ITO WARD 3(3), KALYAN V. MAJUM ENTERPRISES, KALYAN

ITA 4532/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9344 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Reason to believe
• Section: 271(1)(c); 142(1); 250; 143(2); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 4532/MUM/2019 ( ASSESSMENT YEARS: 2011-12 ) ITO, WARD 3(3) 2 ND FLOOR, RANI MANSION MURBAD ROAD, KALYAN 421301. / VS. MAJUM ENTERPRISES 5-A, LAXMI NIWAS, OPP PANDURANG VIDYALAYA MANPADA ROAD, DOMBIVALI (E) - 421201 ./ ./ PAN/GIR NO. : AANFM6957F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BHARAT ANDHLE, DR / RESPONDENT BY : NONE / DATE OF HEARING 28/01/2021 !'# / DATE OF PRONOUNCEMENT 29/01/2021 / O R D E R PER PAVAN KUMAR GADALE - JM: THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A)-1, THANE PASSED U/S 271(1)(C) A ND 250 OF THE ACT. THE REVENUE HAS RAISED THE FOLLOWIN G THE GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, T HE LD. ITA NO . 4532/MUM/2019 MANJUM ENTERPRISES, MUMBAI - 2 - CTT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE AO. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THAT THE CIT(A) FAILED TO APPRECIAT E THE FACT THAT THE ASSESSCE DURING THE ASSESSMENT PROCEE DINGS AS VELL AS DURING APPELLATE PROCEEDINGS COULD NOT P RODUCE ANY RELEVANT DOCUMENTARY EVIDENCES TO SUHSTAIUIATC PURCHASES MADE FROM M/S RERNA TRADING CO. I.E. THE BOGUS ENTRY PROVIDER. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THAT THE CIT(A) FAILED TO APPRECIAT E THE FACT THAT DURING THE ASSESSMENT PROCEEDINGS THE ASS ESSEE ACCEPTED THAT THE PARTIES WERE NOT GENUINE AND DID NOT PREFER FOR APPEAL FOR QUANTUM OF ADDITION. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THAT THE CIT(A) FAILED TO APPRECIAT E THE FACT THAT THE GROUNDS OF APPEAL ITSELF CLEARLY MENT IONED THAT THE DISALLOWANCES / ADDITIONS MADE BY THE A.O. WERE ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT OF THE GOVT OF MAHARASHTRA IN THIS CASE AND FAILED TO APPRECIATE THE DECISION OF HON'BLE GUJARA T HIGH COURT AND APPROVED BY HON'BLE SUPREME COURT IN THE CASE OF N. K. PROTEINS LTD VS DCIT, IN SPECIAL LEAVE APP EAL (CC NO. 769 OF 2017) WHEREIN IT WAS HELD THAT WHEN THE ENTIRE PURCHASES HAVE BEEN FOUND TO BE BOGUS THEN CONFIRMI NG DISALLOWANCE ON PERCENTAGE BASIS GOES AGAINST THE PRINCIPLE OF SECTION 68 & 69C. 5. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE AO MAY BE RESTORED. ITA NO . 4532/MUM/2019 MANJUM ENTERPRISES, MUMBAI - 3 - 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE NOR ANY ADJOURNMENT PETITION WAS FILED . WE HEARD THE LD. DR AND PERUSED THE MATERIAL ON RECORD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN THE BUSINESS OF STOCKI EST AND RESELLER OF ELECTRICAL GOODS. THE ASSESSEE FIRM HAS FILED THE RETURN OF INCOME ON 30.09.2011 FOR THE A. Y 2011-12 WITH A TOTAL INCOME OF RS.4,60,000/-. SUBSEQUENTLY,THE A.O RECEIVED INFORMATION FROM SALE S TAX DEPARTMENT OF MAHARASHTRA THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS FROM M/S REMA TRADING CO. OF RS. 19,919/-. THEREFORE, THE A.O. HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND ISSUED NOTICE U/S 148 OF THE ACT. SUBSEQUENTLY, TH E A.O ISSUED NOTICE U/S 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE. IN COMPLIANCE, THE LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED THE TAX AUDIT REPORT AND FINANCIAL STATEMENTS AND A LSO FILED A LETTER TO TREAT THE RETURN FILED ON 30.09.2 011 AS COMPLIANCE OF NOTICE U/S 148 OF THE ACT. THE ASSESS EE WAS ASKED TO SUBMIT THE EVIDENCE IN RESPECT OF GENUINENESS OF THE PURCHASES AND THE EXPLANATIONS O F ITA NO . 4532/MUM/2019 MANJUM ENTERPRISES, MUMBAI - 4 - THE ASSESSEE ARE NOT SATISFACTORY. THEREFORE, THE A .O MADE ADDITION OF BOGUS PURCHASES AND ASSESSED THE TOTAL INCOME OF RS. 4,79,920/- AND PASSED THE ORDER U/SEC143 R.W.S.147 OF THE ACT DATED 12-12-2014. SUBSEQUENTLY, THE A.O INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED MINIMUM PENALTY OF RS. 6,155/- AND PASSED THE ORDER U/S 271(1)(C) O F THE ACT DATED 20.07.2015. 3. AGGRIEVED BY THE PENALTY ORDER THE ASSESSEE HAS FILED AN APPEAL WITH THE LD.CIT(A). THE LD.CIT(A) CONSIDERED THE GROUNDS OF APPEAL AND FINDINGS OF T HE A.O AND HAS OBSERVED AT PAGE 3 PARA 5 TO 8 OF THE ORDER AND ALLOWED THE ASSESSEES APPEAL. AGGRIEVED BY THE ORDER, THE REVENUE HAS FILED AN APPEAL WITH THE TRIBUNAL. 4.AT THE TIME OF HEARING, THE LD. DR SUBMITTED THAT THE CIT(A) HAS PASSED AN EX-PARTE ORDER WITHOUT CONSIDERING THE FACTS THAT THE GENUINENESS OF THE BOGUS PURCHASES WERE NOT PROVED IN THE ASSESSMENT PROCEEDINGS AND SUPPORTED THE ORDERS OF THE A.O. 5. WE HEARD THE LD. DR AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED ISSUE WITH RESPECT TO DELETION OF PENALTY LEVIED U/S 271(1)(C) OF ITA NO . 4532/MUM/2019 MANJUM ENTERPRISES, MUMBAI - 5 - THE ACT BY THE CIT(A). WE FIND THAT THE CIT(A) REL IED ON THE JUDICIAL DECISIONS AND GRANTED THE RELIEF. T HE LD. DR COULD NOT CONTROVERT THE FINDINGS OF THE CIT (A) WITH COGENT EVIDENCES OR ANY INFORMATION AND SUPPORTED THE PENALTY ORDER. WE FIND THE LD. CIT( A) RELIED ON THE HONBLE SUPREME COURT DECISIONS AND HAS PASSED A REASONABLE ORDER .ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD.CIT( A) AND UPHELD THE SAME AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2021 SD/- SD/- (RAJESH KUMAR) (PAVA N KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 29 /01/2021 KRK, PS ITA NO . 4532/MUM/2019 MANJUM ENTERPRISES, MUMBAI - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. ,-. //'( , '(# , & / DR, ITAT, MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER, , / //TRUE COPY// 1. / ( ASST. REGISTRAR) !' #, / ITAT, MUMBAI