KGK CREATIONS (INDIA) P.LTD, MUMBAI V. DCIT CIR 5(2), MUMBAI

ITA 2448/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48560 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Agreed addition
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI R,S. SYAL, A.M. AND SHRI V. DURGA RAO, J.M. ITA NO. 2448/MUM/2010 ASSESSMENT YEAR: 1997-98 M/S KGK CREATIONS (INDIA) PVT. LTD., APPELLANT 4 TH FLOOR, KGK TOWER, DUTTA PADA ROAD, MR. SHREENATH HYUNDAI SERVICE CENTRE, BORIVILI (EAST) MUMBAI 400 066. (PAN AABCK4456A) VS. THE DY. COMMISSIONER OF INCOME-TAX, RESPONDENT RANGE 5(2), MUMBAI. APPELLANT BY : MR. VIJAY MEHTA RESPONDENT BY : MR. MANVENDRA GOYAL . ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- 9, MUMBAI, PASSED ON 29/01/2010 FOR THE ASS ESSMENT YEAR 2006-07. 2. THE SUBSTANTIAL GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS IN RESPECT OF PENALTY OF RS. 71,62,760/- U/S 271(1) (C) OF THE ACT. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER HELD THAT THE ASSESSEE CLAIMED BOGUS PURCHASES TO THE TU NE OF RS. 2,12,79,740/- IN ITS RETURN OF INCOME WHICH WAS DET ECTED BY THE SURVEY PARTY AND BROUGHT TO TAX IN ASSESSMENT PROCE EDINGS. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSE SSEE HAD DELIBERATELY AND CONSCIOUSLY ATTEMPTED TO CONCEAL T HE TRUE PARTICULARS ITA NO. 2508/M/2010 HEMANDAS J. PARIYANI 2 OF ITS INCOME AND CONSEQUENTLY ATTEMPTED TO EVADE T HE PAYMENT OF TAX THEREON. THEREFORE, THE ASSESSING OFFICER INITIATE D PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PEN ALTY OF RS. 71,62,760/- ON THE GROUND THAT THE ASSESSEE HAD CO NSCIOUSLY AND DELIBERATELY FILED INACCURATE PARTICULARS OF ITS IN COME. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSIN G OFFICER. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE H AS CANVASSED THAT THE ISSUE IN DISPUTE IS COVERED BY THE DECISIO N OF ITAT IN ASSESSEES OWN CASE FOR AY 2005-06 IN ITA NO. 2320/ MUM/2009 VIDE ITS ORDER DATED 11 TH MARCH, 2010. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE HAS RELIED UPON THE ORDERS OF THE REVENUE AUTHORITI ES, BUT, NOT CONTROVERTED THE SUBMISSIONS MADE BY THE LEARNED CO UNSEL FOR THE ASSESSEE. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE ITAT IN ASSESS EES OWN CASE FOR AY 2005-06 (SUPRA) DELETED THE SIMILAR PENALTY LEVI ED U/S 271(1)(C). THE RELEVANT FINDINGS OF THE ITAT ARE EXTRACTED BEL OW:- 13. THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MALU ELECTRODES (P) LTD. (NAG.) 27 TTJ 599 WAS CON SIDERING THE SITUATION WHERE, IF THE ASSESSEE WOULD HAVE CONTEST ED THE ADDITION IN STEAD OF AGREEING FOR THE SAME, THE ADD ITION COULD NOT HAVE BEEN MADE AND IN SUCH A SITUATION IT OBSERVED THAT IT IS POSSIBLE THAT THE ASSESSEE WOULD HAVE MADE THE SURR ENDER DUE TO A NUMBER OF POSSIBLE REASONS AND IN SUCH A SITUATIO N, NO PENALTY CAN BE LEVIED. IT HELD THAT MERE FACT OF AN AGREED ADDITION, DOES NOT RESULT INTO A CONCLUSION THAT THE AMOUNT AGREED TO BE ADDED AS INCOME WOULD RESULT IN CONCEALED INCOME. THE BEN CH RELIED ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF KANBAY SOFTWARE INDIA (P) LTD. VS. DCIT (2009) 22 DTR (PUN E) 481. 7. SINCE THE FACTS OF THE CASE UNDER CONSIDERATION IS MATERIALLY IDENTICAL TO THAT OF THE CASE DECIDED BY THE ITAT I N ASSESSEES OWN CASE FOR AY 2005-06, WE RESPECTFULLY FOLLOW THE DEC ISION OF THE SAME AND IN THE LIGHT OF THAT WE HEREBY DELETE THE PENAL TY OF RS. ITA NO. 2508/M/2010 HEMANDAS J. PARIYANI 3 71,62,760/- U/S 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 29 TH APRIL, 2011. SD/- SD/- (R.S.SYAL) (V. DURGA R AO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 29 TH APRIL, 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV