Shri Samir H Doshi, Mumbai V. Income Tax Officer, 26(3)(1), Mumbai

ITA 2749/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2493 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: NARAYAN ATAL
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 2749/MUM/2019 : A.Y : 2009 - 10 SAMIR H. DOSHI 24, RAMSHARAN, 3 RD FLOOR, PLOT NO. 45, SION (WEST), MUMBAI 400 022. PAN : AAQPD2202F (APPELLANT) VS. INCOME TAX OFFICER 26(3)(1), MUMBAI. (RESPONDENT) ASSESSEE BY : SHRI NARAYAN ATAL REVENUE BY : MS. SMITA VERMA DATE OF HEARING : 09/11/2020 DATE OF PRONOUNCEMENT : 17 /11/2020 O R D E R THIS IS AN APPEAL BY THE ASSESSEE, WHEREIN IT IS URGED THAT THE LEARNED COMMISSIONER OF I NCOME T AX (A PPEALS ) - 38 (IN SHORT LEARNED CIT(A)) HAS ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AMOUNTING TO RS.6,60,000/ - BY ORDER DATED 29.09.2015 PERTAINING TO ASSESSMENT YEAR 2009 - 10. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IN THIS CASE IS ENGAGED IN THE BUSINESS AS RESELLER AND SUPPLIER OF IRON AND STEEL, HARDWARE, ETC. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE DISALLOWANCE OF 12.5% OF THE PURCHASES RESULTING IN ADDITION OF RS.18,91,3 8 3/ - . PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.6,60,000/ - WAS ALSO LEVIED. 3. UPON ASSESSEES APPEAL, LEARNED CIT(A) UPHELD THE PENALTY BY INTER ALIA OBSERVING THAT THE ASSESSING OFFICER WAS WRONG IN COMPUTING THE AMOUNT OF 2 ITA NO. 2749/MUM/2019 SAMIR H. DOSHI ADDITION, WHICH SHOULD HAVE BEEN RS.9,45, 691 / - . HENCE, HE DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE PEN ALTY. THE RESULTANT PENALTY WOULD ONLY BE RS.3,30,000/ - . 4. AGAINST THIS ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. I FIND THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAS BEEN DONE ON ESTIMATED BASIS. SINCE ALL THE DETAILS WERE FURNISHED, ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. I FURTHER NOTE THAT THERE IS LACK OF APPLICATION OF MIND BY THE ASSESSING OFFICER IN MAKING THE ADDITION. WHILE STATING THAT HE IS DISALLOWING 12.5% OF BOGUS PURCHASES OF RS.75,65,531/ - , HE HAS ARRIVED AT A FIGURE OF RS.18,91,383/ - WITH REFERENCE TO WHICH PENALTY IS LEVIED. THE LEARNED CIT(A) IS WRONG IN HOLDING THAT PENALTY UNDER SECTION 271 (1)(C) IN THIS CASE IS SUSTAINABLE. I FURTHER NOTE THAT THE CONDUCT OF THE ASSESSEE IN THIS CASE CANNOT BE CONSIDERED TO BE CONTUMACIOUS TO WARRANT LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. THIS PROPOSITION IS SUPPORTED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS STATE OF ORISSA, 83 ITR 26 (SC) . 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED U N D E R R U L E 3 4 ( 4 ) O F I T A T R U L E S ON 1 7 T H NOVEMBER, 2020. SD/ - ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI, DATE : 1 7 T H NOVEMBER, 20 20 *SSL* 3 ITA NO. 2749/MUM/2019 SAMIR H. DOSHI COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SM C BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI