SAMEER D. PUNJABI, MUMBAI V. ITO 25(1)(1), MUMBAI

ITA 1564/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8443 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 1564/MUM/2017 (ASSESSMENT YEAR 2009-10) SAMEER D. PUNJABI, F 601 VISHAL APT. CHS LTD. SIR AMBY ROAD, ANDHERI EAST, MUMBAI 400 069 PAN: ADJPP 2214M ...... APPELLANT VS. THE ITO 25(1)(1), C-10, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (E) MUMBAI 400 0051 .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI RAM TIWARI DATE OF HEARING : 24/08/2017 DATE OF PRONOUNCEMENT : 10/11/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST AN ORDE R PASSED BY THE CIT(A) -37, MUMBAI DATED 20/01/2017, WHICH IN TUR N ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 14/ 08/2015. 2 ITA NO. 1564/MUM/2017 (ASSESSMENT YEAR 2009-10) 2. THE DISPUTE IN THIS APPEAL RELATES TO PENALTY IM POSED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.18,006 /-. 3. A PERUSAL OF THE ORDER OF THE AUTHORITIES BELOW REVEAL THAT PURCHASES EFFECTED BY THE ASSESSEE FROM FOUR PARTIE S TOTALLING TO RS.4,66,133/- WERE FOUND TO BE DOUBTFUL IN VIEW OF THE INFORMATION RECEIVED REGARDING THE FOUR PARTIES FROM THE MAHARA SHTRA SALES TAX DEPARTMENT. IN THE ASSESSMENT PROCEEDINGS ASSESSEE WAS NOT ABLE TO PRODUCE THE FOUR PARTIES FOR VERIFICATION AND, THER EFORE, THE ASSESSING OFFICER PROCEEDED TO TREAT THE PURCHASES TO THE EXT ENT OF RS.4,66,133/- AS BOGUS. SO HOWEVER, THE ASSESSING OFFICER DID NO T ADD THE ENTIRE AMOUNTS OF PURCHASES TO THE RETURNED INCOME BUT ADD ED ONLY PROFIT ELEMENT ATTRIBUTABLE TO SUCH PURCHASES, WHICH HE ES TIMATED AT 12.50% THEREBY, RESULTING IN AN ADDITION OF RS.58,266/- TO THE RETURNED INCOME. SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT ASSESSEE HA D CONCEALED THE INCOME TO THE ABOVE EXTENT AND ACCORDINGLY, A PENA LTY OF RS.18,006/- WAS IMPOSED. THE PENALTY HAS SINCE BEEN AFFIRMED B Y THE CIT(A) ALSO. 4. WE FIND THAT THE PLEA OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES HAS BEEN THAT THE LEVY OF PENALTY IS NOT AUTOMATIC AND THAT THE TRANSACTIONS OF PURCHASE EFFECTED FROM THE FOUR PA RTIES WERE WELL DOCUMENTED AND THE PAYMENTS WERE ALSO MADE THROUGH BANKING CHANNELS. AFTER HEARING THE LD. DEPARTMENTAL REPRE SENTATIVE, WE FIND THAT THERE IS NO JUSTIFICATION TO LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, INASMUCH AS, IT IS A CASE OF FAILURE OF THE ASSESSEE TO SUBSTANTIATE AN ENTRY OF PURCHASE IN THE BOOKS OF ACCOUNT AND IT IS NOT A CASE WHERE SOME FALSITY OR UNTRUTH HAS BEEN ESTABL ISHED. IN FACT, THE 3 ITA NO. 1564/MUM/2017 (ASSESSMENT YEAR 2009-10) ASSESSING OFFICER PROCEEDED TO ADD TO THE RETURNED INCOME ONLY THE AMOUNT OF PROFIT ELEMENT BECAUSE OF THE FACT THAT T HE SALES EFFECTED BY THE ASSESSEE CORRESPONDING TO THE IMPUGNED PURCHASE S WERE ACCEPTED. BE THAT AS IT MAY, IT IS A CASE OF MERE NON-SUBSTAN TIATION OF AN EXPENDITURE AND NOT A CASE WHERE FALSITY HAS BEEN PROVED TO THE HILT. EVEN IF ONE HAS TO GO BY THE MANNER IN WHICH THE AD DITION HAS BEEN MADE BY THE ASSESSING OFFICER BY RESORTING TO ESTIM ATING THE PROFIT ELEMENT NO PENALTY IS SUSTAINABLE. THEREFORE, IN T HIS VIEW OF THE MATTER, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY OF RS.18,006/- IMPOSED UNDER SEC TION 271(1)(C) OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10/11/2017. SD/- SD/- (PAWAN SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 10/11/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI