NEW LIFE MARKETING & TRADING P. LTD, MUMBAI V. ITO 4(3)(1), MUMBAI

ITA 1681/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5604 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) I.T.A. NO. 1681/MUM/2019 (ASSESSMENT YEAR 2004-05 ) NEW LIFE MARKETING & TRADING PVT. LTD. 158/164, LAXMI BHAVAN 4 TH FLOOR, KALBADEVI ROAD MUMBAI-400 002. PAN : AAACN166 4L VS . ITO-4(3)(1) 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD CHURCHGATE MUMBAI-400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI PRAMOD NIKALJE DATE OF HEARING 21 .09 . 20 20 DATE OF PRONOUNCEMENT 22.09.2020 O R D E R THIS IS AN APPEAL BY THE ASSESSEE WHEREIN THE ASSES SEE IS AGGRIEVED THAT LEARNED CIT(A) HAS ERRED IN SUSTAINING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE I.T. ACT AMOUNTING TO RS.63,896/- BY ORDER DATED 5.2.2019. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IN THI S CASE IS ENGAGED IN THE BUSINESS OF INVESTMENT IN SHARES AND COMMISSION AGE NT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE D ISALLOWANCE OF RS. 22,435/- FOR EXPENSES ON ACCOUNT OF PURCHASE. ADDIT ION WAS RESTRICTED TO RS. 1,77,242/- BY LEARNED CIT(A). PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS. 63,896/- WAS ALSO LEVIED. 3. UPON ASSESSEES APPEAL LEARNED CIT(A) CONFIRMED THE PENALTY DESPITE NOTING THAT IN ASSESSEES OTHER GROUP CONCERN CASE, THE ENTIRE ADDITION WAS DELETED. 4. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE THE ITAT. I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. I FIND THAT THE NEW LIFE MARKETING & TRADING PVT. LTD. 2 ADDITION ON ACCOUNT OF BOGUS PURCHASE HAS BEEN DONE BY THE ASSESSING OFFICER. PENALTY HAS BEEN LEVIED ON THE ENTIRE AMOUNT OF DIS ALLOWANCE DESPITE NOTING THAT LEARNED CIT(A) HAS REDUCED THE DISALLOWANCE. M OREOVER, REJECTION OF A CLAIM BY THE ASSESSEE CANNOT IPSO FACTO LEAD TO THE CONCLUSION THAT PENALTY U/S. 271(1)(C) OF THE ACT IS LEVIABLE. THIS PROPOSI TION DRAW SUPPORT FROM HON'BLE SUPREME COURT DECISION IN THE CASE OF RELIANCE PETR O PRODUCTS PVT. LTD., (322 ITR 158). HENCE, I SET ASIDE THE ORDER OF THE AUTHO RITIES BELOW AND DELETE THE PENALTY. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULES ON 22.9.2020. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 22/09/2020 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// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI