ITO -5 (1)(2), MUMBAI vs. BHUWAL INSULATION CABLE PVT. LTD., MUMBAI

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ITA 5645/MUM/2018Status: DisposedITAT Mumbai15 January 2020AY 2011-123 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 upheld the deletion of penalty by the CIT(A). The penalty was deleted because the addition on which it was based was made on an estimated basis.

What were the facts?

The Revenue appealed the deletion of penalty imposed under Section 271(1)(c) for bogus purchases. The addition for bogus purchases was made on an estimated basis by the Assessing Officer.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on an addition made on an estimated basis for 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, “B”, BENCH

Before: SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM

For Respondent: Ms. Kavita P Kaushik
Hearing: 08/01/2020Pronounced: 15/01/2020

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-10, Mumbai in appeal No.CIT(A)-10, Mumbai/10921/2016-17 dated 01/06/2018 (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 the Áct’).

M/s. Bhuwal Insulation Cable Pvt. Ltd.,

2.

The only issue to be decided in this appeal of the revenue is as to whether the ld. CIT(A) was justified in deleting the levy of penalty u/s.271(1)(c) of the Act in respect of disallowance made on account of bogus purchases on estimated basis.

3.

None appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. We find that the assessment was completed u/s.143(3) r.w.s. 147 of the Act on 19/02/2016 wherein the addition was made on account of bogus purchases. Penalty proceedings u/s.271(1)(c) of the Act were initiated on 29/07/2016 for the same and penalty was levied for Rs.84,744/- by the ld. AO. We find that the addition made on account of bogus purchases was made on estimated basis @12.5% on the value of alleged purchases. We find that the ld. CIT(A) had deleted the penalty on the ground that penalty was levied on addition which was made on an estimated basis. This fact is not in dispute before us. We find that the ld. CIT(A) had also placed reliance on the decision of this Tribunal in the case of Deepak Gogri vs. ITO in dated 23/11/2017 among other decisions to support the said proposition. We do not find any infirmity in the said reasoning of the ld. CIT(A) in 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 15/01/2020

Sd/- Sd/- (MAHAVIR SINGH) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER

M/s. Bhuwal Insulation Cable Pvt. Ltd.,

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