GEMINI OILS P. LTD, MUMBAI V. ITO 2(1)(4), MUMBAI

ITA 2039/MUM/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3775 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 05-03-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 02-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit
• Section: 143(3)

Judgement Text

ITA NO. ITA NO. ITA NO. ITA NO. 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD.. .. . PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 2039/MUM/2009 (ASSESSMENT YEAR 1996-97 ) DATE OF HEARING: 15/5/2013 DATE OF PRONOUNCEMENT: 15/5/2013 O R D E R PER RAJENDRA SINGH THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 6.2.2009 OF THE CIT(A) FOR THE ASSESSMENT YEAR 1996 -97/. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING LEVY OF PENALTY U/S 271 (1) (C) AMOUNTING TO RS. 1,38,07,907/- WHICH HAS BEEN CONFI RMED BY THE CIT (A). 2. THE FACTS IN BRIEF ARE THAT THE AO IN THE ORIGIN AL ASSESSMENT COMPLETED U/S 143(3) ON 30 TH MARCH 1999 HAD MADE THE FOLLOWING ADDITIONS. 1) UNACOUNTED PURCHASES RS. 50,00,000/- 2) UNEXPLAINED CASH CREDITS RS. 1,95,00,000/- 3) BOGUS SUNDRY CREDITORS RS. 1,16,73,100 4) UNACCOUNTED CASH CREDIT RS. 1,03,593/- GEMINI OILS P. LTD 2ND FLOOR, EMCA HOUSE, R. NO. 208, 289, SHAHI BHAGAT SINGH ROAD, FORT MUMBAI 400 001. PAN: AAACG1407C ITO 2(1) (4) MUMBAI AAYKAR BHAVAN MAHARSHI KARVE MARG, MUMBAI-400 020. APPELLANT RESPONDENT DEPARTMENT BY. SHRI PAVAN VED ASSESSEE BY: SHRI SANJI M. SHAH ITA NO. ITA NO. ITA NO. ITA NO. 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD.. .. . PAGE 2 OF 4 3. THE ASSESSEE DISPUTED THE ADDITION MADE IN THE A SSESSMENT ORDER. CIT (A) IN THE ORDER DATED 28.2.2000 HAD SET ASIDE THE ASSESSMENT FOR DE NOVO CONSIDERATION. THE AO IN THE FRESH ASSESSMENT ORDER PASSED U/S 143 (3)/250 MADE THE FOLLOWING ADDITIONS. UNDISCLOSED INVESTMENTS IN THE FORM OF BOGUS PURCHASES RS. 2,5014,190/- CREDITORS NOT PAYABLE (OPENING BALANCES IN THE A/CS OF DELHI PARTIES. RS. 50,03,000/- SUNDRY CASH CREDITS RS. 1,03,593/- 4. THE AO HAD ALSO INITIATED PENALTY PROCEEDINGS U/ S 271 (1(C). IN THE MEANTIME, CIT (A) IN THE ORDER DATED 19.1.2005 CONF IRMED THE ADDITIONS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENTS IN THE F ORM OF BOGUS PURCHASES AND CREDITORS NOT PAYABLE AMOUNTING TO RS . 2,50,14,190/- AND RS. 50,03,000/- RESPECTIVELY. CIT (A) UPHELD THE VI EWS TAKEN BY AO THAT THE ENTIRE PURCHASES OF RS. 2,50,14,190/- FROM DEL HI BASED PARTIES WERE BOGUS PURCHASES AS THE ASSESSEE COULD NEITHER PRODU CED THE PARTIES NOR COULD GIVE THE CURRENT ADDRESSES OF THE PARTIES. TH E PENDING BALANCES IN THE NAME OF SOME OF THE PARTIES AMOUNTING TO RS. 50 ,03,000/- HAD ALSO BEEN ADDED ON THE GROUND THAT THE PARTIES WERE NOT TRACEABLE AND THE SAME HAD BEEN CONFIRMED BY THE CIT (A). DURING THE PENALTY PROCEEDINGS, THE ASSESSEE AS PER THE AO DID NOT RESPOND TO THE S HOW CAUSE NOTICES DESPITE SUFFICIENT OPPORTUNITY BE PROVIDED. THE AO, THEREFORE, HELD THAT PENALTY U/S 271 (1) (C) WAS LEVIABLE IN RESPECT OF ADDITIONS CONFIRMED BY CIT (A), AGGREGATING TO RS. 3,0017,190/- AND ACCORD INGLY LEVIED PENALTY AT THE MINIMUM RATE OF 100% OF TAX SOUGHT TO BE EVADED AMOUNTING TO RS. 1,38,07,907/-. 5. IN APPEAL, CIT (A) OBSERVED THAT THE ASSESSEE HA D NOT PRODUCED ANY EVIDENCE NOR ADDRESSES OF THE PARTIES IN RELATION T O THE PURCHASES AND THE BALANCES NEITHER DURING THE ASSESSMENT PROCEEDINGS NOR DURING THE APPELLATE PROCEEDINGS BEFORE CIT (A), NOR EVEN DURI NG THE PENALTY ITA NO. ITA NO. ITA NO. ITA NO. 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD.. .. . PAGE 3 OF 4 PROCEEDINGS. CIT (A) ACCORDINGLY UPHELD THE ORDER O F AO LEVYING THE PENALTY U/S 271 (1) (C). AGGRIEVED BY THE SAID DEC ISION THE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 6. BEFORE US, LEARNED AR FOR THE ASSESSEE AT THE VE RY OUTSET SUBMITTED THAT ADDITIONS MADE IN THE ASSESSMENT BASED ON WHIC H PENALTY HAD BEEN LEVIED BY AO HAVE SINCE BEEN DELETED BY THE TRIBUN AL IN THE ORDER DATED 31.10.2012 IN ITA NO. 253/M/2005. IT WAS ACCORDINGL Y URGED THAT THE PENALTY LEVIED SHOULD BE DELETED. THE LEARNED DR FA IRLY CONCEDED THAT THE PENALTY CANNOT SURVIVE IN VIEW OF THE ADDITIONS ALR EADY DELETED. 7. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE RAISED IN THIS APPEAL IS REGARDING LEVY OF PENALTY U/S 271 (1) (C) AMOUNTING TO RS 1,38,07,907/- IN RELATION TO T HE ADDITIONS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENTS IN THE FORM OF B OGUS PURCHASES AND CREDITORS NOT PAYABLE AGGREGATING TO RS. 3,00,17,19 0/-. THE SAID ADDITIONS BASED ON WHICH THE PENALTY HAD BEEN LEVIED HAVE ALR EADY BEEN CONSIDERED BY THE TRIBUNAL IN THE ORDER DATED 31.10.2012 IN IT A NO. 2563/M/2005. THE TRIBUNAL IN THE SAID ORDER NOTED THAT CIT (A) H AD SET ASIDE THE ORIGINAL ASSESSMENT ORDER FOR MAKING FRESH ASSESSME NT ORDER DE NOVO IN RELATION TO ADDITIONS MADE. BUT THE AO IN THE FRESH ASSESSMENT HAS MADE ADDITIONS TOTALLY ON DIFFERENT GROUNDS. FOR EXAMPLE THE AO IN THE ORIGINAL ASSESSMENT HAD MADE ADDITION OF RS.50,00,000 ON ACC OUNT OF UNACCOUNTED PURCHASES, BUT THE AO IN THE FRESH ASSE SSMENT ORDER MADE ADDITION OF RS. 2,50,14,190/- ON ACCOUNT OF UNDISCL OSED INVESTMENTS IN THE FORM OF BOGUS PURCHASES. SIMILARLY, THE AO IN T HE ORIGINAL ASSESSMENT HAD MADE ADDITION OF RS. 11, 67,360/- ON ACCOUNT OF FIVE SUNDRY CREDITORS BEING NOT GENUINE, BUT THE AO IN THE FRESH ASSESSME NT MADE ADDITION OF RS.50,03,000/- ON ACCOUNT OF CREDITORS NOT PAYABLE. THE TRIBUNAL, THEREFORE, QUASHED THE ASSESSMENT ORDER PASSED BY A O BEING BEYOND JURISDICTION SINCE, THE ADDITIONS MADE BY AO STAND DELETED THE PENALTY ITA NO. ITA NO. ITA NO. ITA NO. 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 2039/MUM/2009 GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD. GEMINI OILS PVT. LTD.. .. . PAGE 4 OF 4 BASED ON SUCH ADDITIONS CANNOT SURVIVE. WE, THEREFO RE, SET ASIDE THE ORDER OF CIT(A) AND DELETE THE PENALTY LEVIED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E. 15-5- 2013. SD/- SD/- (AMIT SHUKLA ) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 15TH MAY, 2013. SK SR. P.S. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI