ITO, Ward-1(3), MUMBAI V. M/s. Vishvakarma Fabricators Prop. Ashwin A. Panchal, MUMBAI

ITA 5047/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2636 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 02-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect
• Section: 271(1)(c)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI , !'#,$%!' &! BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER !. 5046/ / 2019 (%*. . 2010-11 ) ITA NO.5046/MUM/2019(A.Y.2010-11) !. 5047/ / 2019 (%*. . 2011-12 ) ITA NO.5047/MUM/2019(A.Y.2011-12) INCOME TAX OFFICER, WARD 1(3),THANE, ROOM NO.10, 6 TH FLOOR, B-WING, WAGLE INDUSTRIAL ESTATE, THANE (W) 400 064 ...... #, / APPELLANT * VS. M/S. VISHVAKARMA FABRICATORS PROP.ASHWIN A. PANCHAL, B/2/402 SWASTIK RESIDENCY, G.B.ROAD, KASARVADAVALI, KAVESAR, THANE 400 607 PAN: AFZPA6269D ..... %-/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS. USHA GAIKWAD ! *.%- #/ DATE OF HEARING : 04/02/2021 /0 .%- #/ DATE OF PRONOUNCEMENT : 17/02/2021 &/ ORDER PER VIKAS AWASTHY,JM: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE ( IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, RESPECTIVELY. BOTH THE IMPUGNED ORDERS 2 ITA NO.5046/MUM/2019(A.Y.2010-11) ITA NO.5047/MUM/2019(A.Y.2011-12) ARE OF EVEN DATE I.E. 15/05/2019. SINCE, BOTH THES E APPEALS GERMINATE FROM SAME SET OF FACTS, THESE APPEALS ARE TAKEN UP TOGET HER FOR ADJUDICATION AND ARE DECIDED BY A COMMON ORDER. 2. MS. USHA GAIKWAD, REPRESENTING THE DEPARTMENT S UBMITTED THAT THESE APPEALS HAVE BEEN FILED BY THE DEPARTMENT ASSAILING THE FINDINGS OF CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE LD.DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT IN ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES. THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS ALSO INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE A SSESSING OFFICER LEVIED PENALTY OF RS.38,044/- IN ASSESSMENT YEAR 2010-11 AND RS.61 ,309/- IN ASSESSMENT YEAR 2011-12 ON ADDITION RESULTING FROM BOGUS PURCHASES. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THOUGH THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS LESS THAN THE MONITORY LIMIT PRESCRIBED B Y CBDT VIDE CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CASE OF ASSESS EE FALLS UNDER EXCEPTION SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 20 18 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . 3. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE ASSESSEE HAS AGREED FOR THE ADDITION IN BOTH THE IMPUGNED ASSES SMENT YEARS, THEREFORE, THE PENALTY WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER . THE CIT(A) HAS DELETED THE PENALTY BY PLACING RELIANCE ON THE DECISIONS OF TRI BUNAL AND THE JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT V S. RELIANCE PETROPRODUCTS (P) LTD.,322 ITR 158(SC). THE RATIO OF SAID JUDGMENT DO ES NOT APPLY IN THE FACTS OF PRESENT CASE. 3 ITA NO.5046/MUM/2019(A.Y.2010-11) ITA NO.5047/MUM/2019(A.Y.2011-12) 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTM ENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ADDITION HAS BEEN MADE ON AC COUNT OF BOGUS PURCHASES BY ESTIMATING ESCAPED PROFIT EMBEDDED IN ALLEGED BOGUS PURCHASES. APPARENTLY, THE ASSESSEE ACCEPTED THE ADDITION AND HAS NOT LITIGATE D FURTHER BEFORE THE HIGHER FORUMS. IT IS AN ACCEPTED LEGAL POSITION THAT NO P ENALTY UNDER SECTION 271(1)(C) OF THE ACT IS SUSTAINABLE ON ADDITIONS THAT HAVE BEEN MADE MERELY ON THE BASIS OF ESTIMATIONS. FURTHER, NO PENALTY UNDER SECTION 271 (1)(C) OF THE ACT CAN BE LEVIED MERELY FOR THE REASON THAT THE ASSESSEE HAS ACCEPTE D THE ADDITION. LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT A UTOMATIC. PENALTY PROCEEDINGS ARE DISTINCT AND SEPARATE FROM ASSESSMENT PROCEEDIN GS. THE FINDING GIVEN IN ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE SO FAR AS THE PENALTY PROCEEDINGS ARE CONCERNED. IN THE PRESENT CASE WE FIND THAT THE ASS ESSING OFFICER WHILE MAKING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAS NOT GIVEN A DEFINITE FINDING OF FACT REGARDING THE AMOUNT CONCEALED OR INACCURATE PARTI CULARS OF INCOME IN THE RETURN OF INCOME. THE ASSESSING OFFICER MADE ADDITION BY ESTIMATINGPROFIT THAT OSTENSIBLY ESCAPED TAX NET. 5. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE C ASE OF CIT VS. SANGURUR VANASPATI MILLS LTD.,303 ITR 53(P&H) HAS HELD THA T WHERE ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATION AND NOT ON ACCOUNT OF ANY CONCRETE EVIDENCE OF CONCEALMENT, PENALTY UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE INVOKED. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CI T VS. KRISHI TYRE RETREADING INDUSTRIES, REPORTED AS 360 ITR 581(RAJ ), TAKING A SIMILAR VIEW HELD THAT WHERE ESTIMATED ADDITIONS ARE MADE, NO PENALTY IS LEVIABLE UNDER SECTION 271(1)(C) OF THE ACT. THUS, IN THE LIGHT OF THE FA CTS OF THE CASE AND THE DECISIONS 4 ITA NO.5046/MUM/2019(A.Y.2010-11) ITA NO.5047/MUM/2019(A.Y.2011-12) REFERRED ABOVE, WE FIND NO INFIRMITY IN THE IMPUGNE D ORDERS OF CIT(A) FOR RESPECTIVE ASSESSMENT YEARS DELETING PENALTY. THERE FORE, THE SAME ARE UPHELD AND BOTH THE APPEALS OF THE REVENUE ARE DISMISSED SANS MERIT. 6. IN THE RESULT, APPEALS BY THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDA Y, THE 17 TH DAY OF FEBRUARY, 2021. SD/- SD/- (PRAMOD KUMAR) (VIKAS AWAS THY) / VICE PRESIDENT $%!' / JUDICIAL MEMBER / MUMBAI, 2*/ DATED 17/02/2021 VM , SR. PS (O/S) %-3 4& 0- COPY OF THE ORDER FORWARDED TO : 1. #, / THE APPELLANT , 2. %- / THE RESPONDENT. 3. 5- ( )/ THE CIT(A)- 4. 5- CIT 5. 67%-%* , . . . , / DR, ITAT, MUMBAI 6. 789: / GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI