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

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.

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.

In the result, appeal of the revenue is dismissed.