ITO - 27(1)(1), MUMBAI V. ANAM M. PARGI HUF, MUMBAI

ITA 4962/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8195 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Bogus purchase
• Section: 271(1)(c); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 4962/MUM/2018 : A.Y : 2009 - 10 ITO, WARD 27(1)(1), MUMBAI. (APPELLANT) VS. SHRI ANAM M. PARGI (HUF) 3 - 608, PUNIT JYOT, BEHIND VASANT PRABHAT BLDG., V.N. PURAV MARG, CHEMBUR, MUMBAI 400 071. PAN : AAAHT8606F (RESPONDENT) APPELLANT BY : SHRI MICHAEL JERALD RESPONDENT BY : NONE DATE OF HEARING : 05/02/2020 DATE OF PRONOUNCEMENT : 13 /0 7 /2020 O R D E R PER SHAMIM YAHYA , ACCOUNTANT MEMBER T HIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 24.05.2018 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10 WHEREIN HE HAS DELETED THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AMOUNTING TO RS. 89,112/ - . 2. B RIEF FACTS OF THE CASE LEADING TO THE LEVY OF PENALTY ARE THAT ASSESSEE IS A HUF ENGAGED IN THE BUSINESS OF RESELLER OF TIMBER, PLYWOOD, LAMINATES. I N THE COURSE OF SCRUTINY ASSESSMENT , ASSESSING OFFICER WAS OF THE OPINION ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT ASSESSEE HAS 2 ITA NO. 4962/MUM/2018 SHRI ANAM M. PARGI (HUF) MADE BOGUS PURCHASES FROM 3 PARTIES , WHICH WERE AMOUNTING TO RS. 6,05,057 / - . A SSESSEE EXPLAINED TH AT ALL THE NECESSARY PARTICULARS AND DETAILS WERE AVAILABLE AND ASSESSEE WAS ONLY NOT IN A POSITION TO PRODUCE THESE PARTIES. HOWEVER , ASSESSING OFFICER WAS NOT SATISFIED. H E PROCEEDED TO MAKE HUNDRED PERCENT ADDITION ON ACCOUNT OF BOGUS PURCHASE. THE R EASON OF THE ASSESSING OFFICER WAS THAT NOTICES TO SUPPLIERS HAVE RETURNED UNSERVED. PENALTY WAS ALSO INITIATED ON THIS ADDITION. IN PENALTY ORDER , THE ASSESSING OFFICER ACCEPTED THAT THERE WAS NO DEFICIENCY IN THE DOCUMENTS , HENCE HE OPINED THAT ASSESSEE MIGHT HAVE MADE PURCHASES FROM THE OPEN MARKET. THE ASSESSING OFFICER LEVIED THE PENALTY BY REFERRING TO DECISION OF ITAT AHMEDABAD IN THE CASE OF VIJAY P ROTE INS LTD. 3. THE LEARNED CIT(A) DELETED THE PE NALTY ON THE ERRONEOUS ASSUMPTION THAT ADDITION HA S BEEN MADE ON ESTIMATED BASIS. 4. AGAINST THIS ORDER , R EVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE . NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 5. UPON CAREFUL CONSIDERATION , WE FIN D THAT ADDITION IN THIS CASE FOR BOGUS PURCHASE HAS BEEN SOLELY DONE ON THE GROUND THAT SUPPLIERS COULD NOT BE PRODUCE D BEFORE THE ASSESSING OFFICER . NO DEFICIENCY IN THE DOCUMENTS SUBMITTED IN THIS REGARD HAS BEEN POINTED OUT. WHILE LEVYING THE PENALTY , T HE ASSESSING OFFICER HAS ACCEPTED THAT ASSESSEE MIGHT HAVE MADE THE PURCHASES FROM GREY MARKET. IN OUR CONSIDERED OPINION , ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THERE IS NO CASE MADE OUT AGAINST THE ASSESSEE FOR CONCEALMENT OR FURNISHING OF INACCURA TE PARTICULARS, WHICH ARE SINE QUA NON FOR PENALTY UNDER 3 ITA NO. 4962/MUM/2018 SHRI ANAM M. PARGI (HUF) S ECTION 271(1)(C) OF THE ACT . THE NON - PRODUCTION OF THE SUPPLIERS CANNOT BE REASON TO LEVY PENALTY. THE CONDU CT OF THE ASSESSEE IS BONA FIDE . AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS STATE OF ORISSA, 83 ITR 26 (SC) THAT THE AUTHORITY MAY NOT LEVY PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. HENCE , IN THE FACTS AND CIRCUMSTANCE OF THE CASE , IN OUR CONSIDERED OPINION , THERE IS NO JUSTIFI CATION OF LE V Y ING PENALTY UNDER S ECTION 271(1)(C) OF THE ACT UPON THE ASSESSEE . H ENCE , WE CONFIRM THE DELETION OF THE SAME . 6. BEFORE PARTING, WE NOTE THAT THIS APPEAL WAS HEARD ON 06.02.2020. THE PRONOUNCEMENT IS DELAYED DUE TO LOCKDOWN IN VIEW OF COVID - 19 PANDEMIC. THE PRONOUNCEMENT IS AS PER RULE 34(5) OF APPELLATE TRIBUNAL RULES AND HON'BLE BOMBAY HIGH COURT DECISION VIDE ORDER DATED 15.04.2020 EXTENDING THE TIME BOUND PERIODS SPECIFIED BY HON'BLE HIGH COURT BY REMOVING THE PERIOD UNDER LOCKDOWN. TH IS ASPECT IS ALSO DEALT WITH IN DETAIL IN ITAT MUMBAI ORDER IN CASE OF DCIT VS JSW STEEL VIDE ORDER DATED 15.05.2020. 7. I N THE RESULT , THIS APPEAL BY THE R EVENUE STA NDS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 1 3 T H JU L Y , 2020 AS PER RULE 34(4) BY PLACING THE PRONOUNCEMENT LIST ON NOTICE BOARD. SD/ - SD/ - (PAWAN SINGH) JUDICIAL MEMBER (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DATE : 1 3 T H JU L Y , 2020 *SSL* 4 ITA NO. 4962/MUM/2018 SHRI ANAM M. PARGI (HUF) COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI