ITO 28(1)(2), NAVI MUMBAI V. BANDU HATWAR, NAVI MUMBAI

ITA 1567/MUM/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4292 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR SINGH LD
• Keywords: Bogus purchase
• Section: 69C; 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1567/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER - 28(1)(2) ROOM NO.328, 3 RD FLOOR TOWER NO.6 VASHI RAILWAY STATION COMPLEX NAVI MUMBAI-400 703 / VS. BANDU HATWAR. G-3558, APMC FRUIT MARKET TURBHE, NAVI MUMBAI-400 705 ! ./ ./PAN/GIR NO. AAWPH-0506-L ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : MANOJ KUMAR SINGH, LD. DR / DATE OF HEARING : 04/10/2018 / DATE OF PRONOUNCEMENT : 10/10/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)- 26, MUMBAI, [CIT(A)], APPEAL NO.CIT(A)-33/IT/103/14-15 DATED 21/12/2016 QUA DELETION OF PENALTY U/S 271(1)(C) FOR RS.95.38 LACS AS 2 IMPOSED BY LD. ASSESSING OFFICER [AO] VIDE ORDER DA TED 06/03/2014 AGAINST QUANTUM ADDITION OF RS.2,80,28,291/-. 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE P ROCEED TO DISPOSE-OFF THE SAME IN TERMS OF RULE 25 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AF TER HEARING LD. DEPARTMENTAL REPRESENTATIVE, SHRI MANOJ KUMAR SINGH WHO HAS JUSTIFIED THE STAND OF LD. AO IN IMPOSING T HE IMPUGNED PENALTY. 3. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ASS ESSEE BEING RESIDENT INDIVIDUAL ENGAGED AS FRUITS DEALER/ WHOLE SELLER WAS ASSESSED U/S 143(3) ON 26/12/2011 AFTER ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.298.99 LACS AND ANOTHER ADDITION U/S 44(A)( IA) FOR RS.41.22 LACS. UPON FURTHER APPEAL, THE LD. FIRST A PPELLATE AUTHORITY PROVIDED A RELIEF OF RS.59.93 LACS VIDE ORDER DATED 17/12/2012 WHICH REDUCED THE AGGREGATE QUANTUM ADDITION TO RS. 280.2 8 LACS AGAINST WHICH THE ASSESSEE WAS SADDLED WITH PENALTY OF RS.9 5.38 LACS. 4. THE ASSESSEE CONTESTED THE PENALTY WITH SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 21/12/2016 WHEREIN LD. CIT(A) DELETED THE PENALTY BY MAKING FOLLOWING OBSERVATION S:- 6.5 IN THE INSTANT CASE, THE APPELLANT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 30.09.2009 DECLARING TOTAL INCOME A T RS.6,91,443/-. THE CASE WAS SELECTED FOR SCRUTINY AND ORDER U/S.143(3) OF T HE ACT WAS PASSED ON 26.12.2011 ASSESSING TOTAL INCOME AT RS.3,47,13,380 /- BY MAKING ADDITIONS OF RS.2,98,99,390/- ON ACCOUNT OF BOGUS PURCHASES U/S 69C OF THE ACT AND ADDITION U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS.41,22,540/ -. THE CIT(A) CONFIRMED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES U/S 69C TO T HE EXTENT OF RS.2,80,28,291/- AND DELETED THE ADDITION MADE U/S 40(A)(IA) OF THE ACT. THE AO LEVIED PENALTY OF RS.95,38,399/-. IT IS SEEN THAT THE SOLE GROUND OF APPEAL PERTAINS TO LEVY OF 3 PENALTY OF RS.95,38,399/- U/S 271(1)(C) OF THE ACT ON ADDITION OF RS.2,80,28,300/- ASSESSED BY THE LD. AO UNDER THE HEAD BOGUS PURCHA SES U/S 69C OF THE ACT AS THE SAME WAS CONFIRMED BY THE CIT(A). DURING APPELLATE PROCEEDINGS, THE APPELLANT AR HAS SUBMITTED A COPY OF ORDER PASSED B Y THE HONBLE ITAT IN ITA NO.2056/MUM/2013, DATED 28.09.2016 WHEREIN THE ITAT HAS ESTIMATED THE DISALLOWANCE AT RS.20,00,000/- AS AGAINST RS.2, 80,28,291/- CONFIRMED BY THE CIT(A). NOW THE FACTUAL MATRIX HAS ENTIRELY CHANGED IN THE LIGHT OF THE HONBLE ITAT ORDER. MOREOVER, DURING ASSESSMENT PRO CEEDINGS APPELLANT HAS SUBMITTED THAT ALL THE TRANSACTIONS OF PURCHASE AND SALES ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED. THE PURCHASES ARE SUPPORTED BY PROPER BILLS/VOUCHERS. THE PAYMENTS WERE MADE THROUGH BANK ING CHANNELS. THUS, THE SALE AGAINST THE PURCHASES IS NOT DOUBTED. 6.6 I HAVE PERUSED THE IMPUGNED PENALTY ORDER AND O RAL SUBMISSIONS MADE BY THE APPELLANT. ON THE BASIS OF VARIOUS CASE LAWS AN D FACTS OF THE CASE, I AM OF CONSIDERED OPINION THAT THE APPELLANT HAS SHOWN ALL THE PURCHASES AND AO HAS NOT QUESTIONED THE SALES TRANSACTIONS. DISALLOWANCE OF PURCHASE EXPENSES WILL NOT PER SE AMOUNT TO CONCEALMENT OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME. MERELY BECAUSE APPELLANT HAD CLAIMED PUR CHASE EXPENDITURE, THE CLAIM OF WHICH WAS NOT ACCEPTED OR WAS NOT ACCEPTAB LE TO REVENUE, THAT BY ITSELF WOULD NOT ATTRACT PENALTY UNDER SECTION 271(1)(C) O F THE ACT. MOREOVER, THE HONBLE ITAT HAS ESTIMATED THE DISALLOWANCE AT RS.2 0,00,000/- AS AGAINST RS.2,80,28,291/- CONFIRMED BY THE CIT(A). THE ISSUE IS VERY DEBATABLE AND CONTROVERSIAL AND PLETHORAS OF JUDGMENTS ARE FOR AN D AGAINST THE TREATMENT OF SUCH EXPENSES. THEREFORE, I HEREBY DIRECT AO TO DELETE THE PENALTY LEVIED AMOUNTING TO RS.95,38,399/-. THE GROUND OF APPEAL I S ALLOWED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CAREFULLY CONSIDERED THE IMPUGNED ORDER WHEREIN WE FIND THAT THE PENALTY HAS BEEN DELETED BY LD. FIRST APPELLATE AUTHORITY UPON NOTICING THAT THE QUANTUM ADDITIONS OF RS.280. 28 LACS HAS FINALLY BEEN ESTIMATED AT RS.20 LACS BY THE TRIBUNAL VIDE ITA NO. 2056/MUM/2013. NOTHING ON RECORD SUGGEST THAT THE AFORESAID ORDER OF THE TRIBUNAL HAS SUBSEQUENTLY BEEN REVERSED BY A NY HIGHER AUTHORITY. THIS BEING THE CASE, THE IMPUGNED PENALT Y DOES NOT SURVIVE SINCE THE FINAL ADDITION OF RS.20 LACS IS ON ESTIMA TED BASIS ONLY. THEREFORE, FINDING NO INFIRMITY IN THE IMPUGNED ORD ER, WE DISMISS THE APPEAL. 4 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :10.10.2018 SR.PS:-THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI