INCOME TAX OFFICER 25(3)(5), MUMBAI V. M/S.V.M.STEELS, MUMBAI

ITA 5020/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4538 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 01-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRUNAL MEHTA
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

ITA NO.: 5020 /MUM/2019 ASSESSMENT YEAR: 2010 - 11 PAGE 1 OF 3 INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH, MUMBAI [CORAM: PRAMOD KUMAR, VICE PRESIDENT, AND, VIKAS AWASTHY JUDICIAL MEMBER] ITA NO.: 5020/MUM/2019 ASSESSMENT YEAR: 2010 - 11 INCOME TAX OFFICER 25(3)(5) MUMBAI .. APPELLANT VS. M/S. V. M. STEELS .RESPONDENT A - 402/156, JUHU TRISHUL, GULMOHARROAD NO. 6, JVPD SCHEME, VILE PARLE (W) MUMBAI 400049 [PAN: AAHFV3036E] APPEARANCES: USHA GAIKWAD FOR THE APPELLANT KRUNAL MEHTA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 04, 2021 DATE OF PRONOUNC ING THE ORDER : APRIL 3 0 , 2021 O R D E R PER PRAMOD KUMAR, VP: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 29 TH MAY 2019, PASSED BY THE LEARNED CIT(A) IN THE MATTER OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 2010 - 11. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOWS: - 1) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE AO U/S 271 (1)(C) OF THE I.T. ACT, 1961 TO THE TUNE OF RS. 40,930/ - RELEVANT TO QUANTUM ADDITION MADE BY THE AO AND LD. CIT(A) FAI LED TO APPRECIATE THE FACT THAT THE QUANTUM ADDITION MADE BY THE AO IS SQUARELY COVERED UNDER THE EXCEPTIONS MENTIONED IN PARA 10 OF CBDT CIRCULAR NO. 03/2018 DATED 11.07.2018 AND ITS 'AMENDMENT DATED 20.08.2018. 2) 'ON THE FACTS AND IN THE' CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) FAILED TO CONSIDER THE FACT THAT THE QUANTUM ADDITION FOR THE YEAR UNDER CONSIDERATION WAS BASED ON THE INFORMATION RECEIVED FROM DGIT (INV), MUMBAI THAT THE HAWALA DEALERS HAD CONFIRMED ON OATH BEFORE THE SALES TAX DEPARTMENT THAT PURCHASES MADE BY THE ASSESSEE WERE WITHOUT SUPPLYING THE GOODS, HENCE THE ITA NO.: 5020 /MUM/2019 ASSESSMENT YEAR: 2010 - 11 PAGE 2 OF 3 PENALTY LEVIED ON THE QUANTUM ADDITION FOR THE YEAR UNDER CONSIDERATION STANDS JUSTIFIED'. 3. LEARNED REPRESENTATIVE FAIRLY AGREE THAT THE ISSUE IN APPEAL IS NOW CO VERED IN FAVOUR OF THE ASSESSEE BY A NUMBER OF DECISIONS OF CO - ORDINATE BENCHES OF THIS TRIBUNAL. LEARNED DEPARTMENTAL REPRESENTATIVE, NEVERTHELESS, RELIED UPON THE STAND OF THE ASSESSING OFFICER AND JUSTIFIED THE IMPUGNED PENALTY OF RS. 40,930/ - . THE IMPU GNED PENALTY IS IN RESPECT OF ALLEGED BOGUS PURCHASES OF RS. 10,59,755/ - OUT OF WHICH 15% HAS BEEN CONFIRMED BY THE CIT(A) ON ESTIMATED BASIS. DEALING WITH A MATERIALLY SIMILAR SITUATION, A CO - ORDINATE BENCH OF THIS TRIBUNAL HAS OBSERVED AS FOLLOWS: - 1. IN THE CASE OF SHRI AJAY LOKNATH LOHIA, I.T.A. NO. 2998/MUM/2017 FOR THE AY 2009 - 10 VIDE ORDER DTD. 05/10/2018 THE HON'BLE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH 'A', MUMBAI HAS HELD THAT 'HAVING HEARD BOTH SIDES, WE FIND MERIT IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT ALTHOUGH THE AO HAS ESTIMATED 25% GROSS PROFIT ON ALLEGED BOGUS PURCHASES, NEVER MADE ANY OBSERVATIONS WITH REGARD TO THE INCORRECTNESS IN DETAILS FILED BY THE ASSESSEE TO PROVE SUCH PURCHASES. THE AO NEVER DISBELIEVED INFO RMATION FILED BY THE ASSESSEE, BUT THE PROCEEDED ON THE BASIS OF INFORMATION RECEIVED FROM SALES - TAX DEPARTMENT TO MAKE ADDITIONS. THE AO HAS MADE SUCH ADDITION ON AD HOC BASIS BY ESTIMATING GROSS PROFIT ON ALLEGED BOGUS PURCHASES. FROM THESE FACTS, IT IS VERY CLEAR THAT THE AO FAILED TO MAKE A CASE OF DELIBERATE ATTEMPT BY THE ASSESSEE TO FURNISH INACCURATE PARTICULARS OF INCOME. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT MERE ITA 2998/MUM/2017 DISALLOWANCE OF PURCHASES ON AD HOC BASIS DOES NOT TANTAMOU NT TO WILFUL FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. ACCORDINGLY WE DIRECT THE AO TO DELETE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT.' 4. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH - W HICH HAS ALSO BEEN REPRODUCED BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER. RESPECTFULLY FOLLOWING THE SAME, WE APPROVE, THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, THE APPEALS IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 3 0 T H DAY OF APRIL, 2021. S D / - S D / - VIKAS AWASTHY PRAMOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) MUMBAI, DATED THE 3 0 T H DAY OF APRIL , 2021 ITA NO.: 5020 /MUM/2019 ASSESSMENT YEAR: 2010 - 11 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI