AJAY LOKNATH LOHIA, MUMBAI V. ITO 25(2)(1), MUMBAI

ITA 2998/MUM/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0902 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HIMANSHU SHARMA
• Assessee Lawyers: AJAY R SINGH
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

1 ITA 2998/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI JOGINDER SINGH(JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.2998 /MUM/2017 (ASSESSMENT YEAR: 2009-10) SHRI AJAY LOKNATH LOHIA 62, SHANGRILA, SAMARTH RAMDEVI MARG, JUHU SCHEME, VILE PARLE (W) MUMBAI 400 049 PAN: AAAPL6294M VS ITO 25(2)(1), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI AJAY R SINGH RESPONDENT BY SHRI HIMANSHU SHARMA DATE OF HEARING 26-09-2018 DATE OF PRONOUNCEMENT 05-10-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST ORDER OF THE CIT(A)-37, MUMBAI DATED 03-02-2017 AND IT PERTAINS TO AY 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ASSESSMENT YEAR 2009-10 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 37, MUMBAI GENERAL: 1. ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER THAT PENALTY LEVIED ON YOUR APPELLANT IS IN ORDER. PENALTY U/S 271(L)(C) OF RS.3.40.980A 2. FAILED TO APPRECIATE THAT THERE IS NEITHER CONC EALMENT OF PARTICULARS OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE PENALTY IMPOSED UNDER SECTION 271(L)(C) IS BAD IN LAW. 2 ITA 2998/MUM/2017 3. ERRED IN IGNORING THE FACTS THAT ADDITION IS MA DE ONLY ON ESTIMATED BASIS ON ACCOUNT OF DIFFERENCE IN GROSS MARGINS EARNED FROM SALE AGAINST PURCHASE FROM PARTY ALLEGED TO BE NON-GENUINE. AN ADDITION W HICH IS MADE PURELY ON AN ESTIMATE BASIS, IT CANNOT BE SAID THERE IS CONCEALM ENT OF INCOME. 4. THE ID CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER IMPOSING PENALTY UNDER SECTION 271(L)(C) WITHOUT APPRECIATIN G THAT THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER DATED 08/03/2015 IS DEFECTIVE. WITHOUT PREJUDICE TO ABOVE 5. ERRED IN IGNORING THE FACT THAT THE ASSESSEE HA S SUFFERED LOSS IN THE RELEVANT YEAR AND EVEN AFTER THE ADDITION THE INCOM E ASSESSED WAS LOSS RS.28,49,154/-. AS SUCH THERE WAS NO LOSS TO REVENU E, THEREFORE NO PENALTY OUGHT TO HAVE BEEN LEVIED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF TRADING IN CHEMICALS AND ALSO DEALING IN SHARES & SECURITIES, FILED HIS RETURN OF INCOME FOR AY 2009-10 ON 30-09- 2009 DECLARING TOTAL INCOME OF RS.15,90,000. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF T HE INCOME-TAX ACT, 1961 DETERMINING THE TOTAL INCOME AT RS.15,90,000 B Y MAKING ADDITION TOWARDS 25% GROSS PROFIT ON ALLEGED BOGUS PURCHASE MADE FROM HAWALA DEALERS. THEREAFTER, THE AO INITIATED PENALTY PROC EEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE LEVIED PENALTY OF RS.3,40,980 WHICH IS 100% TAX SOUGHT TO BE EVADED ON THE GROUND THAT THE ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION WITH REGARD TO THE ALLEGED BOGUS PURCHASES MADE FROM HAWALA DEALERS. THE RELEVANT O BSERVATIONS OF THE AO IS EXTRACTED BELOW:- 5. THE SUBMISSIONS MADE BY THE ASSESSEE ARE CONSID ERED CAREFULLY. HOWEVER, THE SAME IS NOT ACCEPTABLE. AS PER THE PROVISIONS OF IT. ACT, 1961 THE ONUS OF PROVING THE GENUINENESS AND REASONABLENESS OF THE TRANSACTION CARRIED OUT BY TH E ASSESSEE LIES ON THE ASSESSEE ITSELF. THEREFORE, DURING THE SCRUTINY PROCEEDINGS, ASSESSE S WAS ALSO ASKED TO SUBSTANTIATE THE 3 ITA 2998/MUM/2017 GENUINENESS OF THE TRANSACTION SO CLAIMED. TO KNOW THE GENUINENESS OF THE TRANSACTIONS MADE BY THE ASSESSEE, NOTICE U/S 133(6) OF THE L.T. ACT, 1961 WERE ISSUED TO HAWALA PARTIES CALLING FOR CERTAIN INFORMATION. HOWEVER, THE NOTICE WERE R ETURNED BACK UNSERVED WHICH MADE IT EVIDENT THAT THE PARTIES IS NOT EXISTENCE IN THE PR ESENT ADDRESS. THE AR COULD NOT GIVE THE LATEST ADDRESS/WHEREABOUTS OF PURCHASE PARTIES, THE BANK STATEMENT OF THE HAWALA PARTIES. ALSO, THE ASSESSEE COULD NOT PRODUCE THE SO CALLED SUPPLIERS BEFORE THE ASSESSING OFFICER FOR VERIFICATION. MOREOVER, THE HAWALA PARTIES HAD ADMI TTED IN FRONT OF THE SALES TAX DEPARTMENT THAT THEY HAVE NOT MADE ANY SALES OR PURCHASE TRANS ACTIONS. THUS UNDISPUTED FACT WAS THAT PURCHASES CLAIMED TO HAVE BEEN MADE FROM ABOVE PART IES REMAINED UNVERIFIED. THE ASSESSEE SUPPRESSED INCOME, INSPIRE OF KNOWING VERY WELL THA T THE SAME ARE DULY REQUIRED TO BE OFFERED FOR TAXATION. HENCE, IT CANNOT BE SAID THAT THE ASS ESSEE HAS NOT FURNISHED INACCURATE PARTICULARS IN THIS REGARD. IN ORDER TO PROVE THE GENUINENESS O F THE SAME, THE ASSESSEE COULD HAVE BROUGHT ON RECORD ANY EVIDENCE OR RECONCILIATION DULY AUTHE NTICATED FROM SUCH PARTIES TO VERIFY THE AMOUNTS AS PER ITS BOOKS AS CORRECT AND GENUINE. TH E DETAILS SUPPLIED IN THE RETURN OF INCOME ARE THUS PROVED TO BE ARE NOT ACCURATE, NOT EXACT O R CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. THE WRONGFUL CLAIMS IN RESPECT OF THE AB OVE ITEMS HAVE BEEN DETECTED AND ADDED IN THE TOTAL INCOME ONLY AFTER RECEIPT OF INFORMATION. HAD THE INFORMATION NOT BEEN RECEIVED AND THE NECESSARY INVESTIGATIONS/ENQUIRIES WERE NOT DON E BY THE ASSESSING OFFICER, THE WRONGFUL CLAIM BY THE ASSESSEE IN RESPECT OF THE ABOVE BOGUS PURCHASES WOULD HAVE GONE UNDETECTED AND THE ASSESSEE WOULD HAVE SUCCEEDED IN CONCEALING HIS INCOME TO THE EXTENT OF RS.10,03,180/-. THUS, THE ASSESSEE HAS NOT ONLY FURNISHED INACCURATE PART ICULARS OF INCOME T HEREBY CONCEALING THE PARTICULARS OF ITS INCOME BUT ALSO FAILED TO FURNISH EXPLANATION IN SUPPORT OF ITS CLAIM OF HAWALA PURCHASES. 6. SECTION 271(1 )(C) OF THE ACT PROVIDES FOR THE L EVY OF PENALTY IN CASES WHERE THE AO IS SATISFIED THAT ANY PERSON HAD CONCEALED PARTICULARS OF HIS INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ALSO, EXPLANATION I TO SECTION 271(1) PROVIDES THAT WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON, SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS ON EXPLANAT ION WHICH IS FOUND TO BP FALSE OR HE OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AN D FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE MID THAT ALL THE FACTS RELATING TO THE SAM E AND ARE MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF THE PERSON, HAVE BEEN DISCLOSED BY HIM, THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TOTAL INCOME OF SUCH PERSON, AS A RESU LT THEREOF, SHALL FOR THE PURPOSE OF CLAUSE (C) BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THUS, IN A>SE OF FAILURE OF THE ASSESSEE LO OFFER A NY EXPLANATION OR EXPLANATION FURNISHED BY HIM BEING FOUND FALSE, PENALTY CAN BE IMPOSED. THER EFORE, THE PENALTY IS WARRANTED IN THE CIRCUMSTANCES. THEREFORE, THE ASSESSES HAS TO BE DE EMED TO HAVE CONCEALED IT'S INCOME BY FILING INACCURATE PARTICULARS OF ITS INCOME, FOR TH E PURPOSE OF SECTION 271(L)(C). 7. IN VIEW OF THE ABOVE DISCUSSION, I, THEREFORE, HOLD THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF ITS INCOME AS ENVISAGED B Y SECTION 271(L)(C) OF THE INCOME-TAX ACT I9DL, IN RESPECT OF AMOUNT OF US . 10,03,L80/-. 8. THE TOTAL AMOUNT FOR WHICH THE ASSESSEE IS DEEME D TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME WORKED OUT LO RS 10,03,180/-. TAX PAYABLE ON THIS AMOUNT WORKS OUT TO RS 3,40,980/- (INCLUDING CESS). THE MINIMUM PENALTY LE VIABLE UNDER SECTION 271(L)(C) IS 100% OF THE TAX SOUGHT TO BE EVADED' AND MAXIMUM PENALTY L EVIABLE IS 300% OF THE 'TAX SOUGHT TO BE EVADED'. CONSIDERING THE FACTS OF THE CASE, I PROPO SE TO LEVY MINIMUM PENALTY BEING'100% OF 'TAX SOUGHT TO BE EVADED' WHICH WORKS OUT TO RS.3,4 0,980/-. DEMAND NOTICE IS ISSUED. 3. AGGRIEVED BY THE PENALTY ORDER THE ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS WHICH HAS BEEN REPRODUCED AT PA RA 4 ON PAGES 3-10 4 ITA 2998/MUM/2017 OF CIT(A)S ORDER. THE SUM AND SUBSTANCE OF ARGUME NTS OF THE ASSESSEE BEFORE THE LD.CIT(A) ARE THAT MERE DISALLO WANCE OF GROSS PROFIT EMBEDDED IN ALLEGED BOGUS PURCHASES DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH WARRANTS LEV Y OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE FURTHER SUBMITT ED THAT ALTHOUGH HE HAS NOT FILED APPEAL AGAINST ADDITION MADE BY THE A O BEFORE CIT(A), BUT FACT REMAINS THAT SUCH ADDITION HAS BEEN MADE ON ES TIMATE BASIS IGNORING ALL EVIDENCES FILED BY THE ASSESSE TO PROV E PURCHASES FROM ABOVE PARTIES AS GENUINE. THE LD.CIT(A), AFTER CON SIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO BY RELYING UPO N CERTAIN JUDICIAL PRECEDENTS, INCLUDING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ZOOM COMMUNICATIONS PVT LTD REPORTED IN 327 ITR 510 (DEL) HELD THAT THE ASSESSEE HAS FAILED TO OFFER AN Y EXPLANATIONS IN RESPECT OF ADDITION MADE BY THE AO TOWARDS ALLEGED BOGUS PURCHASES FROM HAWALA OPERATORS. THEREFORE, HE OPINED THAT T HE AO WAS RIGHT IN LEVYING PENALTY U/S 271(1)(C) FOR FURNISHING INACCU RATE PARTICULARS OF INCOME. THE RELEVANT OBSERVATIONS ARE AS UNDER:- 5.9 THE O COMPLETED THE ASSESSMENT FOR THE RELEVA NT AY AND INITIATED PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME, '''HE AO HAD RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THROUGH C3I T(INV), MUMBAI THAT THE APPELLANT HAD OBTAINED BOGUS PURCHASE BILLS OF RS. 38,92,720/- FRO M VARIOUS HAWALA DEALERS DURING THE RELEVANT AY. THE AO HAS THEREFORE MADE ADDITIONS OF RS. 10,03,ISO/- TO THE TOTAL INCOME OF THE APPELLANT BEING BOGUS PURCHASES. THE AO HAS STA TED THAT THE APPELLANT COULD NOT SUBSTANTIATE THE GENUINENESS OF THE PURCHASE TRANSA CTIONS AND COULD NOT PRODUCE THE SUPPLIERS BEFORE THE ASSESSING OFFICER FOR VERIFICA TION. MOREOVER, THE HAWALA PARTIES HAD ADMITTED IN FRONT OF THE SALES TAX DEPARTMENT THAT T HEY HAVE NOT MADE ANY SALES OR PURCHASE TRANSACTIONS. THE AO HAS THUS CONCLUDED THAT THE AP PELLANT HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND HAS LEVIED PENALTY OF RS. 3,40,980/- U/S 271(L)(C) OF THE ACT. IT CAN SAFELY BE HELD THAT WHERE IN RESPECT OF ANY FACT S MATERIAL TO THE COMPUTATION OF THE TOTAL 5 ITA 2998/MUM/2017 INCOME OF ANY PERSON UNDER THE ACT, SUCH PERSON FAI LS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE OFFICERS OF THE IN COME-TAX TO BE FALSE, OR SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 6. THEREFORE AFTER CONSIDERING THE FACTS OF THE CAS E, SUBMISSIONS MADE BY THE APPELLANT AND THE JUDICIAL DECISIONS CITED ABOVE, I FIND THAT THE PENALTY LEVIED IS IN ORDER AND THE SAME IS UPHELD. ACCORDINGLY THE GROUNDS RAISED BY T HE APPELLANT ARE REJECTED. 4. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD .CIT(A) WAS ERRED IN CONFIRMING PENALTY LEVIED BY THE AO WITHOUT APPR ECIATING THE FACT THAT THE ADDITION MADE BY THE AO IS ONLY ON ESTIMATE BAS IS; HENCE, IT CANNOT BE CONSIDERED AS DELIBERATE ATTEMPT TO EVADE TAX. THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL EVIDE NCES AND NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INC ORRECT. THEREFORE, THE ASSESSEE CANNOT BE HELD TO BE GUILTY OF CONCEALING OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE ASSESSEE HAS FILED VARIOUS DETAILS TO JUSTIFY PURCHASES FROM ABOVE PARTIES, BUT THE AO HAS IGNORED ALL EVIDENCES ONLY ON THE BASIS OF R EPORT RECEIVED FROM SALES-TAX DEPARTMENT. THOUGH THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST ADDITION MADE BY THE AO, BUT SUCH ADDITION IS ON THE BASIS OF ESTIMATION OF GROSS PROFIT. MERE FACT THAT THE ASS ESSEE HAS NOT PREFERRED APPEAL MAY NOT BE A GROUND TO HOLD THE ASSESSEE GUI LTY OF FURNISHING INACCURATE PARTICULARS OF INCOME. 5. THE LD.DR, ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDER OF LD.CIT(A). 6 ITA 2998/MUM/2017 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE AO HAS LEVIED PENALTY U/S 271(1)(C) ON THE GROUND THAT THE ASSESSEE FAILED TO OFFER ANY EXPLANATION TO THE SATISFACTION OF THE AO IN RESPECT OF ESTIMATION OF GROSS PROFIT ON ALLEGED BOGUS PURCHASES IN THE LIGHT OF FACTS GATHERED DURING THE COURSE OF ASSESS MENT PROCEEDINGS COUPLED WITH REPORT OF SALES-TAX DEPARTMENT. ACCOR DING TO THE AO, THE PURCHASES FROM CERTAIN PARTIES WERE NOT GENUINE WHI CH IS EVIDENT FROM THE FACT THAT THE ASSESSEE FAILED TO FURNISH COMPLE TE DETAILS OF PURCHASES FROM THE ABOVE PARTIES. THE ASSESSEE ALSO FAILED T O PRODUCE THE PARTIES IN PERSON BEFORE THE AO. THEREFORE, HE OPINED THAT IT IS A CLEAR CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME WHIC H WARRANTS LEVY OF PENALTY U/S 271(1)(C) AND ACCORDINGLY LEVIED PENALT Y UNDER EXPLANATION 1 TO SECTION 271(1)(C). 