Penalty Deleted as Addition Was Based on Estimation

ITO Vs Spark Diamonds (ITAT Mumbai) ITAT Mumbai Deletes Penalty on Estimated Bogus Purchase Addition; Revenue Appeal Dismissed The Mumbai Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal in the case of Spark Diamonds for AY 2007–08, thereby upholding the order of the CIT(A) which had deleted the penalty levied under Section 271(1)(c). During the assessment, the Assessing Officer had made an estimated addition of 6% (₹1.35 lakh) on alleged bogus purchases of ₹22.61 lakh, and consequently levied a penalty of ₹41,940 (100% of tax sought to be evaded) for furnish...