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The Tax PublishersITA No. 3295/Mum/2019
2020 TaxPub(DT) 5337 (Mum-Trib)INCOME TAX ACT, 1961
Section 271(1)(c)
Where addition in the income was made on estimate basis that itself does not lead to the conclusion that the assessee either concealed the particulars of his income or furnished inaccurate particulars of such income, therefore, provisions of section 271(1)(c) were not attracted.
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Penalty under section 271(1)(c) - Bogus purchases - Addition made on basis of estimation -
AO made addition vide assessment order passed under section 143(3) read with section 147 on account of bogus purchases. AO made addition to the extent of 12.5% of the total bogus purchases. AO, thereafter, initiated penalty proceedings and levied penalty under section 271(1)(c). CIT(A) deleted the penalty holding that no penalty can be levied on addition made on estimate basis. Held: A perusal of the penalty order revealed that addition in respect of bogus purchases was made on mere estimations. It is a well-settled legal position that no penalty can be levied on estimated additions. Where the addition in income was made on estimate basis that itself does not lead to the conclusion that assessee either concealed the particulars of his income or furnished inaccurate particulars of such income. Thus, where addition was made merely on estimation, the provisions of section 271(1)(c) were not attracted.
Relied:Harigopal Singh v. CIT (2002) 258 ITR 85 (P&H-HC) : 2002 TaxPub(DT) 1625 (P&H-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
IN THE ITAT, MUMBAI BENCH
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