Ramprakash Vijayvergia Vs ITO (ITAT Surat)
Summary: The Surat Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal against the order of the National Faceless Appeal Centre, Delhi, which had confirmed a penalty of Rs. 18,42,620 under Section 271(1)(c) of the Income-tax Act, 1961 for Assessment Year 2012-13. The penalty had been levied by the Assessing Officer vide order dated 09/03/2018.
The assessee, engaged in the business of trading, manufacturing, importing and exporting of diamonds, had filed its return for AY 2012-13 on 14/08/2012 declaring total income of Rs. 3,43,200. During assessment proceedings, the Assessing Officer referred to a search conducted by the Investigation Wing, Mumbai, on the Bhanwarlal Jain Group on 03/10/2013. According to the Assessing Officer, evidence relating to benami concerns managed by the group and accommodation entries had been found, and the assessee was one of the beneficiaries.
The Assessing Officer treated purchases of Rs. 4.98 crores shown from Ankita Exports and Megha Gems as ingenuine/bogus purchases and made an addition. In quantum proceedings, the CIT(A), vide order dated 17/02/2017, restricted the disallowance to Rs. 62,34,360, representing 12.5% of the disputed purchases. Following the quantum order, the Assessing Officer issued a show-cause notice dated 30/01/2018 and, after recording that the assessee neither attended nor filed a reply, levied penalty at 100% of the tax sought to be evaded on the addition sustained by the CIT(A), computing the penalty at Rs. 18,42,620.
