MR.ASHIK ALI UNWALA, MUMBAI V. INCOME TAX OFFICER 20(1)(2), MUMBAI

ITA 2271/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7417 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALDLD
• Assessee Lawyers: C V DHARKAR LD
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 133(6); 2

Judgement Text

1 ITA NO.2271/MUM/2018 MR. ASHIK ALI UNWALA ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.2271/MUM/2018 ( / ASSESSMENT YEAR:2009-10) MR. ASHIK A LI UNWALA G/201, VEENA BEENA APTS. A.D. MARG, SEWREE. MUMBAI-400 015. / VS. ITO - 20 (1)( 2 ) 1 ST FLOOR, PIRAMAL CHAMBERS LALBAUG, MUMBAI. ! ./ ./PAN/GIR NO. AAJPU-6927-H ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#' / APPELLANT BY : SHRI C.V. DHARKAR - LD.AR $%!#' / RESPONDENT BY : SHRI S. MICHAEL JERALD - LD.DR / DATE OF HEARING : 15/10/2019 / DATE OF PRONOUNCEMENT : 15/10/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEA R 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-32, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-32/IT-408/ITO- 2 ITA NO.2271/MUM/2018 MR. ASHIK ALI UNWALA ASSESSMENT YEAR-2009-10 20(1)(2)/2015-16 DATED 24/01/2018 QUA CONFIRMATION OF PENALTY OF RS. 2.32 LACS U/S 271(1)(C) AS LEVIED BY LEARNED AO VIDE PEN ALTY ORDER DATED 27/08/2015. 2. FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THE ASSESSEE HAS BEEN SADDLED WITH ESTIMATED ADDITIONS OF 12.5% OF ALLEGE D BOGUS PURCHASES OF RS.54.21 LACS IN AN ASSESSMENT FRAMED U/S 143(3) R. W.S. 147 ON 27/02/2015. PURSUANT TO RECEIPT OF CERTAIN INFORMAT ION FROM SALES TAX DEPARTMENT, MAHARASHTRA, IT WAS ALLEGED THAT THE AS SESSEE OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.54.21 LACS FROM 11 ENTITIES. ALTHOUGH THE ASSESSEE, IN DEFENSE, PRODUCED DETAILS OF PURCHASE, CORRESPONDING SALES MADE AGAINST THOSE PURCHASES, BANK STATEMENTS EVIDE NCING PAYMENT TO THE STATED SUPPLIERS, HOWEVER, IT FAILED TO PRODUCE ANY OF THE SUPPLIER FOR CONFIRMATION OF ACCOUNTS. NOTICES ISSUED U/S 133(6) ELICITED NO SATISFACTORY RESPONSE. THE FACTUAL MATRIX LED LD. AO TO BELIEVE THAT FULL VERIFICATION OF QUANTITY PURCHASED FROM THE STATED PARTIES REMAINED UNVERIFIABLE AND THEREFORE, HE ESTIMATED ADDITIONS AGAINST THE SAME @12.5% TO PLUG THE LEAKAGE OF REVENUE. 3. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE U/S 271(1)(C) FOR FILING INACCURATE PARTIC ULARS OF INCOME. ALTHOUGH THE ASSESSEE OPPOSED THE LEVY OF PENALTY, HOWEVER, NOT SATISFIED, LD. AO LEVIED PENALTY OF RS.2.32 LACS VIDE ORDER DATED 27/ 08/2015. ALTHOUGH THE ASSESSEE AGITATED THE LEVY OF PENALTY BEFORE LD. CI T(A), HOWEVER, THE ASSESSEES SUBMISSIONS COULD NOT FIND FAVOR WITH LD . CIT(A) WHO CONFIRMED 3 ITA NO.2271/MUM/2018 MR. ASHIK ALI UNWALA ASSESSMENT YEAR-2009-10 THE PENALTY SINCE THE ASSESSEE FAILED TO PROVE THE GENUINENESS AND BONA- FIDE OF THE TRANSACTIONS. 4. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED RELEVANT MATERIAL ON RECORD AND DELIBERATED ON JUDICIAL PRONOUNCEMENTS AS CITED BEF ORE US. 5. UPON CAREFUL CONSIDERATION OF QUANTUM ASSESSMENT ORDER AND PENALTY ORDER, IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS BEEN SADDLED ONLY WITH ESTIMATED ADDITIONS OF 12.5% IN THE BACKDROP OF THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE SUPPLIERS FOR CONFIRMATION OF TRANSACTIONS. NEVERTHELESS, THE ASSESSEE WAS IN POSSESSION OF PRI MARY PURCHASES DOCUMENTS AND HAD FURNISHED PURCHASE DETAILS AND CO RRESPONDING SALES MADE AGAINST THOSE PURCHASES. THE PAYMENT TO THE SU PPLIERS WAS THROUGH BANKING CHANNELS. THEREFORE, IT IS NOT THE CASE WHE RE THE CLAIM WAS COMPLETELY FOUND TO BE BOGUS OR NON-GENUINE WHICH I S ALSO EVIDENT FROM THE FACT THAT LD.AO, HIMSELF, CHOSE TO MAKE ADDITIONS @ 12.5% INSTEAD OF MAKING FULL DISALLOWANCE. IN OTHER WORDS, A SUBSTAN TIAL CLAIM HAS BEEN ACCEPTED BY THE REVENUE. THEREFORE, THE ADDITIONS O N WHICH PENALTY HAS BEEN IMPOSED, ARE PURELY ON ESTIMATION BASIS AND TH E SAME, IN OUR CONSIDERED OPINION, WOULD NO SHOW ANY MALA-FIDE INT ENTION ON THE PART OF THE ASSESSEE TO CONCEAL ITS INCOME. THEREFORE, BY D ELETING THE IMPUGNED PENALTY, WE ALLOW THE APPEAL. 4 ITA NO.2271/MUM/2018 MR. ASHIK ALI UNWALA ASSESSMENT YEAR-2009-10 6. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 15/10/2019 SR.PS:-JAISY VARGHESE 78 98 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. H I $ J , J , / DR, ITAT, MUMBAI 6. I KLM / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.