ITO, W-1(5), THANE V. HEMANT MANOHAR TAKLE, THANE

ITA 358/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8137 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Assessee Lawyers: HEMANT TAKLE
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO. 356, 357 & 358/MUM/2019 ( ASSESSMENT YEARS: 2009-10, 2010-11 & 2011-12) I.T.O. WARD 1(5), ROOM NO. 14, 6 TH FLOOR, B-WING, WAGLE INDUSTRIAL ESTATE, THANE WEST-400604. VS. SHRI HEMANT MANOHAR TAKLE, ADVANCE COAT, 475 PARWATI NIWAS, TAKLE COMPOUND, GOKHALE ROAD, THANE (WEST)-400602. PAN/GIR NO. AAPPT 4812 Q (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI AKHTAR H ANSARI (DR) ASSESSEE BY SHRI HEMANT TAKLE (AR) DATE OF HEARING 22/01/2020 DATE OF PRONOUNCEMENT 23/01/2020 / O R D E R PER: R.C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE SEPARATE ORDERS OF THE LD. CIT(A)-01, THANE DATED 26/11/2018 FOR THE A.Y. 2009- 10, 2010-11 & 2011-12 RESPECTIVELY IN THE MATTER OF DELETION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT , THE ACT). 2. ALL THESE APPEALS HAVE COMMON ISSUE, THEREFORE, ALL THE CLUBBED AND HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, A COMMON ORDER IS BEING PASSED. 3. COMMON GRIEVANCE OF THE REVENUE RELATE TO LD. CI T(A)S ACTION FOR DELETING THE PENALTY IMPOSED WITH RESPECT TO DISALL OWANCE MADE ON ITA NO. 356 TO 358/MUM/2019 ITO VS SHRI HEMANT MANOHAR TAKLE 2 ACCOUNT OF BOGUS PURCHASES. IN THE A.Y. 2009-10, TH E A.O. HAS LEVIED PENALTY OF RS. 30,810/-, IN THE A.Y. 2010-11 THE A. O. HAS LEVIED PENALTY OF RS. 88,520/- AND IN THE A.Y. 2011-12, THE A.O. LEVI ED PENALTY OF RS. 45,450/-. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS DELETE D THE PENALTY AFTER OBSERVING AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, FINDINGS OF THE AO, SUBMISSION OF THE AR OF THE APPELLANT AND MATER IAL PLACED ON RECORD. IN THE APPEAL ORDER OF THE QUANTUM APPEA L, THE THEN CIT(A) HAD RESTRICTED THE ADDITION TO THE EXTENT OF 25% OF BOGUS PURCHASES. HENCE THE ADDITION TO INCOME HAS B EEN SUSTAINED ON ESTIMATION BASIS. 6. THE SUPREME COURT HAS RECENTLY REITERATED THE L AW IN CASE OF DILIP N. SHROFF V. JT. CIT [2007] 291 ITR 519 BY HOLDING IN PARA 62 THAT FINDING IN ASSESSMENT PROCEEDINGS CANNOT AU TOMATICALLY ADOPTED IN PENALTY PROCEEDINGS AND THE AUTHORITIES HAVE TO CONSIDER THE MATTER AFRESH FROM DIFFERENT ANGLE. MO REOVER, IN THE CASE OF AJAY LOKNATH LOHIA, ORDER DATED 5.10.2018, MUMBAI ITAT HAS ADDRESSED THAT WHEN AO HAD ESTIMATED COST GP ON ALLEGED PURCHASES, SUCH DISALLOWANCE DOES NOT TANTAMOUNT TO WILLFUL FURNISHING OF INACCURATE PARTICULARS OF INCOME WITH IN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. T HIS WAS ALSO ECHOED IN THE CASE OF ETCO PROFILES PVT. LTD. VS. A CIT, BY MUMBAI ITAT. 7. IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 322 ITR 158 (SC) IT WAS HELD AS UNDER WE DO NOT AGREE; AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WH ICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COU LD BE VIEWED ITA NO. 356 TO 358/MUM/2019 ITO VS SHRI HEMANT MANOHAR TAKLE 3 AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, W HICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVEN UE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENAL TY UNDER SECTION 271(1)(C). IF WE ACCEPT THE CONTENTION OF T HE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE I S NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON, THE A SSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT I S CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE'. 8. THE LEVY OF PENALTY IS MERELY ON DISALLOWANCE O F PURCHASES AND NOT FINDING OF CONCEALMENT OF ANY PARTICULAR OR MALA-FI DE INTENTION TO REDUCE TAXABLE INCOME. ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PURCHASES AS BOGUS AUTOMATICALLY CANNOT JUSTIFY THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE PENALTY OF R S. 32,490/-, IMPOSED U/S 271(1)(C) OF THE I.T. ACT, BY THE AO, IS HEREBY DELETED AND THE GROUNDS OF APPEAL, RAISED AS ABOVE, ARE ALLOWED. 5. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), THE R EVENUE IS IN FURTHER APPEAL BEFORE THE ITAT. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE PENALTY HAS BEEN LEVIED BY DISALLOWING THE ASSESSEES CLAIM OF PURCH ASES. THE LD. CIT(A) HAS DELETED THE PENALTY BY OBSERVING THAT MERELY DI SALLOWANCE OF PURCHASES WITHOUT FINDING OUT ANY CONCEALMENT OF AN Y PARTICULAR OR MALAFIDE INTENTION TO REDUCE TAXABLE INCOME WILL NO T ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. AFTER APPLYING THE VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF DILIP N SHROFF VS JT.CIT (SUPRA) AND CI T VS RELIANCE PETRO ITA NO. 356 TO 358/MUM/2019 ITO VS SHRI HEMANT MANOHAR TAKLE 4 PRODUCTS (P) LTD. (SUPRA), HE HAS DELETED THE PENAL TY. NOTHING WAS PLACED ON RECORD TO CONTROVERT THE FINDINGS SO RECORDED BY THE LD. CIT(A) IN PARA 5 TO 8 OF HIS APPELLATE ORDER. ACCORDINGLY, I DO NO T FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A). 7. SINCE THE FACTS AND CIRCUMSTANCES IN THE APPEALS FOR THE A.Y. 2010- 11 AND 2011-12 ARE PARI MATERIA TO THE A.Y. 2009-10 AS DISCUSSED ABOVE, THEREFORE, FOLLOWING THE REASONING GIVEN IN THE A.Y . 2009-10, I ALSO DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD . CIT(A). 8. IN THE RESULT, ALL THESE THREE APPEALS OF THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 23/01/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//