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| The Tax Publishers2020 TaxPub(DT) 3186 (Mum-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Merely suspicion or doubt cannot be the basis for levying penalty under section 271(1)(c) either for concealment of particulars of income or for furnishing of inaccurate particulars of income and once there was no reason to disbelieve the sales made by assessee, particularly when part of material was recorded in stock, it cannot be justified that the estimation made by AO warrants penalty under section 271(1)(c), therefore, penalty was deleted.
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Penalty under section 271(1)(c) - Disallowance of bogus purchases by applying the profit rate - Furnishing of inaccurate particulars of income and concealment of particulars of income -
AO imposed penalty under section 271(1)(c) for furnishing of inaccurate particulars of income and concealment of particulars of income on the issue of disallowance of bogus purchases by applying the profit rate. CIT(A) deleted the penalty levied by AO. Held: There was no finding recorded by AO that there was actual concealment of income by assessee. Merely suspicion or doubt cannot be the basis for levying penalty under section 271(1)(c) either for concealment of particulars of income or for furnishing of inaccurate particulars of income. Once there was no reason to disbelieve the sales made by assessee and particularly when part of material is recorded in stock, it cannot be justified that estimation made by AO warrants penalty under section 271(1)(c). It can be a case of addition or disallowance of bogus purchases on estimate basis but it cannot be a case of levy of penalty for concealment of income under section 271(1)(c). Therefore, penalty under section 271(1)(c) was deleted.
Followed:MAK Data (P) Ltd. v. CIT 2013 TaxPub(DT) 2358 (SC)Relied:Pr. CIT v. Goa Coastal Resorts and Recreation (P) Ltd. 2020 TaxPub(DT) 0081 (Bom-HC) Pr. CIT v. New Era Sova Mine 2019 TaxPub(DT) 6063 (Bom-HC) CIT v. Shri Samson Perinchery 2017 TaxPub(DT) 0672 (Bom-HC) CIT v. Zoom Communication (P) Ltd. (2010) 40 DTR 249 (Del) : 2010 TaxPub(DT) 1957 (Del-HC) BA Balasubramaniam & Bros. Co. v. CIT (1991) 116 Taxman 842 (SC) : 1999 TaxPub(DT) 0384 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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