Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘H‘ BENCH
Before: SHRI VIKAS AWASTHY, JM & SHRI M.BALAGANESH, AM
आदेश / O R D E R PER M. BALAGANESH (A.M): These appeals in for A.Y.2009-10, 2010-11 & 2011-12 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-28, Mumbai in appeal No.CIT(A)-28/ITBA- 10148/ITO-17(3)(2)/2018-19, CIT(A)-28/ITBA-10145/ITO-17(3)(2)/2018- 19 & CIT(A)-28/ITBA-10147/ITO-17(3)(2)/2018-19dated 11/09/2019 (ld.
CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961.
The only issue to be decided in these appeals of the assessee is that whether the penalty u/s.271(1)(c) of the Act could be levied on disallowance made on account of bogus purchases on an estimated basis.
We have heard rival submissions and perused the materials available on record. It is not in dispute that the ld. AO had made disallowance @25% of tainted purchases in the assessment which was ultimately brought town to 5% thereon by this Tribunal in the quantum proceedings. Subsequently, the ld. AO had levied penalty for the sustained estimated profit percentage of 5% u/s.271(1)(c) of the Act. Hence, it could be safely concluded that ultimately in the quantum assessment proceedings the disallowance was made only on an estimated basis by estimating profit percentage at 5% of tainted purchases. It is trite law that no penalty u/s.271(1)(c) of the Act could be levied on an addition which has been made on an estimated basis. Hence, we hereby direct the ld. AO to delete the penalty u/s.271(1)(c) of the Act. Accordingly, the grounds raised by the assessee are allowed.
In the result, appeals of the assessee are allowed.
Order pronounced in the open Court on 18/03/2021.