Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 0282 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 2 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-08-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
2011-2012
Appeal Filed On
23-05-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 3566 /MUM/20 1 6 (ASSESSMENT YEAR 20 11 - 12 ) M/S. ICON INFOTECH P. LTD. 2 - RABUNISA MANZIL 1 ST FLOOR, OPP. GRANT ROAD RAILWAY STATION (W EST) MUMBAI - 400 007. VS. DCIT 5(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAAC1760K ASSESSEE BY SHRI MAYUR R. MAKADIA DEPARTMENT BY S HRI ARJU GARODIA DATE OF HEARING 9 . 8 . 201 7 DATE OF PRONOUNCEMENT 9 . 8 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.03.2016 PASSED BY LD CIT(A) - 10 IN PARTIALLY CONFIRMING THE ADDITION RELATING TO ALLEGED BOGUS PURCHASES MADE IN AY 2011 - 12. 2. THE ASSES SEE IS ENGAGED IN THE BUSINESS OF TRADING IN COMPUTER HARDWARE, SPARES, AND PERIPHERALS. IT ALSO UNDERTAKES REPAIR SERVICES. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, IT CAME TO THE NOTICE OF THE REVENUE THAT THE ASSESSEE HAS M ADE PURCHASES TO THE TUNE OF RS.16,08,915/ - DURING THE YEAR UNDER CONSIDERATION FROM TWO PARTIES, WHO WERE LISTED OUT BY THE SALES TAX DEPARTMENT AS HAWALA DEALERS, I.E., THEY HAVE PROVIDED ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL. HENCE THE AO ASKED THE ASSESSEE TO PROVE THE PURCHASES. BUT THE ASSESSEE DID NOT FURNISH COPIES OF BILLS AND OTHER DETAILS TO PROVE THE PURCHASES. THE AO ISSUED NOTICES U/S 133(6) OF THE ACT, BUT THEY WERE RETURNED UNSERVED. THE AO ALSO DEPUTED M/S. ICON INFOTECH P. LTD. 2 ITI TO THE ADDRESSES GIVEN, BUT THE SUPPLIERS WERE NOT AVAILABLE IN THOSE ADDRESSES. HENCE THE AO TREATED THE ABOVE SAID AMOUNT OF RS.16,08,915/ - AS BOGUS PURCHASES AND DISALLOWED THE SAME. THE LD CIT(A) SUSTAINED THE ADDITION TO THE EXTENT OF 12.50% OF THE VAL UE OF PURCHASES. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. 3. THE ASSESSING OFFICER ALSO DISALLOWED A SUM OF RS.1,09,049/ - , BEING LATE DELIVERY CHARGES CLAIMED BY THE ASSESSEE. IN THE EARLIER YEAR, THE ASSESSEE HAD MADE IDENTICAL CLAIM AND AGREED FOR DISALLOWANCE OF THE SAME. ACCORDINGLY THE AO DISALLOWED THE CLAIM OF RS.1,09,409/ - REFERRED ABOVE DURING THIS YEAR ALSO. THE LD CIT(A) AGREED THAT THE LATE DELIVERY CHARGES CANNOT BE CONSIDERED AS PENAL IN NATURE. HOWEVER, HE SUSTAINED THE S AME, SINCE THE ASSESSEE HAD AGREED FOR SIMILAR ADDITION IN THE EARLIER YEAR BY FOLLOWING THE PRINCIPLES OF CONSISTENCY. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY LD CIT(A) ON THIS ISSUE. 4. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE AO HAD MADE IDENTICAL ADDITION RELATING TO BOGUS PURCHASES IN AY 20010 - 11. WHEN THE MATTER TRAVELLED TO THE ITAT, THE TRIBUNAL, VIDE ITS ORDER DATED 24.10.2016 PASSED IN ITA NO.6385/MUM/2014, RESTRICTED THE ADDITION TO 8% OF THE ALLEGED BOGUS PURCHASE S. WITH REGARD TO THE ADDITION RELATING TO LATE DELIVERY CHARGES, HE SUBMITTED THAT THE SAME IS LIABLE TO BE DELETED AS IT IS NOT IN THE NATURE OF PENALTY PRESCRIBED UNDER A STATUTE. THE LD A.R DID NOT PRESS THE GROUND NO.3 RELATING TO PEAK INVESTMENT. 5. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE TRIBUNAL, IN THE IMMEDIATELY PRECEDING YEAR, SUSTAINED THE ADDITION TO THE EXTENT OF 8%, SINCE THE AO HAD DISALLOWED THE BOGUS PURCHASES ON THE BASIS OF REPORT RECEIVED FROM SALES TAX DEPARTMENT, I.E., W ITHOUT MAKING ANY INDEPENDENT ENQUIRY. SHE SUBMITTED THAT M/S. ICON INFOTECH P. LTD. 3 THE ASSESSING OFFICER HAS CONDUCTED SUFFICIENT ENQUIRIES DURING THE INSTANT YEAR AND PROVED THAT THE PURCHASES WERE BOGUS. THE LD D.R SUBMITTED THAT THE ASSESSEE DID NOT FURNISH BASIC DETAILS LIKE COPY OF INVOICES, TRANSPORTATION BILLS ETC. THE AO HAS ISSUED NOTICES U/S 133(6) OF THE ACT TO THE PARTIES, BUT THEY WERE RETURNED UNSERVED. THEREAFTER THE AO DEPUTED INSPECTOR OF INCOME TAX AND HE HAS REPORTED THAT THE IMPUGNED PARTIES WERE NOT AVAILAB LE. ACCORDINGLY, THE LD D.R SUBMITTED THAT THE LD CIT(A) SHOULD HAVE SUSTAINED THE ENTIRE AMOUNT OF BOGUS PURCHASES. SHE SUBMITTED THAT THE REVENUE DID NOT CHALLENGE THE ORDER OF LD CIT(A) DUE TO RESTRICTIONS PLACED ON THE BASIS OF MONETARY EFFECT INVOLV ED. ACCORDINGLY SHE SUBMITTED THAT THE ORDER PASSED BY LD CIT(A) SHOULD BE SUSTAINED. 6. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICE THAT THE AO HAS OBSERVED THAT THE ASSESSEE DID NOT FURNISH COPIES OF BILLS AND COPIES OF TRANSPORTATION R ECORDS. IT APPEARS THAT THE ASSESSEE WAS SOLELY RELYING UPON EVIDENCES OF PAYMENTS MADE THROUGH BANKING CHANNELS. THUS WE NOTICE THAT THE ASSESSEE HAS FAILED TO PROVE THE PURCHASES. IN AY 2010 - 11, THE AO HAD MADE THE ADDITION OF BOGUS PURCHASES WITHOUT MAKING INDEPENDENT ENQUIRIES. HOWEVER, IN THE INSTANT YEAR, THE AO HAS MADE SUFFICIENT ENQUIRIES AS NARRATED IN THE PRECEDING PARAGRAPHS. THE FINDINGS GIVEN BY THE AO HAS NOT BEEN PROVED TO BE WRONG. DESPITE THESE DEFECTS, THE LD CIT(A) HAS SUSTAINED TH E ADDITION TO THE EXTENT OF 12.50% OF THE VALUE OF PURCHASES. SINCE THE REVENUE HAS NOT CHALLENGED THE ORDER PASSED BY LD CIT(A), THE RELIEF GRANTED BY LD CIT(A) HAS ATTAINED FINALITY. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT T HE ASSESSEE CANNOT PLACE RELIANCE ON THE DECISION RENDERED BY THE TRIBUNAL IN AY 2010 - 11. FOR THE REASONS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY WE UPHOLD HIS O RDER PASSED ON THIS ISSUE. M/S. ICON INFOTECH P. LTD. 4 7. THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF LATE DELIVERY CHARGES. WE NOTICED THAT THE ADDITION WAS MADE BY THE AO ON THE REASONING THAT THE ASSESSEE HAD AGREED FOR AN IDENTICAL ADDITION IN THE IMMEDIATELY PRECEDING YEAR . THOUGH THE LD CIT(A) AGREES WITH THE CONTENTION OF THE ASSESSEE THAT THE LATE DELIVERY CHARGES CANNOT BE EQUATED WITH THE PENALTY PRESCRIBED UNDER THE STATUTE, YET HE CONFIRMED THE ADDITION UNDER THE PRINCIPLES OF CONSISTENCY. 8. WE HEARD THE PART IES ON THIS ISSUE. IN OUR VIEW, THE PRINCIPLES OF CONSISTENCY CANNOT BE APPLIED TO THE INSTANT ISSUE. THE DOCTRINE THERE IS NO ESTOPPEL AGAINST LAW, IN OUR VIEW, SHALL BE APPLICABLE HERE. IT IS A WELL SETTLED PROPOSITION THAT THE ASSESSING OFFICER IS NOT ENTITLED TO TAX ANY RECEIPT MERELY ON THE BASIS OF CONCESSION GIVEN BY THE ASSESSEE, IF THE SAID RECEIPT IS OTHERWISE NOT TAXABLE UNDER THE ACT. WE NOTICE THAT THE LD CIT(A) HAS AGREED THAT THE LATE DELIVERY CHARGES CANNOT BE CONSIDERED AS PENALTY. I N THAT CASE, THE SAME IS ALLOWABLE AS DEDUCTION AGAINST THE INCOME OF THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE DEDUCTION OF LATE DELIVERY CHARGES. 9. IN THE RESULT, THE APPE AL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 9 . 8 .201 7. SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 9 / 8 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI M/S. ICON INFOTECH P. LTD. 5 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI
