SHRI. SHANTILAL J SANGHAVI ,MUMBAI vs. ITO 17(3)(3) , MUMBAI

Aforesaid appeal by assessee for Assessment Year [AY] 2009-10 arises out of the order of Ld. Commissioner of Income-Tax (Appeals)-28, Mumbai [CIT(A)] dated 08/07/2019 which has confirmed the penalty of Rs.74,800/- u/s 271(1)(c) as levied by Ld. AO vide penalty order dated 21/03/2018. The Ld. AR submitted that penalty is not sustainable since the additions are estimated additions. The Ld. Sr. DR, on the other hand, justified the penalty on the facts of the case.

Facts leading to imposition of penalty are that in an assessment framed u/s 143(3) r.w.s. 147 on 27/02/2015, the assessee was saddled with addition of alleged bogus purchases for Rs.24.64 Lacs. Upon further appeal, the quantum was estimated @10.12% of Rs.24.64 Lacs. Consequently, penalty of Rs.74,800/- was imposed. The penalty, upon confirmation in first appellate order, is in further challenge before us.

In our considered opinion, the penalty is not sustainable since the additions are mere estimated additions of unproved purchases and therefore, no case of concealment of income or furnishing of inaccurate particulars of income could be made out against the assessee. The same is evident from the fact that the assessee had furnished purchase invoices, delivery challans and corresponding sales bills in support of the suspicious purchases. Our aforesaid view is duly supported by the order of Hon’ble Chhattisgarh High Court in CIT V/s Vijay Kumar Jain (325 ITR 378; 19/04/2010). Therefore, we are inclined to delete the impugned penalty.

Resultantly, the appeal stand allowed. Order pronounced in open court on 05th October, 2021. (Vikas Awasthy) (Manoj Kumar Aggarwal) न्याययक सदस्य / Judicial Member लेखा सदस्य / Accountant Member मुंबई Mumbai; यदनांक Dated : 05/10/2021 Sr.PS, Dhananjay आदेशकीप्रधिधलधपअग्रेधर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) आयकरआयुक्त/ CIT– concerned 4. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai 5. 6. गार्डफाईल / Guard File