M/s Yogeshwar Corporation, Gandhinagar V. The Income Tax Officer, GNR Ward -4, Gandhinagar

ITA 2836/AHD/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7792 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-07-2009
• Assessment Year: 1996-1997
• Appeal Filed On: 29-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: S V AGARWAL
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI R.V. EASWAR, VICE PRESIDENT AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 24/07/2009 DRAFTED ON: 24/07/2009 1. ITA NO.2836/AHD/2007 AND 2. ITA NO.2837/AHD/2007 ASSESSMENT YEARS : 1996-97 & 1997-98 RESPECTIVELY YOGESHWAR CORPORATION AT & PO LIMBADIA TA. DEHGAM DIST.GANDHIANGAR VS. THE ITO GNR WARD-4 GANDHINAGAR PAN/GIR NO. : AAAFY 3560 H (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.V. AGARWAL, C.A. RESPONDENT BY: SHRI GOVIND SINGHAL, CIT- DR O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAI NST THE ORDER OF THE LD.CIT(APPEALS)-GANDHINAGAR, DATED 26/03/2007 PASSED FOR ASSESSMENT YEARS 1996-97 & 19 97-98. 2. THE SOLE ISSUE INVOLVED IN THESE APPEALS IS THAT THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE OR DER OF THE ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 2 - ASSESSING OFFICER LEVYING PENALTY OF RS.3,23,040/- IN THE ASSESSMENT YEAR 1996-97 AND RS.1,31,029 IN THE ASSE SSMENT YEAR 1997-98 RESPECTIVELY UNDER SECTION 271(1)(C) O F THE ACT ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INCOME . 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THE ASSE SSMENT YEAR 1996-97 THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT BOGUS PURCHASES OF RS.1,92,500/- MADE FROM M/S J.S. ASSOCIATES AND RS.1,62,090/- MADE FROM M/S. MADHUKA NT ENTERPRISE TOTALLING TO RS.3,54,598/- AND THE PAYME NTS MADE AGAINST BOGUS PURCHASES TO THE PARTIES AMOUNTING TO RS.4,50,000/- . THE SAID ADDITION WAS CONFIRMED IN APPEAL BY THE LD. CIT(APPEALS) IN APPEAL NO. CIT (A)/GNR/79/0 4-05 VIDE ORDER DATED 04/10/2004. THE ASSESSING OFFICER THERE AFTER LEVIED PENALTY UNDER SECTION 271(1)(C) OF RS.3,23,0 40/- ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 3 - 4. SIMILARLY, IN THE ASSESSMENT YEAR 1997-98 THE A SSESSING OFFICER MADE ADDITION OF RS.3,23,574/- ON ACCOUNT OF PAYMENTS MADE FOR BOGUS PURCHASES IN ASSESSMENT YEA R 1995-96 AND ADDITION OF RS.3,54,598/- ON ACCOUNT OF PAYMENTS MADE FOR BOGUS PURCHASES IN ASSESSMENT YEA R 1996-97. IN APPEAL, THE LD. CIT(APPEALS) CONFIRME D THE ADDITION OF RS.3,23,574/- AND DELETED THE ADDITION OF RS.3,54,598/-. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS. 1,31,087/- ON PAYMENTS OF RS.3,23,574/- MADE FOR BOGUS PURCHAS ES MADE IN ASSESSMENT YEAR 1995-96 ON ACCOUNT OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. 5. IN APPEAL THE LEVY OF PENALTY WAS ALSO CONFIRMED BY THE LD. CIT(APPEALS) . 6. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSE E FILED COPY OF THE CONSOLIDATED ORDER OF THE TRIBUNAL DATE D 03 RD ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 4 - APRIL, 2009 PASSED IN QUANTUM APPEAL OF THE ASSESSE E IN THE ASSESSMENT YEARS 1996-97 AND 1997-98 IN ITA NOS. 8 2 & 83/AHD/2005 AND SUBMITTED THAT AT PAGE 11 PARAGRAPH NO. 6.2 OF THE ORDER THE TRIBUNAL HAS CONFIRMED ADDITIO N TO THE EXTENT OF 25% OF THE BOGUS PURCHASES OF RS.3,54,598 /- IN THE ASSESSMENT YEAR 1996-97 AND AT PAGE NO.13 PARAGRAPH NO. 12 OF THE ORDER THE TRIBUNAL HAS DELETED THE ADDITI ONS OF RS.4,50,000/- IN THE ASSESSMENT YEAR 1996-97 AND RS .3,23,574/- IN THE ASSESSMENT YEAR 1997-98 MADE ON ACCOUNT OF PAYMENTS FOR BOGUS PURCHASES MADE IN THE ASSESSMENT YEAR 1995-96. THEREFORE, HE SUBMITTED THAT PENALTY LEVIE D IN ASSESSMENT YEAR 1996-97 WAS TO BE DELETED AS THE TR IBUNAL HAS SUSTAINED PART OF THE ADDITION MADE IN THE ASS ESSMENT YEAR 1996-97 BY ESTIMATING THE BOGUS PURCHASE AT 25 % OF THE BOGUS PURCHASES OF RS.3,54,958/-. AS REGARDS PENAL TY LEVIED IN THE ASSESSMENT YEAR 1997-98 THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT AS TH E AMOUNT OF ADDITION MADE WAS DELETED BY THE TRIBUNAL THEREF ORE THE ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 5 - LEVY OF PENALTY DOES NOT SURVIVE. THE LD. AUTHORISE D REPRESENTATIVE OF THE ASSESSEE RELIED ON THE DECISI ON OF AHMEDABAD SMC BENCH OF THE TRIBUNAL FOR ASSESSMEN T YEAR 1995-96 IN THE CASE OF LALIT THAKKAR(HUF) VS. ITO W ARD 3(4), AHMEDABAD IN ITA NO.608/AHD/2006 DATED 16/05/2006, WHEREIN IT WAS HELD THAT ESTIMATED ADDITION @ 25% OUT OF THE BOGUS PURCHASES DOES NOT AMOUNT TO CONCEALMENT OF A NY INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME BY THE ASSESSEE, SO AS TO MAKE THE ASSESSEE LIABLE TO PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF THE LD. CIT(APPEALS) . 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. WE FIND FROM THE ABOVE UNDISPUTED FACTS TH AT IN THE ASSESSMENT YEAR 1996-97 ADDITION WAS MADE ON ACCOUN T OF ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 6 - BOGUS PURCHASES OF RS.3,54,598/- AND ON SECOND APPE AL TO THE TRIBUNAL ADDITION WAS SUSTAINED AT 25% OF THE B OGUS PURCHASES. THEREFORE THE FACTS OF THE ASSESSEE IN A SSESSMENT YEAR 1996-97 ARE IDENTICAL TO THE FACTS OF OF LA LIT THAKKAR(HUF) (SUPRA) WHEREIN THE TRIBUNAL DELETED T HE PENALTY LEVIED UNDER SECTION 271( 1)(C) OF THE ACT FOR THE REASON THAT PENALTY CANNOT BE LEVIED ON ESTIMATED ADDITION. RES PECTFULLY FOLLOWING THE SAID DECISION, WE DELETE THE PENALTY LEVY OF RS.3,23,040/- IN THE ASSESSMENT YEAR 1996-97. FU RTHER, IN THE ASSESSMENT YEAR 1997-98 THE ADDITION MADE OF RS.6,7 8,172/- FOR PAYMENTS MADE ON ACCOUNT OF BOGUS PURCHASES MA DE OF RS.3,23,574/- IN ASSESSMENT YEAR 1995-96 AND RS. 3,54,598/- IN ASSESSMENT YEAR 1996-97 WAS DELETED BY THE TRIBUNAL IN APPEAL FILED BY THE ASSESSEE. THUS, THE LEVY OF P ENALTY OF RS.1,31,039/- MADE ON THIS ADDITION DOES NOT SURVIV E AS THE VERY BASIS OF PENALTY DOES NOT SURVIVE AFTER DELETI ON OF THE ADDITION BY THE TRIBUNAL. WE, THEREFORE, SET A SIDE THE ORDER OF THE LD. CIT(APPEALS) AND DELETE THE LEVY OF PENA LTY OF ITA NOS.2836 AND 2837/AHD/20 07 YOGESH CORPORATION VS. ITO ASST.YEARS - 1996-97 & 1997-98 - 7 - RS.1,31,039/- MADE IN ASSESSMENT YEAR 1997-98. T HUS, THE GROUND OF APPEAL OF THE ASSESSEE IN BOTH THE YEARS ARE ALLOWED. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 31/07/2009. SD/- SD/- ( R.V. EASWAR ) ( N.S. SAINI ) VICE PRESIDENT ACCO UNTANT MEMBER AHMEDABAD; DATED 31/07/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED. 4. THE LD. CIT(APPEALS)- GANDHINAGAR. 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD