ITO-28(3)(1), Mumbai V. SANJAY KASHIRAM GOYAL , Mumbai

ITA 4790/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0182 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 17-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Section: 271(1)(c); 143(1); 147

Judgement Text

1 ITA NOS.4790 & 4791/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) I.T.A. NO. 4790 /MUM/201 9 - A SSESSMENT Y EAR 2009 - 10 I.T.A. NO.4791/MUM/2019 - A SSESSMENT Y EAR 2010 - 11 INCOME - TAX OFFICER - 28(3)(1), MUMBAI VS SANJAY KASHIRAM GOYAL FLAT - C - 114, CORAL CREST SECTOR 23, NERUL, NAVI MUMBAI - 400 076 PAN : A HFPG9521J APPELLANT RESPONDENT APPELLANT BY SHRI VIJAY KUMAR MENON, DR RESPONDENT BY NONE DATE OF HEARING 18 - 02 - 2021 DATE OF PRONOUNCEMENT 1 1 - 0 3 - 2021 O R D E R PER SAKTIJIT DEY (JM) CAPTIONED APPEALS BY THE REVENUE ARISE OUT OF TWO SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 26, MUMBAI, DELETING THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961, FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. 2. BRIEFLY THE FACTS ARE, THE ASSESSEE , AN INDIVIDUAL, IS A WHOLESALER OF IRON AND STEEL. FOR THE ASSESSMENT YEARS UNDER DISPUTE, ASSESSEE HAD FILED HIS RETURN S OF INCOME IN REGULAR COURSE WHICH WERE PROCESSED U NDER SECTION 143(1) OF THE ACT. 2 ITA NOS.4790 & 4791/MUM/2019 SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE S ALES - TAX DEPARTMENT THROUGH THE INVESTIGATION WING THAT CERTAIN P URCHASES MADE BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEARS ARE NON - GENUINE , AS , CONCERNED SELLING DEALERS HAVE BEEN IDENTIFIED AS HAWALA OPERATORS AND ARE ONLY PROVIDING ACCOMMODATION BILLS.ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER REOPEN ED THE ASSESSMENT S U NDER SECTION 147 OF THE ACT AND ULTIMATELY CONCLUDED THAT PURCHASES IN DISPUTE ARE NON - GENUINE. HOWEVER, ULTIMATELY, HE WORKED OUT ADDITION ON PEAK BASIS AND MADE ADDITION OF RS.4,51,64,931/ - IN ASSESSMENT YEAR 2009 - 10 AND RS.4,99,27,76 0/ - IN ASSESSMENT YEAR 2010 - 11. ON THE BASIS OF SUCH ADDITION S , THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT ALLEGING CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN T HE MEANWHILE, AGAINST THE ASSESSMENT ORDER S PASSED MAKING THE AFORESAID ADDITION S , THE ASSESSEE PREFERRED APPEAL S BEFORE LEARNED COMMISSIONER (APPEALS). WHILE CONSIDERING THE ISSUE ON MERIT S , LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO RS.13,10,195/ - IN A SSESSMENT Y EAR 2009 - 10 AND RS.16,79,600/ - IN A SSESSMENT Y EAR 2010 - 11. ON THE BASIS OF ADDITION S SUSTAINED BY LEARNED COMMISSIONER (APPEALS), THE ASSESSING OFFICER PROCEEDED TO IMPOSE PENALTY U NDER SECTION 271( 1)(C) OF THE ACT AMOUNTING TO RS.4,60,130/ - IN ASSESSMENT YEAR 2009 - 10 AND RS.5,19,000/ - IN A SSESSMENT Y EAR 2010 - 11. AGAINST THE PENALTY ORDERS SO PASSED, ASSESSEE PREFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. 3. IN COURSE OF APPELLATE PROCEEDING S, LEARNED COMMISSIONER (APPEALS) FOUND THAT WHILE THE FIRST APPELLATE AUTHORITY HAS RESTRICTED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE AT 2.66% IN A SSESSMENT Y EAR 2009 - 10 AND 2.44% IN A SSESSMENT Y EAR 20 10 - 11; ON FURTHER 3 ITA NOS.4790 & 4791/MUM/2019 APPEAL, THE TRIBUNAL HAS ENHANCED THE ADDITION TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES IN BOTH THE ASSESSMENT YEARS . HOWEVER, CONSIDERING THE FACT THAT THE ADDITION S ON THE BASIS OF WHICH PENALTY HAS BEEN IMPOSED IS PURELY ON ESTIMA TE BASIS, LEARNED COMMISSIONE R (APPEALS) DELETED THE PENALTY IMPOSED . BEING AGGRIEVED, REVENUE IS BEFORE US. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. THOUGH , THE ASSESSING OFFICER, ON THE BASIS OF INFORMATION RECEIVED FROM OUTSIDE SOURCE HAS TREATED CERTAIN PURCHASES MADE BY THE ASSESSEE AS NON - GENUINE AND HAS MADE ADDITION S ON PEAK BASIS, HOWEVER, THE ADDITION SSO MADE HAVE BEEN SUBSTANTIALLY SCALED DOWN BY THE APPELLATE AUTHORITIES.UNDISPUTEDLY,WHILE DECIDING THE ISSUE IN QUANTUM PROCEEDINGS, LEARNED COMMISSIONER (APPEALS) HAS SUSTAINED ADDITION TO THE EXTENT OF 2.66% FOR A SSESSMENT Y EAR 2009 - 10 AND AT 2.44% IN A SSESSMENT Y EAR 2010 - 11 . W HEREAS , ON FURTHER APPEAL, THE TRIBUNAL HAS ENHANCED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. THUS, ULTIMATELY, THE ADDITIONS ON THE BASIS OF WHICH PENALTY WERE IMPOSED, HAVE BEEN MADE PURELY ON ESTIMATE BASIS. THE DECISION OF THE APPELLATE AUTHORITIES IN ESTIMATING THE ADDITION PRE - SUPPOSES THAT THERE IS NO DOUBT WITH REGARD TO THE FACT THAT THE ASSESSEE HAD PURCHASED THE DISPUTED GOODS. THE DOUBT, IF ANY, IS ONLY WITH REGARD TO THE SOURCE OF SUCH PURCHASES. THEREFORE, ANY ADDITION WHICH HA S BEEN MADE ON CERTAIN AMOUNT OF GUESS WORK AND ESTIMATION BY ENTERTAINING SOME AMOUNT OF DOUBT REGARDING ASSESSEES CLAIM, CANNOT LEAD TO THE CONCLUSION THAT ASSESSEE HAS EITHER CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THAT BEIN G THE CASE, THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WOULD NOT GET ATTRACTED. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF 4 ITA NOS.4790 & 4791/MUM/2019 LEARNED COMMISSIONER (APPEALS) IN DELETING THE PENALTY IMPOSED. GROUNDS ARE DISMISSED. 5. IN THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCED ON 1 1 / 0 3 /2021. S D / - S D / - ( S. R IFAUR RAHMAN ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 1 /0 3 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI