INCOME TAX OFFICER-25(1)(5), MUMBAI vs. SHRI URVESH AMRITLAL PATEL, MUMBAI

Learned representative fairly agree that the issue in appeal is now covered in favour of the assessee by a number of decisions of co-ordinate benches of this Tribunal. Learned Departmental Representative, nevertheless, relied upon the stand of the Assessing Officer and justified the impugned penalty of Rs. 11,767/-. The impugned penalty is in respect of alleged bogus purchases of Rs. 2,53,906/- out of which 15% has been confirmed by the CIT(A) on estimated basis. Dealing with a materially similar situation, a co-ordinate bench of this Tribunal has observed as follows:- 1. In the case of Shri Ajay Loknath Lohia, for the AY 2009-10 vide order dtd. 05/10/2018 the Hon'ble Income Tax Appellate Tribunal Mumbai Bench "A", Mumbai has held that 'Having heard both sides, we find merit in the arguments of the assessee for the reason that although the AO has estimated 25% gross profit on alleged bogus purchases, never made any observations with regard to the incorrectness in details filed by the assessee to prove such purchases. The AO never disbelieved information filed by the assessee, but the proceeded on the basis of information received from sales-tax department to make additions. The AO has made such addition on ad hoc basis by estimating gross profit on alleged bogus purchases. From these facts, it is very clear that the AO failed to make a case of deliberate attempt by the assessee to furnish inaccurate particulars of income. Therefore, we are of the considered view that mere ITA 2998/Mum/2017 disallowance of purchases on ad hoc basis does not tantamount to wilful furnishing inaccurate particulars of income within the meaning of section 271(1)(c) of the Income Tax Act, 1961. Hence, we are of the considered view that the AO was erred in levying penalty u/s. 271(1)(c) of the Act. Accordingly we direct the AO to delete penalty levied u/s. 271(1)(c) of the Act.'

We see no reasons to take any other view of the matter than the view so taken by the co-ordinate bench - which has also been reproduced by the learned CIT(A) in the impugned order. Respectfully following the same, we approve, the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter.