ITO 29 (1)(1), MUMBAI vs. ANJANA VIVEK NAGARAJAN, MUMBAI

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ITA 5796/MUM/2018Status: DisposedITAT Mumbai15 January 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 since the quantum addition for bogus purchases was made on an estimated basis, the penalty levied thereon would not survive. The CIT(A)'s deletion of the penalty was found to be justified.

What were the facts?

The Assessing Officer made an addition on account of bogus purchases on an estimated basis. Subsequently, penalty proceedings under Section 271(1)(c) were initiated and a penalty was levied. The CIT(A) deleted the penalty.

What were the issues?

Whether the deletion of penalty under Section 271(1)(c) by the CIT(A) was justified when the original addition was made on an estimated basis.

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, “A”, BENCH

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

For Respondent: Shri Michael Jerald
Hearing: 08/01/2020Pronounced: 15/01/2020

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-39, Mumbai in appeal No.CIT(A)-39/IT-10356/16-17 dated 29/06/2018 (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’).

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 09/03/2016 wherein the addition was made on account of bogus purchases. Penalty proceedings u/s.271(1)(c) of the Act were initiated on 23/09/2016 for the same and penalty was levied for Rs.20,775/- 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 since the quantum addition was made on estimate, concealment penalty levied thereon would not survive. This fact is not in dispute before us. We find that the ld. CIT(A) had also placed reliance on the decision of Hon’ble Punjab and Haryana High Court in the case of Harigopal Singh vs. CIT reported in 254 ITR 85 ( P & H) 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

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