Shanti Prime Publication Pvt. Ltd.
Sec. 271(1)(c) of Income Tax Act, 1961— Penalty — Revenue filed appeal against the order of CIT (Appeals) dated 03.12.2018 for the assessment year 2010-2011. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) was
justified in deleting the penalty levied u/s--271(1)(c) without appreciating the fact that there was a definite finding in the assessment order in respect of bogus purchases and of furnishing inaccurate particulars of income relating to purchases resulting into concealment of income.That the assessee an individual engaged in the business of “Trade of hardware and electrical items” and filed return of income on 12.10.2010. Assessment was reopened u/s. 147 of the Act and reassessment was completed on 23.02.2015 u/s. 143(3) r.w.s 147 of the Act determining the income at Rs.8,05,340/-. While completing the reassessment the Assessing Officer treated the purchases of Rs.5,22,838/- made from various dealers as non-genuine on the basis of the information received from Sales Tax Department, Mumbai that assessee has received accommodation entries from those parties’ without making any purchases but made purchases only in gray market. The Assessing Officer treated such purchases from various parties as non-genuine as the assessee could not produce the parties and also could not establish the movement of goods. Further, the notices issued to the parties u/s. 133(6) of the Act were also returned unserved. Thus, the Assessing Officer estimated the profit element from the non-genuine purchases at 12.5% and brought to tax. Assessing Officer initiated the penalty proceedings and levied penalty u/s. 271(1)(c) of the Act stating that the assessee has y furnished inaccurate particulars of income thereby concealed its true and correct income within the meaning of section 271(1)(c) of the Act. On appeal the Ld.CIT(A) deleted the penalty. Against this order of the Ld.CIT(A), revenue filed appeal.
Held thatthe Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer. Grounds raised by the revenue are rejected. Appeal of the revenue was dismissed ---ITO vs. SHRI JIGNESH AMRUTLAL SHAH. 23 ITCD Online 35 (MUM)