ITAT Mumbai: Penalty U/s 271(1)(c) Deleted – Estimated Bogus Purchase Addition Cannot Trigger Penalty

R. J. Corporation Vs ITO (ITAT Mumbai) In the ITAT Mumbai allowed the assessee’s appeals and deleted penalties levied u/s 271(1)(c) for A.Ys. 2010-11 & 2011-12, holding that penalty cannot survive where additions are purely based on estimation of profit from alleged bogus purchases. The assessee firm was subjected to reassessment based on Sales Tax Department information alleging accommodation purchase bills. The AO rejected books u/s 145(3) and estimated profit at 12.5% on such purchases instead of disallowing them fully, after which penalty was levied for concealment/inaccurate particu...