M/s KLIN CONSTRUCTION PVT. LTD., MUMBAI V. ITO, 10(1)(4), MUMBAI

ITA 2857/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2655 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c); 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI SHRI SHAMIM YAHYA ( A M) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 2857 /MUM/ 201 9 (ASSESSMENT YEAR 2011 - 12 ) M/S. KLIN CONSTRUCTION PVT. LTD. PLOT D, SURVEY NO. 8, HISSA 6 GHODBUNDER VILLAGE ROAD BHYANDER ( EAST), THANE MAHARASHTRA - 401 107. PAN : AADCK3528M V S . ITO - 10(1)(4) 25B, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI GURBINDER SINGH DATE OF HEARING 10 . 1 1 . 20 20 DATE OF PRONOUNCEMENT 17 . 1 1 . 20 20 O R D E R PER SHAMIM YAHYA (AM) : - THIS IS AN APPEAL BY THE ASSESSEE THAT THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEARNED CIT(A)] HAS ERRED IN SUSTAINING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS. 28,509/ - BY ORDER DATED 20.7.2016 PERTAINING TO A.Y. 2011 - 12. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN THIS CASE IS ENGAGED IN THE BUSINESS OF SALE OF FURNITURE AND INTERIOR ITEMS. DURING THE COURSE OF ASSESSMENT PROCEE DINGS THE ASSESSING OFFICER MADE DISALLOWANCE OF 25% OF THE PURCHASES FROM BOGUS PURCHASER UPON INFORMATION FROM SALES TAX DEPARTMENT . PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 28,509/ - WAS ALSO LEVIED. 3. UPON ASSESSEES APPEAL LEARNED CIT(A) U PHELD THE PENALTY. 4. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. WE FIND THAT THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAS BEEN DONE ON ESTIMATED BASIS. THE AS SESSEE HAS FURNISHED ALL THE NECESSARY DETAILS. THERE IS NO CASE OF 2 FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. HENCE, LEARNED CIT(A) IS NOT CORRECT IN HOLDING THAT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THIS CASE IS SUSTAINAB LE. WE FURTHER NOTE THAT THE CONDUCT OF THE ASSESSEE IN THIS CASE CANNOT BE CONSIDERED TO BE CONTUMACIOUS WARRANT LEVY OF PENALTY UND ER SECTION 271(1)(C) OF THE ACT. THIS PROPOSITION IS SUPPORTED BY THE DECI SI ON IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA VS. (83 ITR 26) . HENCE, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULES BY PLACING THE RESULT ON NOTIC E BOARD ON 17.11.2020. SD/ - SD/ - (RAMLAL NEGI ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 17 / 1 1 / 20 20 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. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI