RAVI KUMAR RAWAT,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2, JAIPUR

5. In view of totality of the facts and keeping in view the provisions of Section 271(1)© , the assessee is found guilty of furnishing of inaccurate particulars of income to the extent of amount of Rs.2,67,647/-. For that reason, I am satisfied that ‘’Assessee’’ has committed default u/s 271(1)( c) of theI.T. Act and therefore, penalty u/s 271(1)( c) is imposed on the furnishing of inaccurate particulars of income as per working given below:- Calculation of penalty imposable Income furnished inaccurately Rs.2,67,647/- Tax sought to be evaded Rs.1,03,148/ Minimum penalty imposable @ 100% Rs.1,03,148/- Maximum penalty imposable @ 300% Rs.3,09,444/- Hence, penalty of Rs.1,03,150/- is imposed u/s 271(1)(c ) of the Income Tax Act, 1961 after taking necessary approval from Addl. CIT, Range-2, Jaipur.’’ 2.3 Being aggrieved by the penalty order, the assessee carried the matter before the ld.CIT(A) who confirmed the action of the AO by & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR dismissing the appeal of the assessee. The narration as made by the ld CIT(A) in his order at para 19 and page 30 is reproduced as under:- ‘’(19) In the present case the estimation was required due to the non submission of the details and non compliance of the law by the appellant. The true and correct details of the purchases were concealed by the appellant even after the purchases from the entry operator parties were found to be bogus and accommodation entries and entries in books of accounts were found as false/incorrect. The correct details are only in the possession of the appellant. Such kind of grey market transactions and transactions of accommodation entries takes place in secret. Addition was made in the assessment on the basis of specific information and evidences and inquiries and after affording due opportunities to the appellant and the books of account were rejected u/s 145(3). The income has to be estimated because of the "wrong" of the assessee. It is a settled principle that no one can be allowed to take benefit of his own wrong. Further, the estimate done in the background of there being on the record enough material to show that any particular entries in the books of account were false or incorrect. The way of assessment of income of the appellant in the present case no way takes away the guilt of the assessee or explain its failure to prove that the failure to return the correct income did not arise from any fraud or any gross or willful neglect on its part. Apparently the assessee was taking a chance-sitting on the fence. In view of the above discussion the levy of penalty in the penalty order under appeal is hereby upheld and this ground of appeal of the appellant is hereby dismissed.

2.4 Similarly for the assessment year 2009-10, the penalty of Rs.13,782/- was imposed by the AO vide his order dated 17-03-2020 which has been confirmed by the ld. CIT(A) holding the same analogy in his order dated 12-09-2024. The relevant para 4.2of ld. CIT(A)’s order is reproduced as under:- ‘’4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the penalty order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under I have decided the similar issue in the case of the appellant for the assessment year 2008-09 in the ground of appeal number 1 where Ground of Appeal has been dismissed after detailed adjudication Material facts of the present appeal in the relevant ground of appeal being parn-materia with the facts of the appeal in the assessment year 2008-09, the findings of the appeal order in the case of assessment year 2008-09 in the ground of appeal number 1 will apply mutatis- mutandis to the present appeal for the assessment year 2009-10 and it is held accordingly. Accordingly, this Ground of Appeal No. 1 is dismissed.’’ 2.5 While hearing of the present appeals ld. AR of the assessee has filed the written submission in connection with penalty confirmed u/s 271(1)© for both the assessment years and submitted that penalty confirmed by the ld. CIT(A) for both the assessment years needs to be deleted on the following counts; WRITTEN SUBMISSIONS Ground No. 1 [Penalty imposed u/s 271(1)(c) of the Act A.Y. 2008- 2009- Rs 1,03,150/- 2009-2010-Rs 13,782]

1. The assessee appellant is an individual carrying on the business activity of trading, import and export of precious and semiprecious stones for the past several years under his sole proprietorship concern M/s. Precious Jewels.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR 3. That assessee was assessed u/s 148 of the Act vide order dated 25.01.2016 wherein the assessee was alleged for indulging in taking the accommodation entry and ld. assessing officer vide order dated 25.01.2016 disallowed the 25% of the purchase alleged of bogus and made addition after rejecting books of account u/s 145(3) of the Act. That against the assessment order dated 25.01.2016, the assessee preferred an appeal before the CIT(A) and ld. CIT(A) after considering the submission of the assessee, reduce the G.P. on estimated basis against the G.P. declare by the assessee. The detail of addition made by the ld. assessing officer and relief given by the ld. CIT(A) for the Assessment year 2008-2009 and 2009-2010 is as under:- A.Y. Purchase Addition Addition Disallowance (Assessing restricted (25%) officer) (CIT-A) 2008-2009 2405836 601459 333812 2009-2010 178783 44696 40548 Copy of order dated 14.12.2018 passed by the ld. CIT(A) against the addition made u/s 143/147 of the Act for the Assessment year 2008-2009 and 2009- 2010 is enclosed herewith.

4. That penalty proceeding u/s 271(1)(c) of the Act was initiated against the assessee in consequences of the order dated 25.01.2016 and the ld. assessing officer without appreciating the submission submit in response to Show-cause notice, without considering the precedents settled by the different benches of the Hon’ble tribunals that the penalty is not leviable on the addition based on estimated basis.

5. The ld. assessing officer grossly erred in holding that the addition made in the case of the assessee is not general G.P. addition, The addition was made on the basis of specific information and without going into the facts that the books of account was rejected u/s 145(3) and when the books of the account is not accepted during the assessment proceeding, the addition will only be made on the estimated basis.

6. That against the order passed u/s 271(1)(c) by the ld. Assessing officer, assessee preferred an appeal before the ld. CIT(A) and filed the detail written submission on 21.03.2024 in support of ground of the appeal and also relied upon the judicial precedent which is as under:-

 Shri Alok Haldia v. ACIT [2019 (4) TMI 673-ITAT Jaipur

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR The ld. CIT(A) has estimated 15% of the profit on such purchases, accordingly given partial relief. In quantum appeal, the Tribunal have confirmed the order of the ld. CIT(A) upholding the addition @ 15%. The A.O. has also imposed penalty U/s 271(1)(c) of the Act with regard to estimated quantum addition upheld by the ld. CIT(A). The assessee is in further appeal before us with regard topenalty so imposed by the A.O. U/s 271(1)(c) of the Act. However, the quantum and penalty proceedings are separate and if in the penalty proceedings, it is found that the assessee has furnished all the evidences to substantiate its claim of not furnishing inaccurate particulars, no penalty is to be imposed even if the addition is being confirmed. In the instant case, the assessee is carrying on business at Jaipur as exporter and trader of precious and semi precious gems and stones from last many years. The entire sales of ₹ 4,11,22,504/- are export sales and all realizations of sale proceeds are in the form of foreign currency through proper banking channels. For the purposes of exports, the assessee purchases goods from various dealers including above named JPK Trading (I) Pvt. Ltd and the same were exported outside India. In the course of this regular business activity the assessee inter alia purchased goods, namely precious and semi precious gems and stones from above named company JPK Trading (I) Pvt. Ltd. and to prove the genuineness of the purchases made from above named party the assessee furnished copy of purchases invoices, copy of bank statements copy of export invoices, Airways bills, bank advice in relation to realization of sale proceeds in foreign exchange, confirmation of supplier, TIN of supplier which is issued to a dealer doing business of purchase/sale issued by the Govt. of Rajasthan. It is clear from the documents so furnished by the assessee that the assessee has submitted all the documentary evidences to substantiate the purchases so made, under these facts and circumstances, merely making of estimated addition of 15% will not attract the penalty U/s 271(1)(c) of the Act.

6. The ITAT, Jaipur Bench in the case of Deepak Dalela Vs. ITO in dated 22/12/2016 has held as under:- “5. We have heard the rival contentions of both the parties, perused the material available on the recordand also gone through the orders of the lower authorities. The Coordinate Bench in the identical case i.e. in the case of ITO Vs. M/s Bhansali Trading Corporation, has held as under:- “6. We have heard the rival contentions of both the parties and perused the material available on the record. The addition made by the A.O. was specific on account of unverifiable purchases on which G.P. @ 25% was applied and added in the income. However, the same was reduced by the ld CIT(A) and applied different G.P. rate. However, the additions were specific. The assessee has not been able to produce these parties for verification and also summons were returned back to the officer unserved. This Bench recently & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR decided this issue in detail in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases in ITA No. 187/JP/2012 order dated 22/10/2014 and gave detail findings on unverifiable purchases in number of cases. The department has been able to prove that in gems and jewellery business, some of the parties were giving accommodation entry and some of them accepting the accommodation bill to reduce the profit. The parties names figured in this case also were similar to those cases, therefore, we hold that the addition made by the Assessing Officer was ITA No.95/JP/2017 Shri Ashosk Kumar Gupta vs ITO, Ward- 4(2), Jaipur 7 specific and assessee had concealed the income and furnished inaccurate particulars of income. Further the assessee’s explanation is not bonafide. The case laws referred by the assessee are not squarely applicable. In this case, the addition was specific with reference to unverifiable purchases. Therefore, we reverse the order of the ld CIT(A).” Ld. AR of the assessee has placed reliance on the decision in the case of Shiv Lal Tak Vs CIT (supra) wherein the Hon'ble High Court has held that “in making computation of total income where the income returned has been rejected by rejecting the trading results, finding some discrepancy in the books of account and substituting the same by an estimated figure, in the strict sense, can neither be said to be addition of any amount in the returned income nor disallowance of any amount as deductions claimed. The word ‘‘amount’’ of which additions made or deductions disallowed also denotes reference to specific item of amount added or disallowed as deduction in contrast to substitution of altogether a new estimated sum in place of the income returned. It is a case neither of addition or disallowance but a case of substitution.” In view thereof, the Hon'ble High Court has upheld the decision of the Tribunal for deleting the penalty. In the light of the above decision of the Hon'ble Jurisdictional High Court, we hereby direct the Assessing Officer to delete the penalty as in the present case also the Assessing Officer has estimated the profit by rejecting the books of account. Accordingly, we delete the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A).’’ 7. In view of the above discussion, we do not find any merit in imposition of penalty U/s 271(1)(c) of the Act and the Assessing Officer is directed to delete the same. We order accordingly.”

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR 4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that the AO during the course of assessment proceeding noted that the assessee had not maintained the books of account besides the assessee did not maintain the quality details of the stock. The AO thus rejected the books of account of the assessee u/s 143(3) of the Act and made the addition of ₹ 5,65,304/- i.e. @ 25% on unverifiable purchases of ₹ 22,61,216/-. In appellate proceedings, the ld. CIT(A) confirmed the addition of 25% on unverifiable/bogus purchases observing that the assessee is involved in activities of taking accommodation entries in order to reduce the profitability. It is further noted that the AO vide his order dated 28-08- 2013 imposed the penalty of ₹ 1,72,981/- u/s 271(1)( c) of the Act which was confirmed by the ld. CIT(A). We have further observed that on similar issue of imposing penalty u/s 271(1)(c ) of the Act, the ITAT Jaipur Bench in the case of Deepak Dalela vs ITO (supra) has deleted the penalty by observing as under:- 5. We have heard the rival contentions of both the parties, perused the material available on the recordand also gone through the orders of the lower authorities. The Coordinate Bench in the identical case i.e. in the case of ITO Vs. M/s Bhansali Trading Corporation, has held as under:- “6. We have heard the rival contentions of both the parties and perused the material available on the record. The addition made by the Assessing Officer was specific on account of unverifiable purchases on which G.P. @ 25% was applied and added in the income. However, the same was reduced by the ld CIT(A) and applied different G.P. rate. However, the additions were specific. The assessee has not been able to produce these parties for verification and also summons were returned back to the officer unserved. This Bench recently decided this issue in detail in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases in order dated 22/10/2014 and gave detail findings on unverifiable purchases in number of cases. The department has been able to prove that in gems and jewellery business, some of the parties were giving accommodation entry and some of them accepting the accommodation bill to reduce the profit. The parties names figured in this case also were similar to those cases, therefore, we hold that the addition made by the Assessing Officer was specific and assessee had concealed the income and furnished inaccurate particulars of income. Further the assessee’s explanation is not bonafide. The case laws referred by the assessee are not squarely applicable. In this case, the addition was specific with reference to unverifiable purchases. Therefore, we reverse the order of the ld CIT(A).” Ld. AR of the assessee has placed reliance on the decision in the case of Shiv Lal Tak Vs CIT (supra) wherein the Hon'ble High Court has held that “in making computation of total income where the income returned has been & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR rejected by rejecting the trading results, finding some discrepancy in the books of account and substituting the same by an estimated figure, in the strict sense, can neither be said to be addition of any amount in the returned income nor disallowance of any amount as deductions claimed. The word ‘‘amount’’ of which additions made or deductions disallowed also denotes reference to specific item of amount added or disallowed as deduction in contrast to substitution of altogether a new estimated sum in place of the income returned. It is a case neither of addition or disallowance but a case of substitution.” In view thereof, the Hon'ble High Court has upheld the decision of the Tribunal for deleting the penalty. In the light of the above decision of the Hon'ble Jurisdictional High Court, we hereby direct the Assessing Officer to delete the penalty as in the present case also the Assessing Officer has estimated the profit by rejecting the books of account. Accordingly, we delete the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A).’’ Respectfully following the decision on similar issue by ITAT Jaipur bench in the case of Deepak Dalela vs ITO (supra), we direct to delete the penalty of ₹ 1,72,981/- u/s 271(1)(c ) of the Act confirmed by the ld. CIT(A). Thus the appeal of the assessee is allowed.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR INDEX S.no. Particular Page No.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR Brief facts of the case as per the penalty order are that during the course of assessment proceedings, the AO observed that the assessee has taken accommodation entries from M/s Vitrag Jewels of Rs. 27,87,133/- and disallowed 25% of the same, which resulted in addition of Rs. 6,96,783. Thereafter, the assessee preferred an appeal before the ld. CIT(A) which was partly allowed by the Ld. CIT(A) on 29/06/2018 in appeal No. 603/2014-15. The Id. CIT (A) restricted the addition on the issue of non genuineness of purchases from 6,96,783/- to 3,02,073-by applying G.P. rate of 10.80%. Thus, the addition of Rs. 3,02.073/- was sustained by the ld. CIT(A). The assessee preferred further appeal before Hon'ble ITAT which was partly allowed by the Hon'ble ITAT on 12.07.2019 in appeal No. ITA 1013/JP/2018. The Hon'ble ITAT restricted the G.P. rate at 10.28% as against 10.80% held by CIT(A). Thus, the addition was restricted to Rs. 46,943. Ld. AO levied the penalty u/s 271(1)(c) w.r.t. this sustained addition. The appellant has relied upon the judgement of honourable ITAT Jaipur bench in the cases of (i) Shri Alok Haldia v. ACIT (2019 (4) TMI 673-ITAT, Jaipur] dated 08.04.2019, () Deepak Dalela Vs ITO in dated 22/12/2016 (iii) Ashok Kumar Gupta v ITO [2018 (6) TMI 69-ITAT Jaipur] dated 30.05.2018 and other judgements and contended that the penalty cannot be levied in the case as the appellant had given all the documentary evidences in support of the purchases and that the addition is on estimate basis which has been gradually and substantially reduced by the ld. CIT(A) and Hon'ble ITAT. Initially the disallowance was made by the learned AO at the rate of 25% of the purchase value which ultimately came to be restricted to 10.28% Considering the facts of the case and the circumstances, respectfully following the judgements of honourable ITAT Jaipur bench, the penalty levied by the learned AO is hereby directed to be deleted and this ground of appeal of the appellant is hereby allowed.’’ 2.9 Thus, it is clear from the above order of the ld. CIT(A) that he has allowed the penalty appeal of the assessee for the assessment year 2007- 08 on the same set of facts whereas for assessment years 2008-09 and 2009-10 though the facts being same should have been allowed.The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principles should be followed we find out that the ld. CIT(A) has not given any reasons as to why he has not followed his own order in the case of same assessee in spite of the fact that the issues and analogy in both the appeals are the same. Hence, in view of all these facts and circumstances of the case, we do not concur with the findings of the ld.CIT(A) as both the issues are fully covered by the decision of ITAT Jaipur Bench (supra) as narrated in the order of the ld CIT(A) dated 17-05-2024 and the same has been followed by him while determining the appeal of the assessee for assessment year 2007-08. The records reveal that the purchase made by the assessee alleged to have been considered as bogus and thereby the profit was estimated and confirmed in the hands of the assessee. That claim itself is not considered fully not correct and thereby the profit was added. Thus, we get support of the decision of the apex court in the case Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Private Limited [ 189 Taxman 322(SC) wherein the apex court held that :-

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inaccurate" has been defined as :— "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars.

Hence, in view the entirety of the matter, both the appeals of the assessee relating to penalty u/s 271(1)(c) for the assessment year 2008-09 and 2009-10 are allowed, respectfully following the rule of judicial consistency and decision of the apex court.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR 3.0 In the result, both the appeals of the assessee relating to levy of penalty under section 271(1)©of the Act are allowed. Sd/- ¼jkBksMdeys'kt;UrHkkbZ ½ (Rathod Kamlesh Jayantbhai) ys[kklnL;@Accountant Member PER :NARINDER KUMAR, JUDICIAL MEMBER.

I have gone through the draft order communicated by my Learned Brother-Accountant Member. I have reasons to add in dealing with the issue involved, and as such, I proceed to append my reasons, observations and opinion.

2. Two separate orders passed by Learned CIT(A) i.e. order dated 11.09.2024 relating to the assessment year 2008-09, and the order dated 12.09.2024 relating to the assessment year 2009-10 are under challenge before us. Vide first mentioned impugned order, relating to the assessment year 2008-2009, Learned CIT(A) has dismissed the appeal filed by the assessee and thereby upheld penalty of Rs. 1,03,150/- imposed by the Assessing Officer, u/s 271(1)(c) of the Income Tax Act (hereinafter referred to as the & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR “Act”) as he found that the assessee was guilty of furnishing of inaccurate particulars of income to the extent of Rs. 2,67,647/-. Vide second mentioned impugned order dated 12.09.2024 penalty order dated 17.03.2022 passed by the Assessing Officer imposing penalty of Rs. 13,782/-, relating to the assessment year 2009-10, has been upheld, thereby confirming the findings that the assessee was found guilty of furnishing of inaccurate particulars of income to the tune of Rs. 40,548/-.

3. While dealing with appeal for the assessment year 2008-09, Learned CIT(A) observed that the assessee-appellant was found to have concealed true and correct details as regards purchases as accommodation entries were found to have been got made by the assessee from entry operator party, and the entries in his books of accounts were found to be false /incorrect, as a result whereof estimation was required to be done. Accordingly, Ld. CIT(A) dismissed said appeal filed by the assessee and upheld the penalty order. As regards the other impugned order relating to the assessment year 2009-10, Learned CIT(A), after taking into consideration the submission put forth by the appellant, the discussion made while adjudicating the same issue relating to the previous assessment year 2008-09, and applying the & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR same findings mutatis mutandis to the second appeal, dismissed the same.

4. Ld. AR for the assessee-appellant has contended that the Assessing Officer passed the penalty order on determination of GP rate, on estimation basis, and as such, no penalty should have been levied “on estimation”. In support of this contention, Ld. AR relied on following three decisions :-  Shri Alok Haldia vs. ACIT (2019) (4) TMI 673-ITAT-Jaipur, decided on 08.04.2019.  Ashok Kumar Gupta vs. ITO (2018)(6) TMI 69-ITAT-Jaipur, decided on 30.05.2018.  Harigopal Singh vs. CIT (2002) 258 ITR 85 Hon’ble Punjab & Haryana High Court.

5. Another submission put forth by Ld. AR for the assessee-appellant is that Learned CIT(A) while dealing with challenge to an order dated 17.05.2024 by which penalty u/s 271(1)(c) of the Act relating to the assessment year 2007-08 was imposed, set aside said penalty order, and as such, even on this ground the penalties imposed by the Assessing Officer deserved to be set aside.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR 6. On the other hand, Ld. DR for the department has contended that while framing assessment, these cases were found to be of bogus purchases, for the reasons recorded by the Assessing Officer, and as such, the Assessing Officer was justified in imposing penalty in respect of the said assessment years, and Learned CIT(A) was also justified in confirming the said penalties, for the reasons recorded in the impugned orders.

7. As regards setting aside of the previous penalty order by Learned CIT(A) relating to the assessment year 2007-2008, Learned DR has not disputed this factual position that penalty order was set aside. Copy of said order is available from page 83 to 92 of the paper book submitted on behalf of the appellant. In said order, Learned CIT(A) considered the contention raised before him on behalf of the appellant that the appellant had given all the documentary evidences in support of the purchases and also that the addition was on estimate basis, which was gradually and substantially reduced by Ld. CIT(A) and Hon’ble ITAT i.e. from the rate of 25% of the total purchase value, same was restricted to 10.28%. Ld. CIT(A) deleted the penalty following three decisions cited there, i.e.:-

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR -Shri Alok Haldia vs. ACIT (2019) (4) TMI 673-ITAT-Jaipur, decided on 08.04.2019; -Ashok Kumar Gupta vs. ITO (2018)(6) TMI 69-ITAT-Jaipur, decided on 30.05.2018; -Deepak Dalela v. ITO, dated 22.12.2016.

8. Admittedly, Ld. CIT(A) had deleted the penalty that was levied in similar facts i.e. case of availing of accommodation entries by the assessee from M/s Vitrag Jewels, and the Appellate Authority and Appellate Tribunal having restricted the addition that was made on estimation of rate of Gross Profit, on account of bogus purchases. Once, the abovesaid penalty order as regards previous assessment year 2007-2008, based on similar facts was set aside, while dealing with the appeals challenging 2 penalty orders pertaining to the subsequent assessment years i.e. 2008-09 and 2009-10, Ld. CIT(A) was required to record reasons for not following the view already taken or as to why present matters were distinguishable. Ld. CIT(A) observed that the assessee did not make available copy of the assessment orders or the submissions put forth before the Assessing Officer, but he failed to comply with the directions.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR It is true that the assessee-appellant should have made available copies of the assessment orders of the previous assessment years as well as the written submissions before the Assessing Officer(s), but he failed to do so, for the reasons best known to him. Surprisingly, he has placed here copies of the orders passed by Ld. CIT(A) as regards the quantum assessments of those two years. Therein, the allegations were of bogus purchases by the appellant and accommodation entries availed of by him from M/s Aadi Impex and Rajendra Jain Group, entry operators. There also, addition was made considering 25% of the purchases as bogus purchases, but the addition was ultimately restricted. As regards both the assessment years, estimation was made as regards Gross Profits. It is not case of the department that in the previous two penalty orders or assessment orders the Assessing Officer(s) had found that the purchases were 100% bogus. Had it been so, then the matter would have been different, and both these appeals, deserved to be dismissed in view of decision in Sandeep Kewalchand Mehtav.ACIT,[2025] 173 taxmann.com 315 (Mumbai - Trib.).

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR Therein, levy of penalty u/s 271(1)(c) of the Act amounting to Rs. 1,84,771/-stated to be on estimated profits on the addition of unverified purchases, was confirmed by Ld. CIT(A). Prior to the penalty order, assessment order dated 30/03/2015 was passed u/s 143(3) r.w.s. 147 of the Act wherein, during the course of the scrutiny assessment proceedings, on the basis of the information received from the Sales-tax authorities, the AO came to know that the assessee had made bogus purchases from hawala parties amounting to Rs.43,48,834/-, and the entire amount was added to the income of the assessee. Matter came up before the Appellate Tribunal.The Tribunal vide its order dated 31/10/2017, restricted the quantum addition at 12.5% of the bogus purchases. It was in pursuance of the order of the Tribunal, penalty proceedings were initiated u/s 271(1)(c) of the Act, and a penalty of Rs.1,84,771/- was levied. There, on behalf of the appellant, it was contended that since the quantum addition was estimated, no penalty should be levied on estimation of profit.

& 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR On the other hand, Ld. D/R pointed out that no estimation was made, and rather, AO was found to have added the entire bogus purchases, and the Tribunal restricted the addition to 12.5% of the bogus purchases being the profit element imbibed in such bogus purchases. In the given situation , it was argued that profit could not have been estimated and rather, the penalty was found to have been levied on estimated profits. Therein , the undisputed fact was that the additions were made on account of bogus purchases and ultimately, the Tribunal restricted the quantum addition at 12.5% of the bogus purchases. Therefore, it was held that there was no merit in the contention of the ld. Counsel that the profit had been estimated and the penalty had been levied on estimated profit. Therein, facts on record showed that there were bogus purchases and only the profit element had been added which meant that the assesse had concealed the income to this extent in the garb of purchases which turned out to be bogus. Therefore, considering the facts of the case in totality, it was held that there was no hesitation in confirming the penalty so levied & 1324/JPR/2024 SHRI RAVI KUMAR RAWAT VS DCIT, CIRCLE-2, JAIPUR u/s 271(1)(c) of the Act. The appeal filed by the assessee was accordingly dismissed.