|The Tax Publishers2021 TaxPub(DT) 0667 (Mum-Trib)
INCOME TAX ACT, 1961
Where AO and CIT (A) adopted different estimates in assessing the income of assessee; it could not be said that the assessee concealed the particulars of its income so as to attract provisions of section 271(1)(c) and accordingly, the penalty levied under section 271(1)(c) was liable to be deleted.
Penalty under section 271(1)(c) - Leviability - Disallowance on account of bogus purchases -
AO made disallowance on account of bogus purchases. Subsequently, CIT(A) restricted the said disallowance to 12.5% of disputed purchases. Thereafter, the AO levied a penalty under section 271(1)(c) on account of concealment of income by assessee-company. Against the penalty, assessee filed an appeal before the CIT(A) and the CIT(A) deleted such penalty. Aggrieved, Revenue was in appeal. Held: In response to show cause notice during course of penalty proceedings, the assessee filed a reply stating that it submitted copy of ledger account, bills of concerned parties, bank statements, etc., to prove genuineness of purchases. It was further stated before the AO that during the relevant year, the assessee had no transaction with the said parties and therefore, it was not able to produce them before the AO. Further, the amount in respect of which the penalty was imposed by the AO was based on estimate. Further, the AO failed to bring any concrete evidence to prove that the said amount actually represented income in respect of which inaccurate particulars had been furnished by the assessee. Furthermore, since the AO and the CIT (A) adopted different estimates in assessing income of the assessee; it could not be said that the assessee concealed the particulars of its income so as to attract provisions of section 271(1)(c). Accordingly, the penalty levied under section 271(1)(c) was deleted.
Distinguished:ITO v. Bhansali Trading Corporation [ITA No. 735/JP/2012, dt. 5-6-2015] : 2015 TaxPub(DT) 3514 (Jp-Trib) .
REFERRED : Harigopal Singh v. CIT 2002 TaxPub(DT) 1625 (P&H-HC).
FAVOUR : In assessee's favour
A.Y. : 2009-10
IN THE ITAT, MUMBAI BENCH
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