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| The Tax Publishers2020 TaxPub(DT) 4550 (Mum-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where addition was sustained on the estimated basis, no penalty under section 271(1)(c) can be levied on the estimated income, therefore, AO was directed to delete the penalty imposed under section 271(1)(c).
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Penalty under section 271(1)(c) - Bogus purchases - Addition made on the basis of estimation of income -
AO received information from DGIT (Inv.) that assessee had entered into bogus purchases transactions from certain persons, who provides bogus bills as per the information of Sales Tax Department and assessee was one of the beneficiaries and had obtained bills from five entities. AO considering the facts and details submitted by assessee has dealt on disputed issue and relied on judicial decisions and estimated the income at 12.5% of bogus purchases. Subsequently, AO initiated proceeding under section 271(1)(c). Held: As decided in assessee's own case [[ITA No. 5556/Mum./2018, dt. 13-3-2020]] AO has made disallowance of bogus purchases but has accepted the sales in the books of account, and whereas as directed AO to disallow 12.5% of Bogus purchases. Where the addition was sustained on the estimated basis, no penalty under section 271(1)(c) can be levied on the estimated income. Accordingly, AO was directed to delete the penalty.
Followed:Tarlika K. Shah v. ITO [ITA no. 5556/Mum./2018, dt. 13-3-2020].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, MUMBAI BENCH
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