DCIT CIRCLE-3, Thane V. SHRI. VILAS ANANT SHIMPI, Thane

ITA 1264/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7379 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAMANTHA M
• Keywords: Bogus purchase
• Section: 271(1)(c); 69C; 143(3); 22

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL F BENCH MUMB AI BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI MANOJ KUMAR AGGAR WAL, ACCOUNTANT MEMBER ITA NO.1264/MUM/2019 (ASSESSMENT YEAR 2011-12) DCIT, CIRCLE- 3, ROOM NO.02, 6 TH FLOOR, AASHAR IT PARK, B-WING, WAGLE INDUSTRIAL ESTATE, ROAD NO. 16Z, THANE (W)-400604. VS. SHRI VILAS ANANT SHIMPI, GR./1 ST FLOOR, MORESHWAR KAMAL BUILDING,, DR. RAMESH PRADHAN MARG, TALAOPALI, THANE (W)- 400602. P AN: AAJPS0512L APPELLANT RESPONDENT APPELLANT BY : SHRI M. S. SAMANTHA M. ( SR. DR) REVENUE BY : NONE DATE OF HEARING : 15.01.2021 DATE OF PRONOUNCEMEN T : 22.01.2021 ORDER PER MAHAVIR SINGH, VICE-PRESIDENT; 1. THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, MUMBAI [FOR SHORT THE LD. CIT(A)] IN APPEAL NO. 598/15-16 DATED 03.12.2018. ASSESSMENT WAS FRAMED B Y ACIT CIRCLE-3, THANE FOR THE ASSESSMENT YEAR 2011-12 UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) VI DE ORDER DATED 26.02.2015. THE PENALTY UNDER DISPUTE WAS LEVIED BY DCIT, CIRCLE-3, THANE UNDER SECTION 271(1)(C) R.W.S 247 OF THE ACT VIDE O RDER DATED 31.08.2015. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED BY ASSESSING OFFICER UN DER SECTION 271(1)(C) OF ITA NO. 1264 MUM 2019-SHRI VILAS A NANT SHIMPI 2 THE ACT. FOR THIS REVENUE HAS RAISED FOLLOWING FIVE EFFECTIVE GROUNDS WHICH ARE AS UNDER: 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY BY NOT APPRECIATI NG THE FACT THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE ALLEGED BOGU S PURCHASES FROM THE HAWALA PARTIES DURING THE COURSE OF ASSESSMENT AS W ELL AS PENALTY PROCEEDINGS. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY BY NOT APPRECIATI NG THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE ALLEGED BOGUS PARTIES FOR VER IFICATION OF GENUINENESS OF TRANSACTION DURING ASSESSMENT PROCEEDINGS AS WELL A S PENALTY PROCEEDINGS AND VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME DOES N OT ABSOLVE THE ASSESSEE FROM PENALTY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY BY NOT APPRECIATI NG THE FACT THAT THERE WAS CLEAR INTENTION ON THE PART OF THE ASSESSEE TO REDU CE THE TAXABLE INCOME BY CLAIMING PURCHASES FROM NON-GENUINE PARTIES. 4. IT IS RESPECTFULLY SUBMITTED THAT THE PENALTY WA S LEVIED FOR THE ADDITIONS MADE ON THE BASIS OF INFORMATION RECEIVED FROM LAW ENFOR CEMENT AGENCY OF THE STATE GOVERNMENT OF MAHARASHTRA I.E. SALE TAX DEPARTMENT. 5. IT IS HUMBLY REQUESTED THAT PRESENT APPEAL IS BE ING FILED IN ACCORDANCE WITH THE CBDT'S INSTRUCTION NO. 3/2018 DATED 11/07/2018 AMENDED VIDE LETTER DATED 20.08.2018 AS PER PARA 10(E) OF THE SAID CIRCULAR. THEREFORE, THE ORDER OF THE CIT(A) MAY BE VACATED & THAT OF THE ASSESSING OFFIC ER MAY BE RESTORED. 3. WE HAVE HEARD LD. SR. DEPARTMENTAL REPRESENTATIVE ( DR) AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THIS CASE. WE NOTED THAT THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALES AND SERVICES OF CO MPUTERS, MOBILE AND ACCESSORIES. THE INCOME TAX DEPARTMENT RECEIVED INF ORMATION FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAS RECEIVED ITA NO. 1264 MUM 2019-SHRI VILAS A NANT SHIMPI 3 A BOGUS PURCHASE BILL FROM SHAKTI TRADING COMPANY A MOUNTING TO RS. 8,77,500/-, WHICH IS BOGUS AND THE ASSESSING OFFICE R ADDED THE ENTIRE AMOUNT UNDER SECTION 69C OF THE ACT BY OBSERVING TH AT THE ASSESSEE WAS BENEFICIARY OF ACCOMMODATION BILL ISSUED BY THE PAR TY MENTIONED, WHEREIN THERE WAS NO ACTUAL DELIVERY/PHYSICAL DELIVERY OF G OODS. HENCE, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WAS INITIATION BY THE ASSESSING OFFICER. 4. THE ASSESSING OFFICER LEVIED THE PENALTY EX-PARTE B Y OBSERVING THAT, MOREOVER, THE ADDITION HAS BEEN MADE TO THE EXTENT OF PURCHASES MADE FROM THE HAWALA OPERATOR AFTER BEING POINTED OUT TO THE ASSESSEE. BESIDES THIS THE ADDITION HAS NOT BEEN CONTESTED BY THE ASS ESSEE BEFORE THE LD. CIT(A) ALSO. THUS, THERE IS AN ADMISSION OF CONCEAL MENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME . 5. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A). THE CIT(A) ALSO PASSED EX-PARTE APPELLATE ORDER AND DELETED THE PEN ALTY BY OBSERVING IN PARA-9 AS UNDER: 9. THE LEVY OF PENALTIES IS MERELY ON DISALLOWANCE OF PURCHASES AND NOT FINDING OF CONCEALMENT OF ANY PARTICULAR OR MALA-FI DE INTENTION TO REDUCE TAXABLE INCOMES. ADDITIONS MADE ON ACCOUNT OF DISAL LOWANCE OF PURCHASES AS BOGUS AUTOMATICALLY CANNOT JUSTIFY THE PENALTIES LE VIED U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE PENALTIES OF RS. 4,75,860/- & RS. 2,71,150/-, IN AY 2010-11 & 2011-12, RESPECTIVELY, IMPOSED U/S 271(1) (C) OF THE I.T. ACT, BY THE AO, ARE HEREBY DELETED AND THE GROUNDS OF APPEA L, RAISED AS ABOVE, FOR BOTH THESE APPEALS, ARE ALLOWED. ITA NO. 1264 MUM 2019-SHRI VILAS A NANT SHIMPI 4 6. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE THE TRIBUN AL IN REGARD FOR A.Y. 2011-12. 7. WE NOTED THAT THIS IS A CASE OF BOGUS PURCHASES AND BOGUS PURCHASES WERE DISALLOWED BY ASSESSING OFFICER DURING THE ASSESSME NT PROCEEDINGS ONLY ON THE PREMISE THAT ASSESSEE IS UNABLE TO PRODUCE THE ACTUAL DELIVERY/PHYSICAL DELIVERY OF GOODS BUT IT IS A FACT THAT THE ASSESSI NG OFFICER HAS NOT DOUBTED THE SALES MADE BY ASSESSEE OR EVEN THE PAYMENTS WER E MADE BY ACCOUNT PAYEE CHEQUES. ONCE THIS IS A FACT THAT ONCE SALES ARE NOT DOUBTED, THE ENTIRE PURCHASES CANNOT BE CONSIDERED AS BOGUS AND THAT IS ALSO A PRESUMPTION. MERE ON PRESUMPTION, PENALTY CANNOT BE LEVIED. HENC E, WE CONFIRMED THE ORDER OF CIT(A) DELETING THE PENALTY AND DISMISSED THIS APPEAL OF REVENUE. 8. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY 2021. SD/- SD/- MANOJ KUMAR AGGARWAL MAHAVIR SINGH ACCOUNTANT MEMBER VICE-PRESIDENT MUMBAI, DATE: 22.01.2021 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR F BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST . REGISTRAR ITAT , MUMBAI