ASSTT. CIT -121, MUMBAI vs. M/S PABAL HOUSING P. LTD., MUMBAI

आदेश / O R D E R PER M. BALAGANESH (A.M): These cross appeals in 151/Mum/2021 for A.Y.2013-14 arise out of the order by the ld. Commissioner of Income Tax

151/Mum/2021 M/s. Pabal Housing Pvt Ltd., (Appeals)-47, Mumbai in appeal No.CIT(A)-47-10049/2019-20-AY 2013- 14 dated 13/11/2020 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as Act).

ITA No.151/Mum/2021 (A.Y.2013-14) 2. The only issue involved in this assessee’s appeal is with regard to levy of penalty u/s.271(1)(c) of the Act in respect of addition confirmed @12.5% by this Tribunal on account of bogus purchases. 2.1. We have heard rival submissions and perused the materials available on record. It is not in dispute that the addition ultimately has been confirmed by this Tribunal on an estimated basis by estimating the profit @12.5% on the value of ingenuine purchases. The ld. CIT(A) had confirmed the levy of penalty on the said estimated addition. The law is now very well settled that no penalty is surviving on an estimated addition. We also find that the ld. AR placed on record the copy of Mumbai Tribunal dated 10/12/2020 in in the case of M/s. Pacific Ferromate Pvt. Ltd., wherein concealment penalty u/s.271(1)(c) of the Act was deleted on similar addition made on account of bogus purchases on an estimated basis. Respectfully following the same, we direct the ld. AO to delete the penalty u/s.271(1)(c) of the Act in respect of addition on account of bogus purchases. Accordingly, the grounds raised by the assessee are allowed.

3. In the result, appeal of the assessee is allowed.

4. With regard to the Revenue appeal, we find that Revenue had challenged the deletion of penalty on account of additions made in respect of unsecured loans u/s.68 of the Act and disallowance of interest

151/Mum/2021 M/s. Pabal Housing Pvt Ltd., paid on such unsecured loans. We find that the ld. CIT(A) had observed that this Tribunal in the quantum proceedings vide its order dated 03/05/2019 in assessee’s own case in to 2694 & 3226- 3229/Mum/2019 had deleted the quantum and that the ld. CIT(A) had placed reliance on the said Tribunal order by stating that once the quantum is deleted, the levy of penalty would have no legs to stand. The law is now very well settled that once the quantum addition is deleted, there will be no penalty on the said addition that would survive. Accordingly, we do not find any infirmity in the order of the ld. CIT(A) deleting the penalty. Accordingly, the grounds raised by the Revenue are dismissed.

5. In the result, appeal of the assessee is allowed and appeal of the Revenue is dismissed.

Order pronounced on 23/12 /2021 by way of proper mentioning in the notice board.

Sd/- Sd/- (AMARJIT SINGH) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 23/12/2021 KARUNA, sr.ps

151/Mum/2021 M/s. Pabal Housing Pvt Ltd.,