ITO - 29(1)(4), MUMBAI V. SMT HEMA JAYESH PAREKH, MUMBAI

ITA 3095/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6381 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Bogus purchase
• Section: 271(1)(c); 69C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) I.T.A. NO. 3095/MUM/2019 (ASSESSMENT YEAR 2010-11 ) ITO-29(1)(4) ROOM NO. 406 4 TH FLOOR, KAUTILYA BHAVAN, NEAR VIDESH BHAVAN BKC, BANDRA EASTS MUMBAI - 400 051. VS . SMT. HEMA JAYESH PAREKH 1301, SHREE NATH TOWER L.T. EXTENSION ROAD MULUND WEST MUMBAI-400 080. PAN : AQLPP5420E (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI AKHTAR H. ANSARI DATE OF HEARING 15.09 . 20 20 DATE OF PRONOUNCEMENT 16.09.2020 O R D E R THIS IS IN APPEAL BY THE REVENUE IN THE REVENUE IS AGGRIEVED THAT THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE PENA LTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS. 57,145/- BY ORDER DATED 12.12.2019 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IN THI S CASE IS ENGAGED IN BUSINESS OF TRADING IN CHEMICAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 1849 37 @12.5% OF THE PURCHASES OF RS. 14,79,499/- PENALTY UNDER SECTION 271(1)(C) AMOUNTING TO RUPEES 57,145/- WAS ALSO LEVIED. 3. UPON ASSESSEE'S APPEAL LEARNED CIT(APPEALS) DELE TED THE PENALTY BY OBSERVING AS UNDER :- THE AO HAS STATED IN PARA 4 OF THE PENALTY ORDER THAT TH E APPELLANT FAILED TO PROVE THE GENUINENESS OF THE PURCHASES CLAIMED. BUT I ALSO FIND THAT THE AO DID NOT TREAT THE ENTIRE PURCHASES AS BOGUS. HAD THE TRAN SACTIONS BEEN TREATED ENTIRELY AS BOGUS, THE AO WOULD HAVE DISALLOWE D THE ENTIRE PURCHASES. BUT IN THIS CASE, THE AO DISALLOWED ONLY 12.5% OF THE DISALLOWANCES MADE. I ALSO FIND FROM PARA 4 OF THE P ENALTY ORDER THAT THE SMT. HEMA JAYESH PAREKH 2 ADDITION WAS MADE U/S 69C OF THE ACT WHICH DOES NOT AP PEAR TO BE IN CONFORMITY WITH THE FINDING THAT THE PURCHASES WERE BOGUS. FURTHER, I FIND THAT THE QUANTUM ADDITION IS BASED ON ESTIMATE. IN VIEW OF DECISION HELD BY PUNJAB & HARYANA HIGH COURT IN CASE OF HARIGOPAL SIN GH. VS CIT (2002) 258 ITR 85 (P&H) THE PENALTY IMPOSED IS NOT SUSTAINABLE. ACCORDINGLY, I DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY OF RS. 57,14 5/-. 4. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE T HE ITAT. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED. I FIND THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAS BEEN DONE ON ESTIMAT ED BASIS. THE LEARNED CIT(A) IS CORRECT IN HOLDING THAT THE PENALTY UNDER SECTION 271(1)(C) IN THIS CASE IS NOT SUSTAINABLE. I FURTHER NOTE THAT THE CONDUCT OF THE ASSESSEE IN THIS CASE CANNOT BE CONSIDERED BE CONTUMACIOUS TO WARRANT LEV Y OF PENALTY UNDER SECTION 271(1)(C). THIS PROPOSITION IS SUPPORTED BY THE DECISION OF HONOURABLE SUPREME COURT DECISION THE CASE OF HINDUSTAN STEEL LTD. V. STATE OF ORISSA (83 ITR 26). 5. IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED ORDER PRONOUNCED UNDER RULE 34(4) OF ITAT RULES ON 16.9.2020. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 16/09/2020 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 SMT. HEMA JAYESH PAREKH 3