PREMARAM R. CHOUDHARY, MUMBAI V. INCOME TAX OFFICER-3(2), THANE

ITA 1727/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5385 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 16-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP LD
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 27

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.1727/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) PREMARAM R. CHOUDHARY M/S. KISAN TRADING CO. SHOP NO.5, GROUND FLOOR LAXMI APTS. KAPURWADI NAKA THANE-400 607. / VS. INCOME TAX OFFICER - 3(2) ASHAR IT PARK, 6 TH FLOOR ROOM NO.04, AMBIKA NAGAR WAGLE ESTATE THANE-400 604. ! ./ ./PAN/GIR NO. AEYPC-3502-R ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : NONE DEPARTMENT BY : SHRI NEIL PHILIP-LD.DR / DATE OF HEARING : 13/05/2019 / DATE OF PRONOUNCEMENT : 16/05/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME-TAX (APPEALS)-2, PUNE [CIT(A)], APPEAL NO [NEW].PN/CIT(A)-2/ITO WD- 3(2)/THN/185/2017-18 DATE 03/10/2017 ON FOLLOWING GROUNDS OF APPEAL: - 2 I. THE ID CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER IMPOSING PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 5.74,340 /- IN RESPECT OF THE ALLEGED ADDITION OF RS.16,62,119/- WITHOUT APPRECIATING THA T THERE IS NO CONCEALMENT OF ANY INCOME NOR HAS THE ASSESSEE FURNISHED ANY INACC URATE PARTICULARS OF HIS INCOME. 2. THE ASSESSING OFFICER ERRED IN LEVYING PENALTY U/S. 271(1)(C) OF ACT IN RESPECT OF ALLEGED PURCHASE WITHOUT APPRECIATING THAT THE ASSE SSEE HAD SUBMITTED ALL DETAILS AND EVIDENCES MERELY BECAUSE THE ASSESSEE HAS AGREE D TO OFFER THE SAME FOR TAXATION , THE LEVY OF PENALTY IS NOT JUSTIFIED, MO RESO WHEN IN ALL CASES OF BOGUS PURCHASES FROM HAWALA DEALERS TRIBUNAL HAS CONSISTE NTLY SUSTAINING GP /ESTIMATED ADDITION . 3. THE NOTICE FOR LEVYING PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT IS BAD IN LAW AND NOT SUSTAINABLE IN LAW. THE LD. AUTHORISED REPRESENTATIVE FOR ASSESSEE [AR] HAS SOUGHT WITHDRAWAL OF VAKALATNAMA VIDE LETTER DATED 10/05/2019. ACCORDINGLY, WE PROCEED TO DISPOSE-OFF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING LD. DR, WHO JUSTIFIED THE IMPUGNED PENALTY U/S 271(1)(C). 2. FACTS LEADING TO LEVY OF PENALTY ARE THAT THE AS SESSEE WAS SADDLED WITH CERTAIN QUANTUM ADDITION OF RS.16.62 LACS ON A CCOUNT OF ALLEGED BOGUS PURCHASES IN AN ASSESSMENT FRAMED U/S 143(3) R.W.S. 147. ALTH OUGH THE ASSESSEE DENIED THE SAME, HOWEVER, NOTICES U/S 133( 6) WERE RETURNED BACK AND THE PARTIES WERE NOT FOUND TRACEABLE AT THE GIV EN ADDRESSES. THE ASSESSEE SUBMITTED THAT THE PURCHASES WERE MADE UND ER BONA-FIDE BELIEF IN GOOD FAITH ASSUMING THE SUPPLIERS TO BE GENUINE ONE AND THE SUPPLIERS USED TO VISIT ASSESSEES SHOP TO SUPPLY THE GOODS. THE S AME COULD NOT FIND FAVOR WITH LD. AO. THEREFORE, WHILE DISALLOWING THESE PUR CHASES, PENALTY U/S 271(1)(C) WAS INITIATED AGAINST THE ASSESSEE FOR CO NCEALMENT OF INCOME AND SHOW-CAUSE NOTICE U/S 274 R.W.S. 271(1)(C) WAS ISSU ED IN DUE COURSE OF TIME. THE PERUSAL OF RECORD, PRIMA-FACIE REVEAL THAT THE QUANTUM ADDITION 3 HAS BEEN ACCEPTED BY THE ASSESSEE. FINALLY, THE ASS ESSEE HAS BEEN SADDLED WITH IMPUGNED PENALTY OF RS.5.74 LACS U/S 2 71(1)(C) VIDE ORDER DATED 25/09/2014. THE SAME, UPON CONFIRMATION BY LD . FIRST APPELLATE AUTHORITY, IS UNDER CHALLENGE BEFORE US. 3. UPON CAREFUL CONSIDERATION, UPON PERUSAL OF ASSE SSEES SUBMISSIONS DURING APPELLATE PROCEEDINGS, WE FIND THAT THE ASSE SSEES PLEA REVOLVE AROUND THE FACT THAT THE PURCHASES WERE MADE UNDER BONA-FIDE BELIEF AND IN GOOD FAITH THAT THE SUPPLIERS WERE GENUINE. THE SUP PLIERS USED TO VISIT ASSESSEES SHOP TO SUPPLY THE MATERIAL AS PER ROUTI NE PRACTICE. THE TIN OF THE SUPPLIERS WAS FOUND ACTIVE AT THE TIME OF PURCH ASE OF GOODS. WE FIND THE EXPLANATION TO BE PLAUSIBLE ONE AND THE OVERALL CON DUCT OF THE ASSESSEE DO NOT INSPIRE US TO CONFIRM THE PENALTY. BY DELETING THE SAME, WE ALLOW GROUND NOS. 1 & 2. NOTHING ON RECORD SUGGEST THAT THE NOTI CE FOR LEVYING PENALTY WAS BAD IN ANY MANNER AND THEREFORE, GROUND NO. 3 S TANDS DISMISSED. 4. THE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2019 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16/05/2019 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 4 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI