MUKESH SALIGRAM SHARDA, MUMBAI V. ITO WD1 (2) , KALYAN

ITA 1907/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7548 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 17-10-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” MUMBAI BEFORE SHRI ABY T. VARKEY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 1908/MUM/2021 Assessment Year: 2010-11 & ITA No. 1907/MUM/2021 Assessment Year: 2011-12 Mukesh Saligram Sharda, 93/1, Brahman Ali, Guru Ashish Bldg., Flat No. 9, Near P R High School, Bhiwandi-421 302. Vs. Income Tax Officer, Ward 1(2), Mohan Plaza, Wayale Nagar, Khadak Pada, Kalyan (W)-421 301. PAN No. AUFPS 2113 R Appellant Respondent Assessee by : None Revenue by : Mr. Ashish Deharia, DR Date of Hearing : 08/06/2022 Date of pronouncement : 14/06/2022 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against two separate orders dated 21/09/2021 and 20/09/2021 passed by the Ld. Commissioner of Income-tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11 and 2011-12 respectively, in relation to penalty levied by the Assessing Officer 2. At the outset, we may like to mention that despite notifying neither anyone put in appearance on behalf of the assessee nor any adjournment was sought on behalf of the assessee. In the circumstances, we were of the opinion that the assessee is not interested in prosecuting the appeal and therefore same ex-parte qua the assessee, after hearing arguments of the Departmental Representative 3. We have heard submission of the Representative and perused the relevant material on r these cases, disallowance respect of the bogus pu Ld. Fisrt Appellate Authority (FAA) further upheld by the Income Subsequently, the Assessing Officer 12 respectively, in relation to penalty levied by for furnishing inaccurate particulars of income. At the outset, we may like to mention that despite notifying neither anyone put in appearance on behalf of the assessee nor any adjournment was sought on behalf of the assessee. In the circumstances, we were of the opinion that the assessee is not ed in prosecuting the appeal and therefore same qua the assessee, after hearing arguments of the Departmental Representative. We have heard submission of the Ld. and perused the relevant material on r disallowance has been made by the Assessing Officer respect of the bogus purchases and which has been partly upheld by . Fisrt Appellate Authority (FAA). The order of the FAA has been further upheld by the Income-Tax Appeal Tribunal (ITAT). Assessing Officer, has levied penalty under section Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 2 12 respectively, in relation to penalty levied by for furnishing inaccurate particulars of income. At the outset, we may like to mention that despite notifying neither anyone put in appearance on behalf of the assessee nor any adjournment was sought on behalf of the assessee. In the circumstances, we were of the opinion that the assessee is not ed in prosecuting the appeal and therefore same were heard qua the assessee, after hearing arguments of the Ld. Departmental and perused the relevant material on record. In Assessing Officer in partly upheld by order of the FAA has been Tax Appeal Tribunal (ITAT). penalty under section 271(1)(c) of the Income the assessment years. On further ap confirmed the penalty in both the assessment years wide impugned orders. The relevant finding of the 2010-11 is reproduced as under: “I have carefully gone through the Assessment/ Penalty order, grounds of appeal, Statement of facts and written submissions of the appellant which is received through ITBA Portal. Now before me, during the course of appellate proceedings the appellant in h claimed this expenses in their books of AC. AO consist that the sales done by assessee is correct, payments have made in facts bank channels and judiciary also accepted the facts, those transaction never terms of 271(1)c) or it will not be the income as concealed. In this respect we hold the reliance, CIT vs Reliance Petro Product of 21010 R.322 ITR. Honorable SC followed by the Mumbai ITAT also. We see the para, we do not agree as the asse as well as Return which deals in themselves were not found to be inaccurate not could be included as the concealment of its income. Merely because the assessee had claimed the expenditure, was claimed not accepted opinion not attract the penalty u/s 271(1) (c). In the instant case the facts of the assessee are quiet similar. Income-Tax Act, 1961 (in short ‘the the assessment years. On further appeal, the Ld. CIT(A) has confirmed the penalty in both the assessment years wide impugned The relevant finding of the Ld. CIT(A) in assessment year 11 is reproduced as under: I have carefully gone through the Assessment/ Penalty order, grounds of appeal, Statement of facts and written submissions of the appellant which is received through ITBA Portal. Now before me, during the course of appellate proceedings the appellant in his written submission say's that...."the assessee has claimed this expenses in their books of AC. AO consist that the sales done by assessee is correct, payments have made in facts bank channels and judiciary also accepted the facts, those transaction never terms of 271(1)c) or it will not be the income as concealed. In this respect we hold the reliance, CIT vs Reliance Petro Product of 21010 R.322 ITR. Honorable SC followed by the Mumbai ITAT also. We see the para, we do not agree as the assessee furnishes all the details of IT Exp. as well as Return which deals in themselves were not found to be inaccurate not could be included as the concealment of its income. Merely because the assessee had claimed the expenditure, was claimed not accepted or acceptable to the revenue that itself would in our opinion not attract the penalty u/s 271(1) (c). In the instant case the facts of the assessee are quiet similar. Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 3 the Act’) for both peal, the Ld. CIT(A) has confirmed the penalty in both the assessment years wide impugned in assessment year I have carefully gone through the Assessment/ Penalty order, grounds of appeal, Statement of facts and written submissions of the appellant Now before me, during the course of appellate proceedings the is written submission say's that...."the assessee has claimed this expenses in their books of AC. AO consist that the sales done by assessee is correct, payments have made in facts bank channels and judiciary also accepted the facts, those transaction never falls under the terms of 271(1)c) or it will not be the income as concealed. In this respect we hold the reliance, CIT vs Reliance Petro Product of 21010 R.322 ITR. Honorable SC followed by the Mumbai ITAT also. We see the ssee furnishes all the details of IT Exp. as well as Return which deals in themselves were not found to be inaccurate not could be included as the concealment of its income. Merely because the assessee had claimed the expenditure, was claimed or acceptable to the revenue that itself would in our opinion not attract the penalty u/s 271(1) (c). In the instant case the From the Penalty order dated 30.03.2018, it is gathered that Ld. CIT(A), Thane has estima assessee has failed to give true information regarding total purchases of Rs. 87,87,645/ purchases is not being estimated here. It is only the profit embedd the total bogus purchases which is reasonable arrived at by the Ld. CIT(A). Hence, assessee has furnished inaccurate particulars for a fixed amount of purchases leading to inaccurate particulars assessee's income. In my opinion, from the above discus established that the assessee has with deliberate and willful intention, furnished inaccurate particulars. It is a matter of facts that the assessee has furnished inaccurate particulars and made wrong claims. The mistake on part of the was a deliberate step on the part of the assessee to furnish inaccurate particulars. The onus is on the assessee to establish that it had not furnished inaccurate particulars, but the assessee has failed to The case of the assessee falls within the ambit of Section of 271 (1)c) of the I.T. Act, 1961 for furnishing inaccurate particulars. In this respect I hold the reliance upon in the case of CIT Vs. Indian Metals & Ferro Alloys Ltd. (1994) 117 CTR ( mentioned that penalty will be imposed, if any inaccuracy in made in books of account or otherwise results in keeping off or hiding a portion of its income which is punishable as furnishing of inaccurate particulars of its income. Further in the case of CIT Vs. Drapco Electric Corporation (Guj), 122 ITR 341, it has been held that if the assessee failed to give accurate particulars as to his income, he can be found to be acting dishonestly and thus penalty is justified in such c From the Penalty order dated 30.03.2018, it is gathered that Ld. CIT(A), Thane has estimated the profit from Hawala purchases. However, assessee has failed to give true information regarding total purchases of Rs. 87,87,645/- made from hawala operators. Hence, quantum of bogus purchases is not being estimated here. It is only the profit embedd the total bogus purchases which is reasonable arrived at by the Ld. CIT(A). Hence, assessee has furnished inaccurate particulars for a fixed amount of purchases leading to inaccurate particulars assessee's income. In my opinion, from the above discussion, it is clearly established that the assessee has with deliberate and willful intention, furnished inaccurate particulars. It is a matter of facts that the assessee has furnished inaccurate particulars and made wrong claims. The mistake on part of the assessee cannot be said to be bona was a deliberate step on the part of the assessee to furnish inaccurate particulars. The onus is on the assessee to establish that it had not furnished inaccurate particulars, but the assessee has failed to The case of the assessee falls within the ambit of Section of 271 (1)c) of the I.T. Act, 1961 for furnishing inaccurate particulars. In this respect I hold the reliance upon in the case of CIT Vs. Indian Metals & Ferro Alloys Ltd. (1994) 117 CTR (Ori) 378, where it is clearly mentioned that penalty will be imposed, if any inaccuracy in made in books of account or otherwise results in keeping off or hiding a portion of its income which is punishable as furnishing of inaccurate particulars ome. Further in the case of CIT Vs. Drapco Electric Corporation (Guj), 122 ITR 341, it has been held that if the assessee failed to give accurate particulars as to his income, he can be found to be acting dishonestly and thus penalty is justified in such cases. Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 4 From the Penalty order dated 30.03.2018, it is gathered that Ld. CIT(A), ted the profit from Hawala purchases. However, assessee has failed to give true information regarding total purchases of made from hawala operators. Hence, quantum of bogus purchases is not being estimated here. It is only the profit embedded in the total bogus purchases which is reasonable arrived at by the Ld. CIT(A). Hence, assessee has furnished inaccurate particulars for a fixed amount of purchases leading to inaccurate particulars assessee's sion, it is clearly established that the assessee has with deliberate and willful intention, furnished inaccurate particulars. It is a matter of facts that the assessee has furnished inaccurate particulars and made wrong claims. The assessee cannot be said to be bona-fide one. This was a deliberate step on the part of the assessee to furnish inaccurate particulars. The onus is on the assessee to establish that it had not furnished inaccurate particulars, but the assessee has failed to do so. The case of the assessee falls within the ambit of Section of 271 (1)c) of In this respect I hold the reliance upon in the case of CIT Vs. Indian Ori) 378, where it is clearly mentioned that penalty will be imposed, if any inaccuracy in made in books of account or otherwise results in keeping off or hiding a portion of its income which is punishable as furnishing of inaccurate particulars ome. Further in the case of CIT Vs. Drapco Electric Corporation (Guj), 122 ITR 341, it has been held that if the assessee failed to give accurate particulars as to his income, he can be found to be acting Since the matter has travelled to Hon'ble ITAT and Hon’ble confirmed the findings of the Commissioner of Income Tax restricted the addition to Rs. 10,98,456/ 271(1)(c) is clearly attracted. In view of the by the A.O. in his Order dated 30.03.2018 for A.Y and the appeal of the appellant is dismissed. 4. Aggrieved, the assessee is before the levy of penalty. 5. Before the Ld. CIT(A), the assessee mainly argued that all information was duly provided in the return of income filed and there was no inaccurate particulars. According to the assessee only estimated addition has been upheld and therefore no penalty leviable in view of the decision of the Hon’ble Supreme Court in the case of CIT Vs Reliance Petro Product P CIT(A) however held that assessee made a wrong claim , which was not bonafide and therefore following the decision in the case of India Metal and Ferro Alloys Limited Since the matter has travelled to Hon'ble ITAT and Hon’ble confirmed the findings of the Commissioner of Income Tax restricted the addition to Rs. 10,98,456/-. Hence, the 271(1)(c) is clearly attracted. In view of the above discussion and circumstances, the penalty imposed by the A.O. in his Order dated 30.03.2018 for A.Y 2010-11 is confirmed and the appeal of the appellant is dismissed.” the assessee is before the Tribunal Before the Ld. CIT(A), the assessee mainly argued that all information was duly provided in the return of income filed and there was no inaccurate particulars. According to the assessee only estimated addition has been upheld and therefore no penalty in view of the decision of the Hon’ble Supreme Court in the CIT Vs Reliance Petro Product P. Ltd. (supra) CIT(A) however held that assessee made a wrong claim , which was fide and therefore following the decision in the case of Ferro Alloys Limited(supra) Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 5 Since the matter has travelled to Hon'ble ITAT and Hon’ble ITAT has confirmed the findings of the Commissioner of Income Tax (Appeals) . Hence, the penalty u/s penalty imposed 11 is confirmed Tribunal challenging the Before the Ld. CIT(A), the assessee mainly argued that all information was duly provided in the return of income filed and there was no inaccurate particulars. According to the assessee only estimated addition has been upheld and therefore no penalty was in view of the decision of the Hon’ble Supreme Court in the (supra). The Ld. CIT(A) however held that assessee made a wrong claim , which was fide and therefore following the decision in the case of (supra) and Drapco Electric Corporation (supra) by the Assessing Officer 6. In our opinion, the purchases has been held to of the information received from Maharashtra and the assessee failed to substantiate those purchases. Even the efforts made by the verification of those purchases by way of issue notice under s 133(6) and 131 of the parties were not traceable those facts and was asked to produce those purchase parties, however the assessee failed to do so. In the circumstances Ld. CIT(A) and ITAT has confirmed disallowance of part of the bogus purchases. In such circumstances, it is not a disallowance of expenses merely an estimate basis, but it is a disallowance in respect of a wrong committed furnishing of inaccurate particulars by the assessee. In our opinion, Electric Corporation (supra), Ld. CIT(A) upheld the penalty levied Assessing Officer. In our opinion, the purchases has been held to be bogus in view of the information received from Sales Tax Department Maharashtra and the assessee failed to substantiate those purchases. Even the efforts made by the Assessing Officer verification of those purchases by way of issue notice under s 133(6) and 131 of the Income Tax Act could not succeed parties were not traceable. The assessee was duly confronted with se facts and was asked to produce those purchase parties, however the assessee failed to do so. In the circumstances Ld. CIT(A) and ITAT has confirmed disallowance of part of the bogus purchases. In such circumstances, it is not a disallowance of expenses merely an estimate basis, but it is a disallowance in committed by the assessee, which h furnishing of inaccurate particulars by the assessee. In our opinion, Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 6 , Ld. CIT(A) upheld the penalty levied be bogus in view Sales Tax Department of Maharashtra and the assessee failed to substantiate those Assessing Officer for verification of those purchases by way of issue notice under section could not succeed as those see was duly confronted with se facts and was asked to produce those purchase parties, however the assessee failed to do so. In the circumstances both the Ld. CIT(A) and ITAT has confirmed disallowance of part of the bogus purchases. In such circumstances, it is not a disallowance of expenses merely an estimate basis, but it is a disallowance in by the assessee, which has resulted in furnishing of inaccurate particulars by the assessee. In our opinion, the Ld. CIT(A) has passed a reasoned order and we do not find any infirmity in the same. Accordingly impugned orders of the Ld. CIT(A) and dismiss by the assessee in both the assessment year 2010 7. In the result, both the appeals of the assessee Order pronounced in the open Court on Sd/- (ABY T. VARKEY JUDICIAL MEMBER Mumbai; Dated: 14/06/2022 Dragon Legal/Rahul Sharma, Sr. P.S. 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. //True Copy// the Ld. CIT(A) has passed a reasoned order and we do not find any in the same. Accordingly, we uphold the both the impugned orders of the Ld. CIT(A) and dismiss the grounds raised by the assessee in both the assessment year 2010-11 and 2011 In the result, both the appeals of the assessee are ounced in the open Court on 14/06/2022. Sd/- ABY T. VARKEY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai Mukesh Saligram Sharda ITA NO. 1907 & 1908/M/2021 7 the Ld. CIT(A) has passed a reasoned order and we do not find any we uphold the both the the grounds raised 11 and 2011-12. are dismissed. /06/2022. OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai