INCOME TAX OFFICER 29(2)(5), MUMBAI vs. SHRI PRAKASH DEVSHANKAR THAKKAR, MUMBAI

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ITA 5554/MUM/2018Status: DisposedITAT Mumbai14 February 2020AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that penalty is not imposable when the quantum addition was made on an estimated basis. If the addition is based on estimation or the statement of another person, it is suitable for quantum addition but not for penalty.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c) of the Income Tax Act. The penalty was imposed on an addition made towards the profit element of alleged bogus purchases.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable on additions made on an estimated basis for alleged bogus purchases.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C”, BENCH

For Respondent: Shri Kumar Padmapani Bora
Hearing: 06/02/2020Pronounced: 14/02/2020

आदेश / O R D E R

PER M. BALAGANESH (A.M):

1.

This appeal in A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-40, Mumbai in appeal No.CIT(A)-40/ITBA-10764/2016-17 dated 25/06/2018

Shri Prakash Devshankar Thakkar (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961.

2.

The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in quashing the penalty levied u/s.271(1)(c) of the Act in respect of addition made towards profit element of alleged bogus purchases.

3.

None appeared on behalf of the assessee and no petition for adjournment was made on behalf of the assessee. Accordingly, we proceed to hear the ld. DR and dispose the appeal based on the materials available on record. We find that the addition was made towards profit element on bogus purchases in the sum of Rs.1,59,292/- in the assessment completed u/s.143(3) r.w.s. 147 of the Act dated 16/03/2016. Pursuant to this addition, penalty u/s.271(1)(c) of the Act vide order dated 25/09/2016 in the sum of Rs.47,788/- being 100% of tax sought to be evaded on the addition of Rs.1,59,292/-. The ld. CIT(A) deleted the penalty u/s.271(1)(c) of the Act by placing reliance on the Co-ordinate Bench decision of this Tribunal in the case of ITO vs. Etco Telecom Ltd for A.Yrs 2004-05 and 2005-06 in 5998 & 5999/Mum/2012 dated 17/12/2014 wherein it was held that penalty is not imposable when the quantum addition was made on estimated basis. The said decision also held that if the whole addition was made based on estimation or on the basis of statement of another person that no actual sales were made, it may be a good case for quantum addition but not for imposition of penalty. The existing case before us squarely falls into the ratio laid down by this Tribunal in the case referred to supra which has been rightly followed by the ld. CIT(A) in our considered opinion. Hence, we do not Shri Prakash Devshankar Thakkar find any infirmity in the order passed by the ld. CIT(A) deleting the penalty. Accordingly, the grounds raised by the revenue are dismissed.

4.

In the result, appeal of the revenue is dismissed. Order pronounced in the open court on this 14/02/2020

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