Case Law Details
Sawailal Bhatti Vs ITO (ITAT Mumbai)
ITAT find that the assessee had filed all the details of purchases and corresponding sales had not been doubted. The sources of purchases are from the books and overall trading results have been accepted. Only allegation is that assessee has taken accommodation bills for the purchase of items to suppress the profits. Once, the addition has been made on adhoc and estimate which has been reduced by the Tribunal, then it cannot be held that there is any concealment of income so as to warrant any penalty u/s 271(1)(c), Accordingly, on merits the penalty is deleted.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The aforesaid appeals have been filed by the assesses against separate impugned order of even date, 19.10.2022 in relation to the penalty proceedings u/s 271 (1)(c) for the AY 2009-10, 2010-11 & 2011-12. On merits facts and issues involved in all the three appeals are common arising out of identical set of facts and findings, therefore, same were heard together and appeal is disposed of by way of the consolidated order. In all the year the penalty has been levied on account of adhoc addition of GP rate on bogus purchases.
2. In the assessment order, the addition have been made by the AO on the basis of certain information received from Sales Tax authorities that assessee had made purchases from various suspicious parties. The Assessing Officer accordingly applied GP rate on adhoc basis at the rate of 12.5% of the bogus purchases and same was also confirmed by the Ld. CIT (Appeals). In Tribunal, in the quantum proceedings for the AY 2009-10 & 2011-12, the Tribunal has reduced the addition by holding that GP rate of 5% should be estimated. Accordingly, the disallowance has restricted to 5% while order dated 10.02.2023 pass in ITA No. 3189 & 3193/Mum/2022. In so far as, appeal for AY 2010-11 is concerned the same has been stated to be pending, even though hearing was concluded on 09.03.2023.
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