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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
आदेश / O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)]-13, Mumbai, [in short CIT(A)], in 7(2)91)/02/2017-18 dated 10.06.2019. The assessment was framed by the Dy. Commissioner of Income Tax (in short DCIT/ITO/ AO), Central Circle-6(3), Mumbai for the A.Y. 2010-11 vide
The only issue in this appeal of Revenue is against the order of CIT(A) deleting the penalty levied by the Assessing Officer under section 271(1)(c) of the Act in relation to addition made on account of unexplained investment in bogus purchases. For this, Revenue has raised the following two grounds :-
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred by deleting the penalty in relation to the addition made on account of unexplained investment in purchases and not considering the fact that the genuineness of the transaction was not be established by the assessee.
2. On facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty by not appreciating the fact that the assessee did not discharge its onus of producing the parties or their confirmations in respect of the alleged purchases, particularly in view of the fact that the alleged suppliers were held to be non-genuine by the Maharashtra Sales Tax Department."
“3.2.1 The assessee challenged the levy of penalty of Rs.5,36,000/- under section 271(1)(c) of the I.T. Act. The Assessing Officer levied penalty in relation to concealment of Rs.16,23,698/-. The bifurcation of the same is as under:-
(i) Unexplained investment - Rs. 2,32,328/-
(ii) Capitalisation of interest - Rs.4,19,969/- iii) Capitalisation of expenses - Rs. 5,21,359/- (i) Unexplained investment :
3.2.2. This addition is related to unexplained investment in bogus purchases. The AO made addition of Rs.18,58,622/- on account of unexplained investment in bogus purchases. The CIT(A) and Hon’ble ITAT have confirmed an addition of Rs. 2,32,328/- on account of profit on the alleged transactions.
3.2.3 The nature of addition made by Assessing Officer and the nature of addition confirmed by CIT(A) differ materially. Secondly, the addition confirmed by CIT(A) was on estimation basis. Thirdly, the Assessing Officer has not brought anything on record to prove concealment of income. He merely relied on the decision of CIT(A).
3.2.4 Considering the above, levy of penalty in relation to this amount is not considered justified.”
We noted that the Assessing Officer has levied penalty in respect of the following four items but CIT(A) deleted the penalty under section 271(1)(c) of the Act on all the items. But, the Revenue has challenged the penalty under section 271(1)(c) i.e. the order of CIT(A) only on one ground i.e. unexplained investment in bogus purchases:-