MAHARASHTRA STEEL TRADERS (INDIA), MUMBAI V. CIT(A) 32, MUMBAI

ITA 2790/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7862 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 02-02-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 11-05-2015
• Court: TRIBUNAL
• Department Lawyers: ANJU GARODIA
• Keywords: Bogus purchase; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO.2790/M/2015 (ASSESSMENT YEAR: 2003 - 2004 ) MAHARASHTRA STEEL TRADERS (INDIA), 4, PADMAKUNJ CORNER OF S.V. ROAD, PODDAR, SANTACRUZ (W), MUMBAI 400 054. / VS. INCOME TAX OFFICER - 17(2)(1), MUMBAI. ./ PAN : AAGFM0953L ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. ANJU GARODIA, DR / DATE OF HEARING : 11 .03.2017 / DATE OF PRONOUNCEMENT : 31 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 11.5.2015 IS AGAINST THE ORDER OF THE CIT (A) - 32, MUMBAI DATED 4.3.2015 FOR THE ASSESSMENT YEAR 2003 - 2004. 2. IN THIS APPEAL, ASSESSEE RAISED THREE GROUNDS AND THEY REVOLVE AROUND THE ISSUE RELATING TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 1,65,624/ - . 3. BEFORE US NONE APPEARED TO REPRESENT THE CASE OF THE ASSESSEE DESPITE THE INTIMATION. ORDER SHEET SUGGESTS THAT THE ACKNOWLEDGEMENT OF THE LD COUNSEL FOR THE ASSESSEE REGARDING THE POSTING O F THE CASE TODAY. LD DR FOR THE REVENUE BROUGHT OUR ATTENTION TO THE FACTS OF THE CASE AND MENTIONED THAT THIS IS A CASE OF BOGUS PURCHASES INVOLVING ACCOMMODATION ENTRIES / BOGUS BILLS. AO MADE ADDITION OF RS. 18.40 LAKHS IE 100% OF THE SUSPECTED BOGUS PURCHASES. ON APPEAL, CIT (A) RESTRICTED THE ADDITION TO RS. 5,52,080/ - BEING 30% OF THE ABOVE. THE PRESENT PENALTY PROCEEDINGS OF RS. 1,65,624/ - RELATES TO THE SAID ADDITION OF RS. 5,52,080/ - . 2 4. AFTER HEARING THE LD DR FOR THE REVE NUE, WE FIND, THIS IS THE CASE OF ADDITION ON ACCOUNT OF BOGUS BILLS . W HAT IS FINALLY CONFIRMED BY THE CIT (A) IS BASED ON THE ESTIMATION @ 30% OF THE SAID ADDITION OF RS. 18.4 LAKHS IE RS. 5,52,080/ - . AS SUCH, WE DID NOT FIND THE BASIS FOR SUCH AD - HOC PERCENTAGE . FURTHER, IT IS A SETTLED LEGAL POSITION THAT THE PENALTY ARE NOT SUSTAINABLE IF THE ADDITION IS BASED ON ESTIMATIONS. THEREFORE, WE ARE OF THE OPINION, THE PENALTY LEVIED BY THE AO, SUSTAINED BY THE CIT (A) IS NOT LEGALLY VALID. ACCORDINGLY, THE ORDER OF THE AO A ND THE CIT (A) ARE REQUIRED TO BE REVERSED. ACCORDINGLY WE ORDER. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON 31 ST MARCH, 201 7 . SD/ - SD/ - (SANDE EP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31.03 .201 7 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI