GANESH VISHNU KHANOLKAR,MUMBAI vs. ACIT 26 (1), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

2. Upholding the penalty levied by the learned Assessing officer, being 100% of tax on the addition to income u/s 271(l)(c) of the Income Tax Act. 1961 when the copies of purchase invoices, corresponding sales invoices, quantitative details and proof of payment by account payee cheque for the purchase price have been provided and purchase has actually been made and is genuine.

3. Upholding the penalty levied by the learned Assessing officer, being 100% of tax on the addition to income u/s 271(l)(c) of the Income Tax Act. 1961 when in (act addition has been made on the basis of confession before sales tax officer and neither statement was recorded by the Assessing officer, nor copy of material relied upon furnished to appellant, nor opportunity given to the appellant to cross examine the panics who had made the confession statement, when the material has been used against the appellant.

4. Upholding the penalty levied by the learned Assessing officer, being 100% of tax on the addition to income u/s 271(1)(c) of the Income Tax Act. 1961 when in fact the addition is made on conjecture and no specific evidence has been filed to the effect that purchases are bogus /not genuine and very high pitched addition has been made exceeding double the profit margin which is erroneous. A.Y. 2011-12 5. Upholding the penalty levied by the learned Assessing officer, being 100% of tax on the addition to income u/s 271(1)(c) of the Income Tax Act,1961 when without giving proper opportunity when in fact the appellant could not reply as show cause notice for penalty was not received by the appellant.

3. The brief facts of the case are that the assessee filed his return of income on 29.09.2011 declaring total income to the tune of Rs.32,78,879/-. The assessee is an individual and is engaged in the business of trading and dealership of Lubricating Oil and Greases under the trade name M/s. „Ganesh Minerals. An information was received from the Maharashtra Sales Tax Department in which it was conveyed that the assessee has taken the bogus purchase entry in sum of Rs.86,25,759/- from the following three parties: - S. No. Name of the accommodation bill TIN Amount (in Rs.) provider 1 International Enterprises 27770240230V 10,65,001/- 2 Ronak Enterprises 27790692724V 34,57,126/- 3 Siddhivinayak Corporation 27180634908V 41,03,632/- Total 86,25,759/- Thereafter, the notice was given and after the reply of the assessee, 25% of the said purchase was added to the income of the assessee. The penalty proceeding was initiated. After the reply of the assessee, the penalty in sum A.Y. 2011-12 of Rs.3,50,000/- was levied. Feeling aggrieved, the assessee an appeal before the CIT(A) who confirmed the penalty, therefore, the assessee has filed the present appeal before us. 5. We have heard the argument advanced by the Ld. Representative of the Revenue and perused the record. We noticed that the AO has levied the penalty on account of raising the addition on the bogus purchase. The income was estimated and addition was raised. No penalty is leviable when the income has been estimated. In this regard, we find support of the decision of Hon‟ble Punjab & Haryana High Court in the case of Harigopal Singh Vs. CIT (2002) 258 ITR 85 (P & H). We also find support of the decision of the Hon‟ble Gujarat High Court in the case of National Textiles Vs. CIT 2001 164 CTR 2009 (Guj) in which it is specifically held that the penalty is not leviable when the profit was estimated on estimation basis. Taking into account all the facts and circumstances of the case, we are of the view that the finding of the CIT(Appeals) is not liable to be sustainable in the eyes of law. Accordingly, we set aside the finding of the CIT(A) on the issue and delete the penalty. 5. In the result, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 16/12/2021 (SHAMIM YAHYA) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 16/12/2021 Vijay Pal Singh (Sr. PS)