ITO WARD 1(4), Thane V. SHRI. GANESH CHANDRAKANT DERE, Thane

ITA 371/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4051 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase; Tax effect; Reassessment proceedings
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 371/MUM/2019(A.Y.2010-11) INCOME TAX OFFICER , WARD 1(4) 6 TH FLOOR, BWING, ROOM NO.11, WAGLE INDUSTRIAL ESTATE, THANE(W) 400 604 ... ... APPELLANT VS. SHRI GANESH CHANDRAKANT DERE, PLOT NO.B-15, PRAGATI CHS, SUN COMPUTER, SAVARKAR NAGAR, THANE (W) 400 606 PAN: AHNPD 0630P ..... RESPONDENT APPELLANT BY : SHRI R. BHOOPATI RESPONDENT BY : NONE DATE OF HEARING : 22/01/2020 DATE OF PRONOUNCEMENT : 20/02/2020 ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE, DATE D 19/11/2018 FOR THE A.Y 2010-11, DELETING PENALTY LEVIED U/S 271(1) (C) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2 ITA NO. 371/MUM/2019(A.Y.2010-11) 2. THE ADDITION WAS MADE BY THE ASSESSING OFFICER I N REASSESSMENT PROCEEDINGS VIDE ORDER DATED 06/02/2015 PASSED UNDE R SECTION 143(3) R.W.S. 147 OF THE ACT BY ESTIMATING GP @ 12.04% ON ALLEGED BOGUS PURCHASES. THE ASSESSING OFFICER VIDE ORDER DATED 21/08/2015 LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE ESTIMATED ADDITION OF ALLEGED BOGUS PURCHASES. SHRI R. BHOOPATHI, APPEARING ON BEHALF OF DEPARTM ENT, VEHEMENTLY DEFENDED THE PENALTY ORDER AND PRAYED FO R REVERSING THE FINDINGS OF THE CIT(A). THE DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT SINCE REOPENING WAS DONE ON THE BASI S OF INFORMATION RECEIVED FROM EXTERNAL INVESTIGATING AG ENCY, THE APPEAL WOULD NOT BE COVERED BY CBDT CIRCULAR DATED 08/082019 ON MONETARY LIMITS FOR FILING APPEALS BY THE DEPART MENT. 3. I HAVE CONSIDERED THE SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESENTATIVE AND HAVE PERUSED TH E ORDERS OF AUTHORITIES BELOW. EVERY ADDITION MADE IN ASSESSME NT PROCEEDINGS DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. IN THE INSTANT CASE PENALTY U/S. 271(1)(C) HAS BEEN LEVIED ON THE DISALLOWANCE OF BOGUS PURCHASES MADE ON ESTIMATION. IT IS A WELL SETTLED LEGAL POSITION TH AT NO PENALTY IS LEVIABLE ON ADDITIONS BASED ON ESTIMATIONS. MERELY FOR THE REASON THAT ADDITION HAS BEEN ACCEPTED BY THE ASSES SEE DOES NOT IPSO-FACTO RESULT IN INITIATION OF PENALTY PROCEEDI NGS. I SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. 3 ITA NO. 371/MUM/2019(A.Y.2010-11) 4. I FURTHER OBSERVE THAT THE QUANTUM OF PENALTY WH ICH IS SUBJECT MATTER OF DISPUTE IS RS. 25,047/- ONLY. TH E TAX EFFECT IN THIS APPEAL BY THE REVENUE IS FAR LESS THAN THE LI MIT PRESCRIBED BY CBDT FOR FILING APPEALS BY THE DEPARTMENT BEFORE TH E TRIBUNAL. IT WOULD BE RELEVANT TO MENTION HERE THAT DEPARTMENT A PPEALS EMANATING FROM PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE ADDITIONS CONSEQUENT TO INFORMATION RECEIVED F ROM EXTERNAL INVESTIGATING AGENCIES ARE NOT COVERED BY EXCEPTION S PROVIDED IN PARA 10 OF THE CBDT CIRCULAR DATED 20.08.2018. 5. THUS, FOR THE REASONS CITED ABOVE, THE APPEAL OF REVENUE IS LIABLE TO BE DISMISSED. I HOLD AND DIRECT ACCORDIN GLY. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 20TH DAY OF FEBRUARY , 2020. SD/- (VIKAS AWASTHY) JUDICIAL MEMBER MUMBAI, DATED 20/02/2020 VM , SR. PS(O/S) 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI