MOHAMMED SHARIF, MUMBAI V. INCOME TAX OFFICER WARD 30(3)(3), MUMBAI

ITA 2408/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5423 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS JOTHILAKSHMI NAYAK
• Keywords: Bogus purchase; Difference of opinion; Set aside
• Section: 271(1)(c); 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2408/M/2018 ASSESSMENT YEAR: 2009-10 MR. MOHAMMED SHARIF, D-6, GANRAYA CHS LTD., PLOT NO.34, GANESH NAGAR, KANDIVALI (WEST), MUMBAI 400 067 PAN: AJSPS2522A VS. INCOME TAX OFFICER, WARD 30(3)(3), C-13, PRATYAKSHA KAR BHAWAN, BANDAR KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : MRS. JOTHILAKSHMI NAYAK, D.R. DATE OF HEARING : 14.05.2019 DATE OF PRONOUNCEMENT : 20.05.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 19.02.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GRO UNDS OF APPEAL IS AGAINST THE CONFIRMATION OF PENALTY OF RS .5,53,318/- BY LD. CIT(A) AS LEVIED BY THE AO UNDER SECTION 271(1) (C) OF THE ACT. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS F RAMED UNDER SECTION 143(3) READ WITH SECTION 147 VIDE ORD ER DATED 24.03.2015 ASSESSING THE INCOME AT RS.20,45,180/- A S AGAINST THE RETURN OF INCOME OF RS.3,91,034/- BY ADDING RS. 16,54,146/- ON ACCOUNT OF BOGUS PURCHASES. THE PENALTY PROCEEDI NGS WERE ITA NO.2408/M/2018 MR. MOHAMMED SHARIF 2 ALSO INITIATED FOR FURNISHING OF INACCURATE PARTICU LARS OF INCOME AND CONCEALMENT OF TWO PARTICULARS OF INCOME IN THE ASSESSMENT ORDER BY ISSUING PENALTY NOTICE UNDER SECTION 271( 1)(C) DATED 26.08.2015 WHICH WAS NOT REPLIED BY THE ASSESSEE. THEREAFTER, THE AO FRAMED THE ASSESSMENT BY LEVYING MINIMUM PE NALTY EQUAL TO 100% OF THE TAX SOUGHT TO BE EVADED AT RS. 5,53,318/- BY RELYING ON THE DECISION OF APEX COURT IN THE CAS E OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS LTD. (2008) 166 TAXMAN.COM 65 (SC) AND ALSO THE DECISION OF APEX CO URT IN THE CASE OF VEGETABLE PRODUCTS LTD. 88 ITR 192 (SC) VID E ORDER DATED 28.09.2015 PASSED UNDER SECTION 271(1)(C) OF THE AC T. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ALS O AFFIRMED THE ORDER OF AO BY HOLDING THAT THE AO HAS RIGHTLY IMPOSED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THUS JUSTIFIED THE IMPOSITION OF PENALTY. 5. THE LD. A.R. SUBMITTED BEFORE US THAT THE CO-ORD INATE BENCH OF THE TRIBUNAL IN ITA NO.2409/M/2018 A.Y. 20 09-10 VIDE ORDER DATED 19.12.2018 PARTLY ALLOWED THE APPE AL OF THE ASSESSEE IN QUANTUM BY DIRECTING THE AO TO APPLY A PROFIT RATE OF 12.5% ON THE SAID BOGUS PURCHASES AND THUS THE LD. A.R. SUBMITTED THAT IT IS A CASE OF ESTIMATION OF INCOME ON WHICH THE PENALTY IS NOT IMPOSABLE. THIS IS A CLEAR CUT CASE OF DIFFERENCE OF OPINION AS THE AO ADDED 100% OF THE AMOUNT WHEREAS THE CO- ORDINATE BENCH OF THE TRIBUNAL HAS SUSTAINED THE AD DITION TO THE TUNE OF 12.5% AND THEREFORE PENALTY IN SUCH A SCENA RIO CAN NOT BE IMPOSED AS HAS BEEN DECIDED BY THE CO-ORDINATE B ENCHES OF THE TRIBUNAL IN A NUMBER OF CASES .THE LD AR THERE FORE PRAYED BEFORE THE BENCH TO SET ASIDE THE ORDER OF CIT(A) A ND DIRECT THE AO TO DELETE THE PENALTY. ITA NO.2408/M/2018 MR. MOHAMMED SHARIF 3 6. THE LD. D.R., ON THE OTHER HAND, STRONGLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT IN THIS CASE THE ASSESSMENT W AS FRAMED BY THE AO AFTER MAKING EX-PARTE ADDITION OF RS.16,54,1 46/- TOWARDS 100% OF THE BOGUS PURCHASES WHICH THE CO-O RDINATE BENCH OF THE TRIBUNAL IN QUANTUM PROCEEDINGS REDUCE D TO 12.5% OF SUCH PURCHASES. IN OUR OPINION, THIS IS A CLEAR CUT CASE WHERE THE INCOME HAS BEEN ESTIMATED BY APPLYING A PERCENT AGE OF 12.5% AND THEREFORE THE PENALTY UNDER SECTION 271(1 )(C) CAN NOT BE IMPOSED. WE ARE, THEREFORE, SETTING ASIDE TH E ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.05.2019. SD/- SD/- (SANDEEP GOSAIN) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 20.05.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.