Sponsored
    Follow Us:

Case Law Details

Case Name : Mukesh Shaligram Sharda Vs ITO (ITAT Mumbai)
Appeal Number : ITA.No.1907.&.1908/Mum/2021
Date of Judgement/Order : 22/02/2023
Related Assessment Year : 2019-2020
Become a Premium member to Download. If you are already a Premium member, Login here to access.
Sponsored

Mukesh Shaligram Sharda Vs ITO (ITAT Mumbai)

If sales are not disputed, entire alleged bogus purchases cannot be disallowed and only the gross profit on the alleged purchases to be disallowed. No penalty under section 271(1)(c) is leviable on estimated additions.

It is undisputed fact that impugned penalty was levied only on estimated addition. The Assessing Officer had made addition of entire bogus purchases, however, did not doubt the sales made against such purchases. We observe that the Tribunals in various decisions have held that where sales are not disputed, entire alleged bogus purchases cannot be disallowed and only the gross profit on the alleged purchases to be disallowed. After taking into consideration the various decisions of the Tribunal that no penalty under section 271(1)(c) is leviable on estimated additions and also after taking into consideration the decision of Hon’ble Rajasthan High Court in the case of CIT vs Krishi Tyre Retreading & Rubber Industries 360 ITR 580; the decision of Hon’ble Punjab & Haryana High Court in the case of CIT vs Sangrur Vanaspati Mills Ltd 303 ITR 53 (P&H); and the decision of Hon’ble Gujarat High Court in the case of CIT vs Subhsh Trading Co Ltd 221 ITR 110 (Guj), we direct the Assessing Officer to delete the impugned penalty levied on estimated addition. Therefore, the appeal of the assessee is allowed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

These appeals filed by the assessee are directed against the two different orders of the Commissioner of Income-tax (Appeal)-2, Thane [hereinafter called, Ld.CIT(A)] dated 26/10/2016 and order of the National Faceless Appeal Centre (NFAC), Delhi dated 21/09/2021 for the assessment years 2011-12 and 2010-11, respectively. Since common issue on identical facts is involved in both these appeals, therefore, for the sake of convenience, ITA No.1907/Mum/2021 is taken as lead case for adjudicating this appeal and finding therein will be applicable to the other appeal filed by the assessee.

Please become a Premium member. If you are already a Premium member, login here to access the full content.

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Search Post by Date
July 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031