VIKRAM MACHINE SPINDLES, MUMBAI V. ASST CIT RG 25(1), MUMBAI

ITA 1511/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8514 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KUMAR SINGH LD
• Assessee Lawyers: RAJESH CHAMARIA LD
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3)

Judgement Text

ITA NO.1511/MUM/2017 VIKRAM MACHINE SPINDLES ASSESSMENT YEAR: 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1511/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) VIKRAM MACHINE SPINDLES E/G-1, MUKUND NAGAR ANDHERI KURLA ROAD ANDHERI (E), MUMBAI-59 / VS. ASS ISTANT COMMISSIONER OF INCOME TAX-RANGE 25(1) ROOM NO. 711, 7 TH FLOOR C-12, PRATYAKSHKAR BHAWAN BANDRA KURLA COMPLEX MUMBAI-51 ./ ./PAN/GIR NO. AAFFV-2509-L ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : RAJESH CHAMARIA - LD.AR REVENUE BY : MANISH KUMAR SINGH, LD. DR / DATE OF HEARING : 01/01/2019 / DATE OF PRONOUNCEMENT : 03/01/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-37, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-37/IT-599/ACIT-25(1)/15-16 DATED 29/12/2016 QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR RS.1,86,7 31/-. 2. FACTS LEADING TO THE LEVY OF PENALTY ARE THAT TH E ASSESSEE BEING ITA NO.1511/MUM/2017 VIKRAM MACHINE SPINDLES ASSESSMENT YEAR: 2012-13 2 RESIDENT FIRM WAS ASSESSED FOR IMPUGNED AY IN SCRUTINY ASSESSMENT U/S 143(3) ON 20/03/2015 WHEREIN THE ASSESSEE WAS SADDL ED WITH CERTAIN ADDITION OF RS.6.04 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ASSESSEE HAD MADE GROSS PURCHASES OF RS.495.87 LACS DURING IMPUGNED AY. THE STATED ADDITIONS OF RS.6.04 LACS W ERE MADE SINCE ONE OF THE SUPPLIERS NAMELY NIMISH STEEL PRIVATE LIMITED FROM WHOM THE SAID PURCHASES WERE MADE, WAS LISTED AS HAWALA DEALERS AS PER INFORMATION GATHERED BY SALES TAX DEPARTMENT, MAHARASHTRA. ALTHOUGH THE ASSESSEE SUBMITTED PRIMARY PURCHASE DOCUMENTS V IZ. PURCHASE INVOICES, CORRESPONDING SALES INVOICES, BANK STATEM ENTS ETC. TO PROVE THE GENUINENESS OF THE PURCHASES, HOWEVER, NOT SATI SFIED, LD. AO DISALLOWED THE SAME AND ADDED THE SAME TO THE INCOM E OF THE ASSESSEE. AS PER SUBMISSIONS OF LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], THE STATED ADDITION HAS BEEN ACCEPTED BY THE ASSESS EE KEEPING IN VIEW THE SMALLNESS OF THE AMOUNT AND NO FURTHER APPEAL H AS BEEN FILED AGAINST THE SAME. 3. CONSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)(C) AGAINST THE STATED QUANTUM ADDITION WAS INITIATED AND THE ASSESSEE WAS SADDLED WITH IMPUGNED PENALTY OF RS.1.86 LACS VIDE ORDER DATED 2 8/09/2015. THE SAME, UPON CONFIRMATION BY FIRST APPELLATE AUTHORIT Y, IS UNDER APPEAL BEFORE US. 4. THE LD. AR HAS ASSAILED THE PENALTY ON LEGAL GRO UNDS AS WELL AS ON MERITS AND SUBMITTED THAT PROPER SATISFACTION AS RE QUIRED BY LAW WAS NOT RECORDED BY LD. AO AND THEREFORE, THE PENALTY WAS N OT JUSTIFIED. RELIANCE WAS PLACED ON SEVERAL DECISION OF THIS TRIBUNAL REN DERED UNDER IDENTICAL CIRCUMSTANCES. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE [DR] ITA NO.1511/MUM/2017 VIKRAM MACHINE SPINDLES ASSESSMENT YEAR: 2012-13 3 SUBMITTED THAT THE ASSESSEE CONCEALED INCOME BY FUR NISHING INACCURATE PARTICULARS OF INCOME AND THEREFORE, THE SAME WAS P ERFECTLY JUSTIFIED. 5. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. UPON PERUSAL OF QUANTU M ASSESSMENT ORDER, IT TRANSPIRES THAT PENALTY PROCEEDINGS WERE INITIAT ED SINCE THE ASSESSEE NOT ONLY CONCEALED PARTICULARS OF INCOME BUT ALSO F ILED INACCURATE PARTICULARS THEREOF. THE PERUSAL OF NOTICE U/S 274 READ WITH SECTION 271 DATED 20/03/2015, AS PLACED ON RECORD, REVEAL THAT THE APPROPRIATE CLAUSE AS APPLICABLE TO THE FACT OF THE CASE WAS NO T MARKED AND SECONDLY, THE APPROPRIATE LIMB FOR WHICH THE PENALT Y WAS BEING INITIATED WAS NOT MARKED / TICKED. THE PERUSAL OF PENALTY ORD ER REVEAL THAT THE PENALTY HAS FINALLY BEEN LEVIED BY INVOKING EXPLANA TION-1 TO SECTION 271(1)(C) SINCE THE ASSESSEE HAS CONCEALED THE INCO ME BY FURNISHING INACCURATE PARTICULARS OF INCOME. AN IMPORTANT OBSE RVATION IS THE FACT THAT THE TWO LIMBS VIZ. CONCEALMENT OF INCOME AND FURNIS HING OF INACCURATE PARTICULARS OF INCOME HAVE INTER-CHANGEABLY BEEN US ED BY LD. AO WHILE LEVYING THE IMPUGNED PENALTY. HOWEVER, THESE TWO LI MBS, AS PER SETTLED JUDICIAL PRONOUNCEMENTS, ARE DISTINCT AND OPERATE S EPARATELY IN THE SENSE THAT CONCEALMENT IMPLIES TO HIDE SOMETHING WHEREAS FURNISHING IMPLIES ADDUCING / PUTTING FORWARD SOMETHING . THE LD. AO, IN OUR OPINION, WAS REQUIRED TO SPECIFY THE EXACT CHARGE WITH DUE A PPLICATION OF MIND FOR WHICH THE ASSESSEE WAS BEING PENALIZED. THE FAILURE TO DO SO WOULD BE FATAL TO THE PENALTY PROCEEDINGS. UPON CAREFUL CONS IDERATION OF THE THREE EVENTS VIZ. INITIATION OF PENALTY IN THE QUANTUM OR DER, SHOW-CAUSE NOTICE TO LEVY THE PENALTY AND FINAL LEVY OF PENALTY, WE F IND THAT THE LD. AO HAS FAILED TO RECORD PROPER SATISFACTION WITH REGARD TO THE EXACT NATURE OF ITA NO.1511/MUM/2017 VIKRAM MACHINE SPINDLES ASSESSMENT YEAR: 2012-13 4 OFFENCE COMMITTED BY THE ASSESSEE IN TERMS OF SECTI ON 271(1)(C). THEREFORE, THE IMPUGNED PENALTY COULD NOT BE SUSTAI NED. WE ORDER SO. 6. RESULTANTLY, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD JANUARY, 2019. SD/- SD/- (PAWAN SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03/01/2019 SR.PS:- JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. * +!$, , , , / DR, ITAT, MUMBAI 6. + -. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.