ITO WD 20(2)(2), MUMBAI V. MANMEET KAUR CHUGH, MUMBAI

ITA 487/MUM/2009

• Counselvise Citation: 48719914 RSA 2009
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 22-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RK GUPTA
• Assessee Lawyers: RITIKA GARG
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH(A .M ) ITA NO.487/MUM/2009 (ASSESSMENT YEAR:2001-02) INCOME TAX OFFICER, 20(2)(2), ROOM NO.610, 6 TH FLOOR, PIRAMAL CHAMBER, PAREL, MUMBAI-400012. SMT.MANMEET KAUR CHUGH, URVASHI MANOR, 1 ST FLOOR, MAKWANA ROAD, MAROL NAKA, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI-400059 PAN: AIUPK3042J APPELLANT V/S RESPONDENT DATE OF HEARING : 11.8.2011 DATE OF PRONOUNCEMENT : 24.8.2011 APPELLANT BY : SHRI R.K.GUPTA RESPONDENT BY : MS.RITIKA GARG O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 4.11.2008 PASSED BY THE LEA RNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL DERIVES INCOME FROM MANUFACTURING AND SALE OF SYNTHETICS FABRICS (SUITING). THE ORIGINAL ASSESSM ENT WAS COMPLETED ON 12.5.2003 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(THE ACT) DETERMINING THE TOTAL INCOME AT ITA NO.487/MUM/2009 (ASSESSMENT YEAR:2001-02) 2 RS.2,45,230/- AS AGAINST THE RETURNED INCOME OF RS.2,36,450/-. THEREAFTER, THE COMMISSIONER OF INCO ME TAX VIDE ORDER PASSED UNDER SECTION 263, DATED 18.8.20 04 SET ASIDE THE ASSESSMENT. PURSUANT TO THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, THE AO COMPLETED THE ASSESSMENT AT AN INCOME OF RS.24,39,850/- INCLUDIN G THE DISALLOWANCE OF BROKERAGE PAYMENT OF RS.1,46,353/- , LOW WITHDRAWALS OF RS.1,23,000/- AND BOGUS PURCHASES OF RS.18,53,325/- VIDE ORDER DATED 30.12.2005 PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE ACT. 3. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X(A) WHILE CONFIRMING THE DISALLOWANCE OF BROKERAGE PAYM ENT OF RS.1,46,353/-, REDUCED THE ADDITION OF LOW WITHDRAW ALS TO RS.45,000/- BY ESTIMATING THE HOUSEHOLD EXPENSES A T THE RATE OF RS.17,000/- PER MONTH AND ALSO REDUCED THE ADDITION OF BOGUS PURCHASES TO RS.8,30,840/- AND ACCORDINGLY PARTLY ALLOWED THE APPEAL. ON FURTHER APPEAL BEFORE THE T RIBUNAL, THE TRIBUNAL VIDE CONSOLIDATED ORDER IN SMT.MANMEET KAUR CHUGH V/S ITO AND SMT.MANJEET KAUR CHUGH V/S ITO I N ITA NOS.1488 AND 1489/M/2007 (AY-2001-02) DATED 22.12.2 008 HAS DELETED THE DISALLOWANCE OF BROKERAGE, LOW WITH DRAWALS AND BOGUS PURCHASE IN TOTO. 4. IN THE MEANWHILE, SINCE THE AO IN THE ASSESSME NT ORDER HAS INITIATED PROCEEDINGS UNDER SECTION 271( 1)(C), ITA NO.487/MUM/2009 (ASSESSMENT YEAR:2001-02) 3 ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY PENALTY UNDER SECTION 271(1)(C) SHOULD NOT BE IMPOSED. IN RESPONSE, THE ASSESSEE VIDE LETTER DATED 22.1.2007 SUBMITTED THAT ON THE ABOVE ADDITION/DISALLOWANCE PENALTY IS NOT LEVI ABLE AND REQUESTED TO DROP THE SAME. HOWEVER, THE AO WAS OF THE VIEW THAT SINCE THE ADDITION IN RESPECT OF BROKERA GE, LOW WITHDRAWALS AND BOGUS PURCHASES HAS BEEN SUSTAINED IN THE FIRST APPEAL, THE ASSESSEE IS LIABLE TO PENALTY AND ACCORDINGLY, HE IMPOSED MINIMUM PENALTY OF RS.4,32 ,210/- VIDE ORDER DATED 20.2.2007 PASSED UNDER SECTION 271 (1)( C) OF THE ACT. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (A) WHILE CONFIRMING THE PENALTY ON THE SUSTENANCE OF DISALLOWANCE OF BROKERAGE, DELETED THE PENALTY ON T HE ADDITION OF HOUSEHOLD EXPENSES AND BOGUS PURCHASES AND ACCORDINGLY PARTLY ALLOWED THE APPEAL. ON FURTHER A PPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL AGAINST THE SUSTEN ANCE OF PENALTY ON THE ADDITION OF DISALLOWANCE OF BROKERAG E, THE TRIBUNAL VIDE CONSOLIDATED ORDER IN SMT. MANJEET K AUR CHUGH V/S ITO AND SMT. MANMEET KAUR CHUGH V/S ITO IN ITA NOS.420 AND 421/MUM/2009 FOR ASSESSMENT YEAR 20 01- 02 ORDER DATED 29.7.2010 HAS DELETED THE PENALTY S USTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (A). ITA NO.487/MUM/2009 (ASSESSMENT YEAR:2001-02) 4 6. SINCE THE LEARNED COMMISSIONER OF INCOME TAX (A) DELETED THE PENALTY ON THE ADDITION MADE ON ACCOUN T OF HOUSE HOLD EXPENSES AND BOGUS PURCHASES, THE REVEN UE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUND S OF APPEAL THE DELETION OF PENALTY IMPOSED BY THE AO. 7. AT THE TIME OF HEARING, BOTH THE PARTIES HAVE AG REED THAT THE TRIBUNAL IN THE QUANTUM APPEAL VIDE ORDER DATED 22.12.2008 (SUPRA) HAS DELETED AND ADDITION/DISALLO WANCE MADE BY THE AO AND SUSTAINED BY THE LEARNED COMMIS SIONER OF INCOME TAX(A), THEREFORE, THE PENALTY IS NOT LE VIABLE. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO PLACED ON RECORD THE COPIES OF THE RELEVANT ORDERS OF THE TRIBUNAL. IT WAS THEREFORE SUBMITTED THAT THE ISSUE MAY BE DECIDED ACCORDINGLY. 8. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECO RD, WE FIND THAT THERE IS NO DISPUTE THAT IN THE QUANTUM APPEA L, THE TRIBUNAL HAS DELETED THE DISALLOWANCE/ADDITION MADE BY THE AO. IN OTHER WORDS THE APPEAL HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. VIRTUALLY, THE BASIS FOR IMPOSITION A ND LEVY OF PENALTY UNDER SECTION 271(1) (C ) IS NOT AVAILABLE . WHEN SUCH IS THE POSITION, THE IMPOSITION OF PENALTY IS NOT IN ACCORDANCE WITH LAW. ACCORDINGLY, WE ARE INCLINED T O UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A) IN ITA NO.487/MUM/2009 (ASSESSMENT YEAR:2001-02) 5 DELETING THE PENALTY IMPOSED BY THE AO. THE GROUND S TAKEN BY THE REVENUE ARE THEREFORE REJECTED. 9. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH AUGU ST,2011. SD SD (RAJENDRA SINGH) (D.K.AG ARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 24TH AUGUST, 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI