Section 271(1)(c) Penalty Deleted Because Addition Was Based on Estimated Bogus Purchases

ITO Vs In Coach Builders (ITAT Mumbai)

In ITO vs In Coach Builders, the Income Tax Appellate Tribunal held that penalty under Section 271(1)(c) of the Income-tax Act cannot be levied when the quantum addition itself is made purely on an estimated basis. The assessee’s reassessment was initiated based on information alleging bogus purchases, and the Assessing Officer added 20% of such purchases under Section 69 as unexplained expenditure. The addition was upheld by the CIT(A) but later reduced to 15% by the Tribunal in quantum proceedings, reflecting its estimated

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