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Income Tax Appellate Tribunal, “H” Bench, Mumbai
O R D E R Per Shamim Yahya (AM) :-
This is an appeal by the assessee that the learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] has erred in sustaining the penalty levied under section 271(1)(c) of the Act amounting to Rs. 28,509/- by order dated 20.7.2016 pertaining to A.Y. 2011-12.
Brief facts of the case are that the assessee in this case is engaged in the business of sale of furniture and interior items. During the course of assessment proceedings the Assessing Officer made disallowance of 25% of the purchases from bogus purchaser upon information from sales tax department. Penalty u/s. 271(1)(c) of the Act amounting to Rs. 28,509/- was also levied.
Upon assessee’s appeal learned CIT(A) upheld the penalty.
Against this order the assessee is in appeal before the ITAT. We have heard learned Departmental Representative and perused the records. We find that the addition on account of bogus purchases has been done on estimated basis. The assessee has furnished all the necessary details. There is no case of furnishing of inaccurate particulars or concealment of income. Hence, learned CIT(A) is not correct in holding that the penalty under section 271(1)(c) of the Act in this case is sustainable. We further note that the conduct of the assessee in this case cannot be considered to be contumacious warrant levy of penalty under section 271(1)(c) of the Act. This proposition is supported by the decision in the case of Hindustan Steel Vs. State of Orissa Vs. (83 ITR 26). Hence, we set aside the order of the authorities below and delete the penalty.
In the result, appeal filed by the assessee stands allowed. 5.
Order pronounced under Rule 34(4) of the ITAT Rules by placing the result on notice board on 17.11.2020.