M.S POWER MECH ENGINEERING CORPORATION, Mumbai V. CIT (A)-38, Mumbai

ITA 1640/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5351 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARJU GORODIA
• Keywords: Bogus purchase; FORM 26AS
• Section: 234B; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO S . 1639 & 1640 /MUM/201 9 (A.Y: 201 0 - 11 & 2014 - 15 ) M/S. POWER MECH ENGINEERING CORPORATION A201, MAHAVIR SHARADDHA PLOT NO. 11B, SECTOR 7, KHARGHAR NAVI MUMBAI - 410210 PAN: AAIFP2854 M V. INCOME TAX OFFICER 26(2)(4) ROOM NO . 402 EARNEST HOUSE , NCPA MARG NARIMAN POINT MUMBAI 400 021 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : MS. ARJU GORODIA DATE OF HEARING : 21.09.2020 DATE OF PRONOUNCEMENT : 2 9 .09 . 2020 O R D E R PER C. N. PRASAD (JM) 1. THESE APPEAL ARE FILED BY THE ASSESSEE AGAINST DIFFERENT ORDER S OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) 38 , MUMBAI [HEREINAFTER I N SHORT LD.CIT(A)] DATED 29.10.2018 FOR THE ASSESSMENT YEAR S 2010 - 11 & A.Y. 2014 - 15. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL S : - A.Y. 2010 - 11 1. THE HON. CIT APPEAL CONFIRMED THE ACTION OF LEARNED ASSESSING OFFICER OF ADDING BACK THE ENTIRE PURCHASE AMO UNT TO ' 1 1,67,745/ - ALLEGING THE SAME AS PURCHASE FROM HAWALA TRADERS. HE FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND HAD 2 ITA NOS. 1639 & 1640/MUM/2019 M/S. POWER MECH ENGINEERING CORPORATION MADE THE PURCHASES TO EXECUTE WORK CONTRACT FOR GOVERNMENT AND NON - GOVERNMENT BODIES. 2. AS HELD IN THE VARIOUS COURT DECISIONS AND ALSO IN THE ASSESSES OWN CASE OF ASSESSMENT YEAR 2009 - 10 THE ADDITION IN SUCH CASES RESTRICTED TO 12.5% OF THE ALLEGED BOGUS PURCHASES. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE H ON.CIT APPEAL ERRED IN DIRECTING THE CHARGING OF INTEREST U/S.234A, 234B AND 234C OF THE INCOME TAX ACT, 1961 4. YOUR APPELLANT DENIES ANY LIABILITY FOR PAYMENT OF PENALTY AND INTEREST IN RESPECT OF ABOVE ADDITIONS. 5. YOUR APPELLANT PRAYS TO ADD, ALTER, M ODIFY OR DELETE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL. A.Y. 2014 - 15 THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS IN CATEGORY OF LIMITED SCRUTINY AND THE REASON FOR SCRUTINY WAS MISMATCH IN SALES AS PER ITR AND AS PER FORM 26AS THE LEARNED ASSESSING OFFICER WAS SATISFIED ON THIS POINT AND HAS MADE NO ADDITIONS IN THIS REGARD THE LEARNED ASSESSING OFFICER FURTHER PROCEEDED TO COVER THE POINTS WHICH WERE NOT IN THE LIMITED SCRUTINY NOTICE THE LEARNED ASSESSING OFFICER ADDED THE UNPAID GOVERNMENT LIABIL ITIES OF RS 1999690 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT DEBITED VAT OF RS 912018 AND SERVICE TAX OF RS 1087672 TO PROFIT AND LOSS ACCOUNT AND HENCE NOT DISALLOWED IN THE COMPUTATION OF INCOME. THE HON. CIT APPEAL ERRED IN CONFIRMING THE ADDITIONS ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN DIRECTING THE CHARGING OF INTEREST U / S . 234A 234B AND 234C OF THE INCOME TAX ACT 1961 YOUR APPELLANT DENIES ANY LIABILITY FOR PAYMENT OF PENALTY AND I NTEREST IN RESPECT OF ABOVE ADDITIONS YOUR APPELLANT PRAYS TO ADD ALTER MODIFY OR DELETE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL 3. IN SPITE OF ISSUE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE. THE NOTICE WAS SENT THROUGH RPAD TO THE ADDRESS GIVEN BY THE ASSESSEE IN FORM NO.36 WHICH WAS RETURNED UNSERVED. SINCE THE NOTICE ISSUED WAS RETURNED UNSERVED, WE DISPOSE OFF THESE APPEALS ON MERITS ON HEARING THE LD.DR . 3 ITA NOS. 1639 & 1640/MUM/2019 M/S. POWER MECH ENGINEERING CORPORATION 4. HEARD LD. DR, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE LD.CIT(A ) ORDER, I FIND THAT IN BOTH THESE APPEALS LD.CIT(A) DISPOSED OFF THE APPEAL S CONSIDERING THE STATEMENT OF FACTS ENCLOSED WITH FORM NO.35 WITHOUT ANY PHYSICAL APPEARANCE OF APPELLANT/AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. CONSIDERING THE TOTALITY OF F ACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THE ADDITIONS/DISALLOWANCE MADE BY THE ASSESSING OFFICER, IN THE INTEREST OF JUSTICE I AM OF THE OPINION THAT ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTU NITY OF BEING HEARD. THUS, THESE APPEAL S ARE REST ORED TO THE FILE OF THE LD.CIT(A) FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW. ASSESSEE SHALL COOPERATE WITH THE PROCEEDINGS BEFORE THE LD.CIT(A) WITHOUT TAKING UNNEC ESSARY ADJOURNMENTS. THUS, THESE APPEAL S ARE RESTORED TO THE FILE OF THE LD.CIT(A) AC CORDINGLY. 5. IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 29. 09.2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 29/ 09/2020 GIRIDHAR, SR.PS 4 ITA NOS. 1639 & 1640/MUM/2019 M/S. POWER MECH ENGINEERING CORPORATION COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM