ARMOURY INTERNATIONAL, MUMBAI V. ACIT 21(3), MUMBAI

ITA 3299/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8510 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE
• Assessee Lawyers: LALIT MUNOYAT
• Keywords: Bogus purchase; Revised return
• Section: 148; 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD , JM ITA NO S . 3299, 3300 & 3301 /MUM/ 2017 (ASSESSMENT YEAR: 2009 - 10 , 2010 - 11 & 2011 - 12 ) ARMOURY INTERNATIONAL PEREIRA COMPOUND, SAKI NAKA, ANDHERI EAST, MUMBAI - 400 072 VS. ASST. CIT - 21(3) PRATYAKHAKAR BHAVAN, BANDRA KURLA COMPLED, BANDRA (E), MUMBAI - 400 051 PAN/GIR NO. AAFFA 8697 J ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI LALIT MUNOYAT RESPONDENT BY : SHRI SATISHCHANDRA RAJORE DATE OF HEARING : 24.12.2018 DATE OF PRONOUNCEMENT : 01.01 .201 9 O R D E R PER SHAMIM YAHYA, A. M.: TH E S E ARE APPEAL S BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER S OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 38, MUMBAI (LD.CIT(A) FOR SHORT) DATED 25.01.2017 AND PERTAINS TO THE ASSESSMENT YEAR S (A.Y.) 2009 - 10 TO 2011 - 12, SUSTAINING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT). 2. IN THIS CASE, THE LD. CIT(A) HAS SUSTAINED FOLLOWIN G PENALTY U/S. 271(1)(C) OF THE ACT : A.Y. 2009 - 10 RS.2,97,983/ - A.Y. 2010 - 11 RS.3,55,040/ - A.Y. 2011 - 12 RS.3,82,255/ - 3. IN THIS CASE, THE ASSESSEE WAS OBSERVED TO HAVE MADE BOGUS PURCHASES AS PER INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT. THE ASSESSEE WAS ISSUED NOTICE U/S. 148 ON 11.03.2013 SERVED ON 12.03.2013. THE ASSESSEE FILED REVISED RETURN OF 2 ITA NOS.3299, 3300 & 3301/MUM/2017 INCOME ON 15.03.2013, WHEREIN THE AMOUNT OF BOGUS PURCHASE WAS OFFERED FOR TAXATION. ON THIS AMOUNT, THE PENALTY U/S. 271(1)(C) WAS ALSO LEVIED . 4. UPON THE ASSESSEES APPEAL, THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY. 5. AGAINST THIS LEVY OF PENALTY, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ASSESSMENT IN THIS CASE HAS BEEN COMPLETED ON THE RET URNED INCOME. HENCE, WHE N THE RETURN OF INCOME AND THE ASSESSED INCOME ARE SAME, T HE MACHINERY PROVISION FOR LEVY OF PENALTY U/S. 271(1)(C) FAILS, AS THE PENALTY U/S. 271(1)(C) IS LEVIED WITH REFERENCE TO THE TAX SOUGHT TO BE E VADED, WHICH IS THE DIFFERENCE BETWEEN THE INCOME RETURNED AND THAT ASSESSED BY THE A.O. 7. IN THIS CASE, SINCE THE ASSESSED INCOME AND THE RETURNED INCOME ARE THE SAME, THE MACHINERY PROVISION OF PENALTY U/S. 271(1)(C) FAILS. IN THIS REGARD, WE DRAW SUPP ORT FROM THE OF HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. SAS PHARMACEUTICALS [2011] 335 ITR 259 (DEL). THE HONBLE HIGH COURT HAS EXPOUNDED THAT PENALTY U/S. 271(1)(C) CAN ONLY BE LEVIED IF IN THE COURSE OF PROCEEDINGS, THE A.O. IS SATISFI ED THAT THERE IS AN CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. THE WORDS ' IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT MEAN THE ASSESSMENT PROCEEDINGS ' . HOWEVER, THE QUESTION WHETHER THERE IS CONCEALMENT OR INACCURATE PARTICULARS HAS TO BE DETERMINED WITH REFERENCE TO THE RETURNED INCOME. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE LEVY OF PENALTY. 3 ITA NOS.3299, 3300 & 3301/MUM/2017 8. IN THE RESULT, THESE APPEALS BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 . 0 1 . 2 0 1 9 S D / - S D / - ( RAVISH SOOD ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 0 1 . 0 1 . 2 0 1 9 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI