INCOME TAX OFFICER-5(1)(2), MUMBAI vs. M/S BHARAT BRIGHT BARS PVT. LTD., MUMBAI

5258/Mum/2019 M/s. Bharat Bright Bars Pvt. Ltd., 10,Mumbai/10034/2018-19 & CIT(A)-10, Mumbai/10035/2018-19 dated 10/05/2019 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as Act).

The only identical issue involved in all these appeals is as to whether the ld. CIT(A) was justified in deleting the penalty levied on account of addition made on an estimated basis towards bogus purchases.

We have heard rival submissions and perused the materials available on record. We find that assessee is a company engaged in the business of processing and manufacturing of bright steel bars. We find that the ld. AO had made an addition on account of bogus purchases on an estimated basis @35% which was reduced to 12.5% by the ld. CIT(A) for all the assessment years under consideration. Thereafter, the ld. AO levied penalty on the additions sustained @12.5% of value of purchases. We find that the ld. CIT(A) had given a categorical finding that except for rejection of the explanation furnished by the assessee, there is absolutely no material to sustain the plea of concealment. We find that the ld. CIT(A) deleted the penalty on the ground that the addition was made only on an estimated basis.

Aggrieved, the Revenue is in appeal before us.

We find that on the quantum addition restricted to 12.5% by the ld. CIT(A), Revenue had come up in appeal before this Tribunal and this Tribunal had confirmed the stand taken by the ld. CIT(A). We hold that no penalty could survive on an addition made on estimated basis. Reliance in this regard is placed on the Co-ordinate Bench decision of this Tribunal in the case of ITO vs. Madhuben Prakash Parekh in for A.Y.2010-11 dated 29/01/2020. Accordingly, the grounds raised by the Revenue are dismissed.

In the result, appeals of the Revenue are dismissed.