7. THE ASSESSEE HAS NOT CHALLENGED ADDITION MADE BY THE AO TOWARDS ESTIMATION OF GROSS PROFIT ON ALLEGED BOGUS PURCHAS ES. THE ASSESSEE CLAIMS THAT IT HAS ACCEPTED ADDITION MADE BY THE AO CONSIDERING THE FACT THAT EVEN AFTER DISALLOWANCE OF GROSS PROFIT ON ALL EGED BOGUS PURCHASES, INCOME FROM BUSINESS IN THE YEAR CONTINUED TO BE NE T LOSS, THEREFORE, HE WAS UNDER THE BONA FIDE BELIEF THAT PENALTY PROVISI ONS FOR CONCEALMENT OF PARTICULARS OF INCOME U/S 271(1)(C) WILL NOT ATTRAC T. THE ASSESSEE FURTHER CONTENDED THAT WHEN HE HAS AGREED FOR ESTIMATION OF GROSS PROFIT ON 7 ITA 2998/MUM/2017 ALLEGED BOGUS PURCHASES, IT WAS ONLY FOR THE PURPOS E OF AVOIDING LITIGATION AT THE STAGE OF ASSESSMENT PROCEEDINGS I TSELF, BUT FACT REMAINS THAT HE HAS FURNISHED COMPLETE EVIDENCES TO PROVE S UCH PURCHASES AND ALSO FILED QUANTITATIVE DETAILS OF PURCHASE AND SAL ES ALONGWITH COMPARABLE GROSS PROFIT RATIO. THE AO HAS NOT DISP UTED ALL THESE FACTS. THEREFORE, HE WAS UNDER THE BONA FIDE BELIEF THAT T HERE WOULD NOT BE ANY PENALTY AND ACCORDINGLY NOT PREFERRED AN APPEAL BEF ORE THE LD.CIT(A). HE FURTHER SUBMITTED THAT MERELY FOR THE REASON THA T THERE WAS NO APPEAL FILED CHALLENGING THE ADDITION MADE BY THE AO, THE SAME CANNOT BE CONSIDERED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. HAVING HEARD BOTH THE SIDES, WE FIND MERIT IN TH E ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT ALTHOUGH THE AO HAS ES TIMATED 25% GROSS PROFIT ON ALLEGED BOGUS PURCHASES, NEVER MADE ANY O BSERVATIONS WITH REGARD TO THE INCORRECTNESS IN DETAILS FILED BY THE ASSESSEE TO PROVE SUCH PURCHASES. THE AO NEVER DISBELIEVED INFORMATION FI LED BY THE ASSESSEE, BUT HE PROCEEDED ON THE BASIS OF INFORMATION RECEIV ED FROM SALES-TAX DEPARTMENT TO MAKE ADDITIONS. THE AO HAS MADE SUCH ADDITION ON ADHOC BASIS BY ESTIMATING GROSS PROFIT ON ALLEGED B OGUS PURCHASES. FROM THESE FACTS, IT IS VERY CLEAR THAT THE AO FAIL ED TO MAKE A CASE OF DELIBERATE ATTEMPT BY THE ASSESSEE TO FURNISH INACC URATE PARTICULARS OF INCOME. THEREFORE, WE ARE OF THE CONSIDERED VIEW T HAT MERE 8 ITA 2998/MUM/2017 DISALLOWANCE OF PURCHASES ON ADHOC BASIS DOES NOT T ANTAMOUNT TO WILLFUL FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. HENCE, WE A RE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN LEVYING PENALTY U/S 2 71(1)(C) OF THE ACT. ACCORDINGLY WE DIRECT THE AO TO DELETE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH OCTOBER, 2018. SD/- SD/- (JOGINDER SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 05 TH OCTOBER, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI