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| The Tax Publishers2020 TaxPub(DT) 4522 (Mum-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where no clinching material has been brought on record by the revenue which could disprove the authenticity of the purchases claimed by the assessee to have been made from the parties, no penalty under section 271(1)(c) thus could have been validly imposed upon it.
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Penalty under section 271(1)(c) - Furnishing of inaccurate particulars of income or Concealment - Bogus purchases - No clinching material to disprove the authenticity of the purchases
AO on the basis of information received from the Sales Tax Department, held that assessee had obtained accommodation entries in the form of purchases from certain bogus concerns which were in the business of providing bills without delivery of goods, etc. in exchange of cash or commission basis. Thus, he imposed penalty under section 271(1(c).Held: As the revenue had failed to disprove to the hilt on the basis of clinching evidence the authenticity of the claim of the assessee of having made purchases from the bogus parties, therefore, merely on the basis of the unproved claim of purchases no penalty under section 271(1)(c) could have been validly imposed on the assessee. In fact, the restriction of the disallowance of entire purchases made by the assessing officer to 96% of the aggregate value of such purchases by CIT(A), speaks for itself that the disallowance sustained in the hands of the assessee is merely backed by a process of estimation and not based on any concrete evidence. Hence, penalty levied was required to be deleted.
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2009-10 & 2010-11
IN THE ITAT, MUMBAI BENCH
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