ITO WARD 1 (5), Thane V. M/S DUROSHARP KNIVES, Thane

ITA 1307/MUM/2019

• Counselvise Citation: [2020] 108 COUNSELVISE.COM (IT) 8968 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY JAISWAL
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 250; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1307/M/2019 ASSESSMENT YEAR: 2011-12 ITO WARD 1(5), ASHAR IT PARK, 6 TH FLOOR, B WING, R.NO.14, WGALE INDUSTRIAL ESTATE THANE (WEST), THANE - 400604 VS. M/S. DUROSHARP KNIVES, 2 DEVENDRA INDUSTRIAL ESTATE LOKMANYA NAGAR PADA NO.2, THANE 400 604 PAN: AABFD8125E (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI VIJAY JAISWAL, D.R. DATE OF HEARING : 22.10.2020 DATE OF PRONOUNCEMENT : 15.12.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 06.12.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. AT THE TIME OF HEARING IN VIRTUAL MODE , WE NOTICE THAT NONE APPEARED ON BEHALF OF THE ASSESSEE TO ATTEND THE HEARING NOR ANY APPLICATION FOR ADJOURNMENT WAS FILED. HENCE, WE ARE DECIDING THIS APPEAL ON MERITS AFTER HEARING THE LD. D.R. AND GOING THROUGH THE MATERIAL BEFORE US EX-PARTE. ITA NO.1307/M/2019 M/S. DUROSHARP KNIVES 2 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF PENALTY BY LD. CIT(A) OF RS.9,020/- LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT IN THIS CASE WAS FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT VIDE ORDER DATED 16.02.2015 WHEREIN AN ADDITION OF RS.29,200/- WAS MADE BY THE AO @ 25% OF ALLEGED BOGUS PURCHASES OF RS.1,16,795/- MADE FROM M/S. SHIVRAJ TRADERS. PERTINENT TO STATE THAT THE CASE WAS REOPENED BY THE AO ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT ASSESSEE HAS TAKEN BOGUS PURCHASE BILLS TO THE TUNE OF RS.1,16,795/- AND HENCE THIS ADDITION BY THE AO TO ASSESS THE PROFITS ON SUCH PURCHASES. 5. AT THIS JUNCTURE , WE WOULD LIKE TO MENTION THAT THE ASSESSEE DID NOT CHALLENGE THE QUANTUM ADDITION. THE AO INITIATED THE PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER ITSELF FOR FILING INACCURATE PARTICULARS OF INCOME AND FINALLY LEVIED A PENALTY OF RS.9,020/- BEING 100% OF THE TAX SOUGHT TO BE EVADED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME VIDE ORDER DATED 25.08.2015 BY REJECTING THE CONTENTIONS OF THE ASSESSEE THAT NO PENALTY IS LEVIABLE WHERE THE INCOME IS ESTIMATED ON ADHOC BASIS. 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DELETED THE PENALTY BY RELYING ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF SIR SHADILAL SUGAR MILLS 168 ITR 7051 WHEREIN IT HAS BEEN HELD THAT THE MERE NON PROTESTING AND AGREEING TO THE ADDITION DOES NOT LEAD TO THE CONCLUSION THAT AMOUNT AGREED IS ITA NO.1307/M/2019 M/S. DUROSHARP KNIVES 3 TO BE ADDED AS CONSIDERED INCOME. THE LD. CIT(A) ALSO RELIED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY 2013 35 TAXMANN.COM 250 WHEREIN IT HAS BEEN HELD THAT THE MERE FACT THAT ASSESSEE HAS AGREED TO PAY THE TAX AND DID NOT CHALLENGE THE ASSESSMENT ORDER CAN NOT BE CONSTRUED AS MALAFIDE. THE LD. CIT(A) FURTHER RELIED ON THE DECISION OF THE DILIP N. SHROFF V. JT. CIT (2007) 291 ITR 519 BY HOLDING THAT ASSESSMENT PROCEEDINGS CAN NOT BE AUTOMATICALLY ADOPTED IN PENALTY PROCEEDINGS AND AUTHORITIES HAVE TO CONSIDER THE MATTER FROM DIFFERENT ANGLE. THE LD. CIT(A) FINALLY RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. 2010 322 ITR 158 SC WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF EXPENDITURE AS WELL AS INCOME IN RETURN OF INCOME WHICH DETAILS IN THEMSELVES WERE NOT FOUND TO BE INACCURATE OR NOR COULD BE VIEWED AS CONCEALMENT OF INCOME ON ITS PART, THEN IT IS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAS CLAIMED EXPENDITURE WHICH WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE AGGRIEVED BY THE ORDER OF LD CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 7. AFTER HEARING THE LD. D.R. AND ON GOING THROUGH THE MATERIAL ON RECORD, WE NOTE THAT IN THIS CASE THE ADDITION WAS MADE TOWARDS ALLEGED BOGUS PURCHASES AT THE RATE OF 25% OF ALLEGED BOGUS PURCHASES OF RS.1,16,795 RESULTING INTO AN ADDITION OF RS.29,200/- . THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THE QUANTUM PROCEEDINGS. THEREAFTER ,THE AO LEVIED THE PENALTY FOR INACCURATE PARTICULARS OF INCOME OF ITA NO.1307/M/2019 M/S. DUROSHARP KNIVES 4 RS.9,020/- AT 100% OF THE TAXES SOUGHT TO BE EVADED. WE HAVE CAREFULLY PERUSED THE ORDER OF LD. CIT(A), WHO, AFTER RELYING ON VARIOUS DECISIONS OF HONBLE APEX COURT AND VARIOUS OTHER JUDICIAL FORUMS, HAS DELETED THE PENALTY BY HOLDING THAT NON PROTESTING THE QUANTUM ADDITION WOULD NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR CONCEALED ITS INCOME. SIMILARLY, LD. CIT(A) HAS ALSO OPINED THAT NO PENALTY IS LEVIABLE IN CASE OF ESTIMATION OF INCOME BY THE AO. IN THE PRESENT CASE THE ASSESSEE HAS FULLY DISCLOSED ALL THE DETAILS OF PURCHASES IN ITS ACCOUNTS AND IN RETURN OF INCOME AND THE AO HAS ESTIMATED ADDITION EQUAL TO 25% OF THE TOTAL PURCHASES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN OUR OPINION, THE ORDER OF LD. CIT(A) IS VERY REASONED ORDER PASSED AFTER TAKING INTO ACCOUNT THE RATIO LAID DOWN BY THE VARIOUS JUDICIAL FORUMS ON THIS ISSUE INCLUDING THE DECISION OF CIT VS RELIANCE PETRO PRODUCTS P LTD (SUPRA). ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A) ON THE GROUND THAT NO PENALTY IS LEVIABLE IN CASE OF ESTIMATION OF INCOME BY DISMISSING THE APPEAL OF THE REVENUE . 8. ACCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12.2020. SD/- SD/- (VIKAS AWASTHY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 15.12.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NO.1307/M/2019 M/S. DUROSHARP KNIVES 5 THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.