DCIT, Circle - 1, Thane V. M/s Ashida Electronics Pvt. Ltd, Thane

ITA 2769/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4203 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 271(1)(c); 143(3); 133A; 133(6); 147; 148

Judgement Text

ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.2769/MUM/2019 (ASSESSMENT YEARS: 2008 - 09) DY. COMMISSIONER OF INCOME TAX, CIRCLE - 1, THANE, 6 TH FLOOR, ASHAR IT PARK, B WING, WAGLE INDUSTRIAL ESTATE, THANE - 400604 VS. M/S ASHIDA ELECTRONICS PVT. LTD. ASHIDA HOUSE, PLOT NO.A - 308, ROAD NO.21, WAGLE ESTATE, THANE WEST - 400604 PAN AABCA5020G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MICHAEL JERALD, D .R RESPONDENT BY: SHRI SUBODH RATNAPARKHI , A .R DATE OF HEARING: 26 .10.2020 DATE OF PRONOUNCEMENT: 27 .10.2020 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 1, MUMBAI, DATED 21.02.2019, WHICH IN TURN ARISES FROM THE PENALTY ORDER PASSED UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED. 28.08.2015 FOR A.Y. 2008 - 09. THE REVENUE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S 271(L)(C) WITHOUT PROPERLY APPRECIATING THE DECISIONS OF THE HON'BLE APEX COURT IN THE CASE OF MAK DATA PVT. LTD. VS CIT ( CIVIL APPEAL NO. 9772 OF 2013 )', THE HON'BLE GU JARAT HIGH COURT'S DECISION IN THE CASE OF N. K. PROTEINS LTD, TAX APPEAL NO. 242 OF 2003 DATED 20/06/2016 AGAINST WHICH THE SLP ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 2 WAS DISMISSED BY THE HON'BLE SUPREME COURT AND ALSO IGNORING THE FACT THAT DEPARTMENT RECEIVED SPECIFIC CREDIBLE INFORMATION IN THIS CASE FROM THE SALES TAX DEPARTMENT OF THE STATE GOVERNMENT OF MAHARASHTRA' IN RESPECT OF NON - GENUINE PURCHASES. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETI NG THE PENALTY LEVIED U/S 271(1 )(C) WITHOUT APPRECIATING THE FACT THAT THERE WAS A DEFINITE FINDING IN THE ASSESSMENT ORDER IN RESPECT OF BOGUS PURCHASES AND OF FURNISHING INACCURATE PARTICULARS OF INCOME RELATING TO PURCHASES RESULTING INTO CONCEALMENT OF INCOME. 3. WHETHER ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) WITHOUT APPRECIATING THE FACT THAT THERE WAS AN ADMISSION OF ADDITIONAL INCOME IN RESPECT BOGUS PURCHASES DURING THE SURVEY U /S 133A AND THE ADMISSION OF ADDITIONAL INCOME WAS NOT A VOLUNTARY ADMISSION BY THE A SSESSEE BUT IT WAS DUE TO SURVE Y ( WHICH CONCLUSIVELY PROVES FURNISHING INACCURATE PARTICULARS OF INCOME RELATING TO PURCHASES RESULTING INTO CONCEALMENT OF INCOME. 4. IT IS HUMBLY REQUESTED THAT PRESENT APPEAL IS BEING FILED IN ACCORDANCE WITH THE CBDT'S INSTRUCTION NO. 3/2018 DATED 11/07/2018 AMENDED VIDE LETTER DATED 20.08.20 18 AS PER PARA 10(E) OF THE SAID CIRCULAR. THEREFORE, THE ORDER OF THE CIT(A) MAY KINDLY BE VA CATED AND THAT OF THE AO MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY GROUND OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2008 - 09 ON 30.09.2008, DECLARING ITS TOTAL INC OME AT RS.4,78,51,960/ - . SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT REGARDING BOGUS PURCHASES BOOKED BY THE ASSESSEE, A SURVEY UNDER SEC. 133 A OF THE ACT WAS CONDUCTED AT THE ASSESSEE S PREMISES ON 18.02.2013. DURING THE COURSE OF THE SURVEY ACTION IT WAS FOUND THAT THE ASSESSEE HAD INTER ALIA INFLATED ITS PURCHASES FOR THE YEAR UNDER CONSIDERATION BY PROCURING ACCOMMODATION BILLS AMOUNTING TO RS.8,39,450/ - , VIZ. (I) M/S MANAV IMPEX: RS.3,96,900/ - ; (II) M/S CORAL TRADING COMPANY: RS.3,50,550/ - ; AND (III) M/S CRYOTIN TRADING COMPANY LTD.: RS.92,000/ - . THE AFORESAID FACT OF INFLATION OF PURCHASES WAS ACCEPTED BY THE ASSESSEE IN HIS STATEMENT RECORDED DURING THE C OURSE OF THE SURVEY PROCEEDINGS . 3. I N THE BACKDROP OF THE AFORESAID FACTS, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC. 147 OF THE ACT. HOWEVER, MUCH BEFORE THE ISSUE OF ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 3 NOTICE U/S 148, THE ASSESSEE COMPANY HAD FILED A REVISED COMPUTATION OF INCOME STATEMENT ON 20.03.2014. IN ITS AFORESA ID REVISED COMPUTATION OF INCOME THE ASSESSEE HAD ON ITS OWN DISALLOWED THE PURCHASES AMOUNTING TO RS.5,23,050/ - (NET PURCHASES), FOR COMPUTING ITS INCOME FOR THE YEAR UNDER CONSIDERATION. IN COMPLIANCE TO NOTICE ISSUED UNDER SEC.148, DATED 20.03.2014, THE ASSESSEE SUBMITTED THAT ITS PAPER RETURN FILED ON 20.03.2014 DECLARING A TOTAL INCOME OF RS.4,83,75,010 / - MAY BE TREATED AS THE RETURN FILED IN COMPLIANCE TO THE AFORESAID NOTICE. 4. DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY T HE A.O THAT AS AGAINST THE DECLARATION OF RS.8,39,450/ - MADE BY THE ASSESSEE IN THE COURSE OF THE SURVEY A CTION UNDER SEC. 133A , ONLY PURCHASES AMOUNTING TO RS.5,23,050/ - WERE DISALLOWED BY THE ASSESSEE. IN THE BACKDROP OF THE AFORESAID FACTS THE A.O CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE PURCHASES OF RS.3 ,16,400/ - WHICH WERE CLAIMED TO HAVE BEEN MADE FROM M/S MANAV IMPEX MAY NOT BE CONSIDERED AS BOGUS AND THEREIN DISALLOWED. I N REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT POST SURVEY PROCEEDINGS, ON VE RIFYING THE PURCHASE BILL FILE AND OTHER VOLUMINOUS RECORDS, IT WAS ABLE TO FIND THE OCTROI DECLARATION FORMS IN RESPECT OF PURCHASES OF RS.3,16,4000/ - MADE FROM M/S MANAV IMPEX . HOWEVER , THE A.O I N ORDER TO VERIFY THE GENUINENESS AND VERACITY OF THE A FORESAID PURCHASE TRANSACTIONS CALLED UPON THE ASSESSEE TO PRODUCE THE AFOREMENTIONED PARTY . FURTHER, THE ASSESSEE WAS ALSO DIRE CTED TO PLACE ON RECORD THE COPIES OF TRANSPORT RECEIP T S , DE TAILS OF VEHICLES EXPENSES, COPIES OF OCTROI RECEIPTS/DELIVERY CHALLANS ETC. PERTAINING TO THE IMPUGNED PURCHASES CLAIMED TO HAVE BEEN MADE FROM M/S MANAV IMPEX. IN COMPLIANCE, THE ASSESSEE SUBMITTED COPY OF BILLS OF M/S MANAV IMPEX, COPY OF PURCHASE ORDER AND COPY OF DECLARATION FOR OCTROI EXEMPTION IN RESPECT OF THE PURCHASES OF RS.3,16,400/ - MADE FROM M/S MANAV IMPEX. IN ORDER TO VERIFY THE VERACITY OF THE AFORESAID PURCHASE TRANSACTION S THE A.O ISSUED A NOTICE UNDER SEC. 133(6) TO M/S MANAV IMPEX. HOWEVER, THE AFORESAID PARTY VIDE ITS REPLY DATED 05.01.2015 DECLINED OF HAVING CARRIED OUT ANY SUCH TRANSACTION WITH THE ASSESSEE COMPANY. IN THE BACKDROP OF THE AFORESAID FAC TS THE A.O HELD A ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 4 CONVICTION THAT THE ASSESSEE HAD NOT PURCHASED THE GOODS FROM THE AFOREMENTIONED PARTY I.E M/S MANAV IMPEX AND HAD IN FACT PROCURED THE GOODS UNDER CONSIDERATION FROM THE OPEN/GREY MARKET. OBSERVING, THAT THE ASSESSEE WAS FACTUALLY IN POSSESSION OF THE GOODS UNDER CONSIDERATION, THE A.O RESTRICTED THE ADDITION IN RESPECT OF THE IMPUGNED PURCHASES FROM THE AFORESAID PARTY TO THE EXTENT THE ASSESSEE WOULD HAD BENEFITTED BY PROCURING THE GOODS FROM THE OPEN/GREY MARKET. ACCORDINGLY, TH E A.O RESTRICTED THE ADDITION TO 20% OF THE AGGREGATE VALUE OF THE IMPUGNED PURCHASES OF RS.3,16,400/ - WHICH WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTY AND MADE A RESULTANT ADDITION OF RS.63,280/ - . THE A.O WHILE CULMINATIN G THE ASSESSMENT ALSO INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) OF THE ACT . SUBSEQUENTLY, THE A.O CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE IMPOSED ON IT. AS THE REPLY FILED BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O, THE LAT T ER TAKING COGNIZANCE OF THE INCOME ASSESSED IN THE HANDS OF THE ASSESSEE UNDER SEC. 143(3) R .W.S 147 IN THE BACKDROP OF ITS RE TURNED INCOME, THEREIN IMPOSED PENALTY UNDER SEC. 271(1)(C) AS REGARDS THE AMOUNT OF RS.5,86,330/ - [I .E RS.4,83,75,010/ - (INCOME RETURNED BY THE ASSESSEE IN COMPLIANCE TO NOTICE ISSUED UNDER SEC. 148) ( - ) RS.4,78,51,960/ - (ORIGINAL RETURNED INCOME OF THE ASSESSEE) (+) RS.63,280/ - (ADDITION AS REGARDS THE PROFIT/MARGIN ESTIMATED BY THE A.O IN RESPECT OF BO GUS PURCHASES OF RS.3,16,400/ - WHICH WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM M/S MANAV IMPEX)]. ACCORDINGLY, THE A.O IMPOSED A PENALTY OF RS.1,99,294/ - IN THE HANDS OF THE ASSESSEE, VIDE HIS ORDER PASSED UNDER SEC. 271(1)(C), DATED 28.08.2015. 5. AGGRIEVED, THE ASSESSEE ASSAILED THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) BEFORE THE CIT(A). OBSERVING, THAT THERE MAY BE A NUMBER OF REASONS ON THE PART OF THE ASSESSEE IN AGREEING TO AN ADDITION AND NOT CARRYING THE MATTER ANY FURTHER IN AP PEAL, THE CIT(A) WAS OF THE VIEW THAT MERELY BECAUSE THE ASSESSEE HAD NOT ASSAILED THE QUANTUM ASSESSMENT ANY FURTHER IN APPEAL WOULD NOT JUSTIFY LEVY OF PENALTY UNDER SEC. 271(1)(C) OF THE ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 5 ACT. APROPOS THE DISALLOWANCE OF THE IMPUGNED BOGUS PURCHASES AND THE CONSEQUENTIAL ADDITION MADE BY THE A.O, THE CIT(A) WAS OF THE VIEW THAT A SIMPLICITOR DISALLOWANCE OF A PERCENTAGE OF PURCHASES DE HORS ANY FINDING OF CONCEALMENT ON THE PART OF THE ASSESSEE WOULD NOT JUSTIFY LEVY OF PENALTY UNDER SEC. 271(1)(C) OF THE ACT. IN FACT, IT WAS OBSERVED BY THE CIT(A) THAT DISALLOWANCE OF A PERCENTAGE OF PURCHASES WOULD NOT AUTOMATICALLY JUSTIFY LEVY OF PENALTY UNDER SEC. 271(1)(C) OF THE ACT. IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS THE CIT(A) VACATED THE PENALTY OF RS. 1,99,294/ - THAT WAS IMPOSED BY THE A.O UNDER SEC. 271(1)(C) OF THE ACT. 6. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT( A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. AS IS DISCERNIBLE FROM THE ASSESSMENT ORDER, THE ASSESSEE CO MPANY IN ITS RETURN OF INCOME FILED UNDER SEC. 148 OF THE ACT HAD DISALLOWED PURCHASES OF RS.5,23,050/ - . AS OBSERVED BY US HEREINABOVE, THE AFORESAID DISALLOWANCE OF PURCHASES BY THE ASSESSEE WAS INTER ALIA TOWARDS UNVERIFIABLE PURCHASES AS WERE ADMITTED B Y IT IN THE COURSE OF THE SURVEY PROCEEDINGS VIZ. (I) M/S CORAL TRADING COMPANY: RS.3,50,550/ - ; AND (II)M/S CRYOTIN TRADING COMPANY PVT. LTD. : RS.92,000/ - . IN OUR CONSIDERED VIEW, THE A.O EXCEPT FOR TAKING COGNIZANCE OF AND THEREIN REFERRING TO THE DISALL OWANCE OF PURCHASES OF RS.5,23 ,050/ - BY THE ASSESSEE IN ITS RETURN OF INCOME FILED IN COMPLIANCE TO NOTIC E UNDER SEC. 148 OF THE ACT, HAD HOWEVER, FAILED TO PLACE ON RECORD ANY MATERIA L WHICH WOULD IRREFUTABLY PROVE TO THE HILT THE FACTUM OF ANY CONCEALMENT OF INCOME BY THE ASSESSEE . IN FACT, ON A PERUSAL OF THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE ACT, WE FIND THAT THE ASSESSEE HAD CATEGORICALLY STATED THAT THE AFORESAID ADDITIONAL INCOME WAS BEING OFFERED IN ORDER TO BUY PEACE O F MIND AND TO AVOID PROTRACTED LITIGATION. ON A PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT S HRI SUNIL PUNDALIK KULKARNI, DIRECTOR OF THE ASSESSEE COMPANY, IN HIS STATEMENT RECORDED ON 21.02.2013, HAD STATED , THAT AS THERE WAS A DISCREPANC Y IN RECORDING THE ENTRIES IN THE ERP SYSTEM BY THE CONCERNED STAFF, THEREFORE, THE TRANSACTION S ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 6 ENTERED INTO WITH THE HAWALA TIN PARTIES WERE BEING ACCEPTED AS NON - GENUINE AND NON - VERIFIABLE TRANSACTIONS. APART FROM THAT, WE FIND THAT SHRI SUNIL PUNDALIK KULKARNI (SUPRA) IN REPLY TO QUESTION NO. 14 OF HIS AFORESAID STATEMENT , HAD STATED , THAT AS PURSUANT TO THE NON - COMPLIANCE OF THE VAT PROVISIONS BY THE AFOREMENTIONED SUPPLIERS THE NECESSARY CONFIRMATIONS OF THE MATERIAL SOLD BY THEM TO THE ASSESSEE COMPANY WERE NOT FORTHCOMING, A ND THUS, COULD NOT BE VERIFIED , THEREFORE, PURCHASES MADE FROM THE ABOVEMENTIONED PARTIES WERE BEING OFFERED FOR DISALLOWANCE. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES HAD BEEN DISALLOWED AND OFFERED FOR TAX, PRIMARILY FOR THE REASON , THAT THE CONCERNED SUPPLIER PARTIES HAVING FAILED TO HAVE COMPLIED WIT H THE VAT PROVISIONS WERE THUS NOT FORTHCOMING WITH THE CONFIRMATIONS OF THEIR TRANSACTIONS WITH THE ASSESSEE, AS A RESULT WHEREOF , THE PURCHASE TRANSACTIONS UNDER CONSIDERATION HAD REMAINED UNVERIFIED. AS SUCH, WE ARE OF A STRONG CONVICTION THAT THE ASSESSEE IN ORDER TO BUY PEACE OF MIND AND TO AVOID LITIGATION HAD IN ALL FAIRNESS OFFERED TO DISALLOW THE AFORESAID PURCHASES. IN THE TOTALITY OF THE FACTS INVOLVED IN THE CASE BEFORE US, WE FIND OURSELVES TO BE IN AGREEMENT WITH THE VIEW TAKEN BY T HE CIT (A) THAT AN INCOME OFFERED AS AN ADDITION/DISALLOWANCE BY AN ASSESSEE , DE HORS ANY MATERIAL PROVING CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ON ITS PART , CANNOT ON SUCH STANDALONE BASIS JUSTIFY LEVY OF PENALTY UNDER SEC. 271(1)(C) OF T HE ACT. AS THE LOWER AUTHORITIES HAD FAILED TO PLAC E ON RECORD ANY MATERIAL WHICH C OULD PROVE TO THE HILT THA T THE ASSESSEE HAD CONCEALED OR FURNISH ED INACCURATE PARTICULARS OF ITS INCOME, WE THUS ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW TAKEN BY THEM THAT A SIMPLICITOR DISALLOWANCE OF RS.5,23,050/ - BY THE ASSESSEE IN RESPECT OF THE IMPUGNED PURCHASES WOULD JUSTIFY IMPOSITION OF PENALTY UNDER SEC. 271(1)(C) OF THE ACT. ON A SIMILAR FOOTING, AS THE A.O HAD MERELY ON THE BASIS OF AN ESTIMATION MADE AN ADDITION OF RS.63,280/ - (20% OF RS. 3,16,400/ - ) OF THE UNPROVED PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM M/S MANAV IMPEX, THE SAME IN OUR ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 7 CONSIDERED VIEW WOULD NOT BE SUFF ICIENT TO JUSTIFY SADDLING THE ASSESSEE WITH PENALTY UNDER SEC. 271(1)(C) OF THE ACT. OUR AFORESAID VIEW TH AT THOUGH THE UNPROVED PURCHASES WOULD JUSTIFY AN ADDITION IN THE HANDS OF THE ASSESSEE, BUT THEN, THE SAME ON SUCH STANDALONE BASIS CANNOT ATTR ACT P ENALTY UNDER SEC.271(1)(C) IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. UPENDRA V. MITHANI (ITA (L) NO. 1860 OF 2009), DATED 05.08.2009 , WH EREIN IT WAS OBSERVED AS UNDER: THE ISSUE INVOLVED IN THE APPEAL REVOLVES AROUND DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT. THE TRIBUNAL HAS CONCURRED WITH THE VIEW TAKEN BY THE COMMISSIONER OF INCOME TAX (A). THE COMMISSIONER OF INCOME TAX (A) HAS RIGHTLY TAKEN A VIEW THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED, I.E. IT IS NOT ACCEPT ED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE. THE VIEW TAKEN BY THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. THE APPEAL IS WITHOUT ANY SUBSTANCE. THE SAME IS DISMISSED IN LIMINE WITH NO ORDE R AS TO COSTS. ALSO, SUPPORT IS DRAWN FROM THE ORDER OF THE HONBLE SUPREME COURT IN CIT - 2 LUCKNOW VS. U.P STATE BRIDGE CORPORATION LTD. (SLP) (CIVIL) (2018) 97 TAXMAN.COM 279 (SC), WHEREIN THE HONBLE APEX COURT WHILE UPHOLDING THE ORDER OF THE HONBLE HIGH COURT OF ALLAHABAD , HAD OBSERVED , THAT WHERE A CLAIM OF EXPENDIT URE IS NEITHER FOUND INACCURATE NOR COULD BE VIEWED AS CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE, THEN , MERELY BECAUSE THE SAID CLAIM WAS NOT ACCEPTED OR ACCEPTABLE TO THE REVENU E, THAT BY ITSELF WOULD NOT ATTRACT PENALTY UNDER SEC. 271(1)(C). NOW, IN THE CASE BEFORE US, AS THE REVENUE HAD FAILED TO DISPROVE TO THE HILT ON THE BASIS OF CLINCHING DOCUMENTARY EVIDENCE THE AUTHENTICITY OF THE CLAIM OF THE ASSESSEE OF HAVING MADE PURC HASES FROM THE AFOREMENTIONED PARTIES, THEREFORE, MERELY ON THE BASIS OF THE UNPROVED CLAIM OF PURCHASES NO PENALTY UNDER SEC. 271(1)(C) COULD HAVE BEEN VALIDLY IMPOSED ON IT . ACCORDINGLY, IN THE BACKDROP OF OUR AFORESAID DELIBERATIONS, WE ARE OF THE CONSI DERED VIEW THAT IN THE TOTALITY OF THE FACTS LEADING TO THE ADDITION/DISALLOWANCE IN THE HANDS OF THE ASSESSEE, NO PENALTY UNDER SEC. 271(1)(C) COULD HAVE VALIDLY BEEN IMPOSED. AS SUCH ITA NO.2769/MUM/2019 A.Y. 2008 - 09 DY.CIT VS. M/S ASHIDA ELECTRONICS PVT. LTD. 8 FINDING NO INFIRMITY I N THE VIEW TAKEN BY THE CIT(A), WE UPHOLD THE VACATING OF THE PENALTY U/S 271(1)(C) OF RS.1,99,294/ - BY HIM . 7. THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 . 10.2020 SD/ - SD/ - RAJESH KUMAR RAVISH SOOD (ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) MUMBAI, DATE: 27 .10.2020 R. KUMAR COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI