothesis that th not represent concealed income as hesis that it does. If the assessee nation which is unproved but not disprove ccepted but circumstances do not lea nable and positive inference that the a is false. The view taken by the Tribu h Jayantilal Modi (HUF)
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A No. 3285/MUM/2024
as held that the asis which was claim which was evidences. The der:
ontentions he parties, find, that mate basis unproved the lower accept the ons under y evidence were not ered view, e basis is and not a irrefutable rop of the hough the e hands of )(c) merely e find that he Hon'ble
V. Mithani ein it was es around he I.T. Act.
ken by the ssioner of no penalty ances are he amount with the gives an ed, ie. it is ad to the assessee's unal is a reason substa to costs
We are of the before us ha veracity of th aforementione evidence as w remain oblivio the purchase record certai parties, bank neither been therefore, the beyond the r
Section 271(1
Court by dis revenue in CI
(SLP) (Civil) upheld the or aforesaid cas of expenditure as concealme merely becau to the revenu
Sec. 271(1)(c) failed to dis documentary assessee of h parties, theref purchases, n validly impose
3.1 In the instant profit in respect of clinching material to on the part of the as Co-ordinate Bench o of the Ld. CIT(A) an Hitesh
ITA nable and possible view. The appeal is wi ance. same is dismissed in limine with no s."
e considered view, that the assessee in ad failed to substantiate the genuine he purchases claimed to have been made ed parties, by placing on record the doc was called for by the A.O. However, we ca ous of the fact that as the assessee had transactions under consideration, by p in documents viz. invoices, ledger ac k statements etc, the authenticity of w dislodged or disproved by the lower a e same in itself takes the case of the realm of the penal provisions contempla
1)(c). We further find that the Hon'ble smissing the 'Special leave Petition' (SL
IT-2 Lucknow Vs. U.P State Bridge Corpor
(2018) 97 Taxman.com 279 (SC), had rder of the Hon'ble High Court of Allahab se, the High Court had observed that whe re is neither found inaccurate, nor could b ent of income on the part of the asses use the said claim was not accepted or a ue, that by itself would not attract pena
). Now, in the case before us, as the rev sprove to the hilt on the basis of evidence, the authenticity of the clai having made purchases from the aforem efore, merely on the basis of the unprove no penalty under Sec. 271(1)(c) could h ed on the assessee.”
case, the Assessing Officer ha f bogus purchases without b o establish furnishing of inaccu ssessee. Therefore, following the f the Tribunal (supra), we set a nd cancel the penalty levied by h Jayantilal Modi (HUF)
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ithout any o order as n the case ness and e from the cumentary annot also evidenced placing on ccounts of which had authorities, assessee ated under Supreme
LP) of the ration Ltd.
d recently bad. In the ere a claim be viewed ssee, then acceptable alty under venue had clinching im of the mentioned d claim of have been s estimated the brining on any urate particulars e decision of the aside the finding y the Assessing

Officer. The ground allowed.
4. In the result, th
Order pronoun (RAJ KUMAR C
JUDICIAL M
Mumbai;
Dated: 18/02/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

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Hitesh
ITA s of appeal of the assessee he appeal of the assessee is allow ced in the open Court on 18/0
/-
S
CHAUHAN)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu h Jayantilal Modi (HUF)
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A No. 3285/MUM/2024
are accordingly wed.
02/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai