ITO - 13(3)(3), MUMBAI vs. VIVA COMPOSITE PANEL PVT. LTD., MUMBAI

O R D E R Per Bench 1. Aforesaid appeals by revenue for Assessment Years [in short referred to as ‘AY’] 2010-11 & 2011-12 contest separate orders of Ld. Commissioner of Income Tax (Appeals)-21, Mumbai [CIT(A)] qua deletion of certain penalty u/s 271(1)(c). In the said orders, Ld. CIT(A) has deleted penalty of Rs.1 Lac & Rs.0.87 Lac for AYs 2010-11 & 2011- M/s Viva Composite Panel Private Limited Assessment Years :2010-11 & 2011-12 12 respectively. The facts as well as grounds raised

in both the years are identical and adjudication in any year shall equally apply to the other year also. The grounds for AY 2010-11 reads as under: -

1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied without appreciating the facts that the assessee has failed to prove the genuineness of transaction of the purchases.

2. The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. We have carefully heard the arguments advanced by both the sides. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

2. While framing assessment for AY 2010-11, the assessee was saddled with estimated addition of Rs.3.24 Lacs which was nothing but estimated addition of 12.5% against certain suspicious purchases since the assessee failed to discharge the onus of establishing the genuineness of purchases. Consequently, a penalty of Rs.1 Lac was levied by Ld. AO u/s 271(1)(c) vide order dated 06/12/2017.

3. The Ld. CIT(A) deleted the same by observing that the penalty could not be levied where the additions were made on estimated basis. For the said proposition, reliance was placed, inter-alia, on the binding decision of Hon’ble Punjab & Haryana High Court in Harigopal Singh V/s CIT 258 ITR 85 and Hon’ble Gujarat High Court in CIT V/s Subhash Trading Co. 221 ITR 110 besides host of various Tribunal decisions which are already enumerated in the impugned order. Therefore, the penalty was deleted. Aggrieved, the revenue is in further appeal before us.