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"4.3. I have considered the appellant's submissions and the AO's observations. After the decision of the Hon'ble Supreme Court of India in the case of [2013] 38 taxmann.com 448 (SC), MAK Data (P.) Ltd., the appellant's contentions that since that addition was made on agreed basis hence no penalty should be imposed is not acceptable. The other explanation of the appellant is that he's procuring such' materials from small farmers living in villages and these persons are not asking for payment immediately. Such claim has not been substantiated by any evidence. It is against human probability that Shri Kishor A. Sewani.vs. ITO Asst.Year -2011-12 small farmers will not ask for the payment immediately but will keep it pending for years together. Moreover the correct addresses of such persons were also not submitted by the appellant. Hence such explanation is also not bona fide. Thus it is held that the appellant has failed to substantiate the explanation filed by him regarding the additions made in the assessment order. Since he failed to substantiate these purchases, hence he agreed for the addition also. Hence it is held that the AO has rightly levied penalty under section 271(1)(c) in this case."

On the other hand, the learned DR submitted that internal vouchers/ self-made vouchers claimed the purchases. There was no bill produced by the assessee from the parties except weigh slip.

There was no justification furnished by the assessee for holding the payment of the sundry outstanding creditors.

Shri Kishor A. Sewani.vs. ITO Asst.Year -2011-12 The learned DR also claimed that all the payments were made to the sundry creditors in cash. Therefore, the same cannot be verified for the external documentary evidence. The learned DR in support of his statement relied on the judgment of Hon'ble Supreme Court of India in the case of MAK Data Pvt. Ltd. vs. CIT reported in 358 ITR 593.

Shri Kishor A. Sewani.vs. ITO Asst.Year -2011-12

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We also note that the facts in the case of MAK data were different from the present case. The addition in case of MAK Data was agreed in connection with the share capital transaction whereas in the facts the issue relates to the sundry creditors arising out of the purchases which were debited in the profit & loss account as revenue expenses. Thus we are reluctant to rely on the case of MAK Data as discussed above.