ITO WARD 1(5), THANE WEST V. SHRI HAZARATALI MOHD. YADGAR SHAMANI, THANE

ITA 5052/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1230 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 02-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Bogus purchase
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ) , H BENCH MUMBAI BEFORE SHRI RAJESH KUMAR , AM & SHRI PAVAN KUMAR GADALE , JM ITA NO. 5052 /MUM/ 20 19 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 5053 /MUM/ 2019 ( ASSESSMENT YEAR : 2010 - 11 ) & ITA NO. 5054 /MUM/ 2 019 ( ASSESSMENT YEAR : 2011 - 12 ) INCOME TAX OFFICER WARD 1(5), ROOM NO.14 6 TH FLOOR, B - WING WAGALE INDUSTRIAL ESTATE THANE WEST 400 604 VS. SHRI HAZRATALI MOHD. YADGAR SHAMANI PROP - M/S. H.A. STEEL TRADERS SAINATH NAGAR, NASHIK HIGHWAY ROAD, MAJIWADA THANE (W) - 400601 PAN/GIR NO. ACCPS2585E (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI GURBINDER SINGH ASSESSEE BY NONE DATE OF HEARING 19 / 01 /202 1 DATE OF PRONOUNCEMENT 22 / 01 /202 1 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBE R: THE AFORESAID APPEAL S HA VE BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 14/05/2019, PASSED BY THE CIT(A) - 1 , MUMBAI, FOR THE ASSESSMENT YEAR 2009 - 10 , 2010 - 11 & 2011 - 12 RESPECTIVELY. ITA NO . 5052/MUM/2019 TO 5054/MUM/2019 SHRI HAZRATALI MOHD. YADGAR SHAMANI 2 2. THE ONLY ISSUE RAISED IN ALL THE APPEALS IS AGAINST DELETION OF PENALTY BY CIT(A) AS IMPOSED BY THE AO U/S.271(1)(C) OF THE ACT ON THE ESTIMATED INCOME ON BOGUS PURCHASES . ITA NO.5052/MUM/2019 (ASSESSMENT YEAR 2009 - 10) 3. FIRST WE WOULD LIKE TO DISCUSS THE FACTS OF THE CASE IN A.Y.2009 - 10. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL. THE ASSESSEE FILED RETURN OF INCOME ON 24/09/2009 BY DECLARING INCOME OF RS.2,82,170/ - WHICH WAS PROCESSED U/S.143(1) OF THE ACT. THEREAFTER, AO RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT, G OVERNMENT OF MAHARASHTRA THAT ASSESSEE WAS BENEFICIARY OF HAWALA PURCHASE ENTRIES AND ACCORDINGLY, THE CASE OF THE ASSESSEE WAS REOPENED U/S.147 BY ISSUING NOTICE U/S.148 OF THE ACT . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASS ESSEE HAS MADE AGGREGATE HAWALA PURCHASE S OF RS.3,11,069/ - FROM TWO PARTIES AND ACCORDINGLY, CALLED FOR THE ASSESSEE TO PROVE THE GENUINENESS OF THE SAME. THE AO ALSO ISSUED NOTICE U/S.133(6) OF THE ACT, HOWEVER, THE SAME WERE RETURNED UNSERVED. THEREAFTER , AO FINALLY NOT FINDING THE SUBMISSION S OF THE ASSESSEE AS TENABLE , ADDED THE ENTIRE AMOUNT OF PURCHASES TO THE INCOME OF THE ASSESSEE. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY PART CONFIRMING 50% OF THE A DDITION . T HEREAFTER, AO ISSUED A SHOW - CAUSE NOTICE TO THE ASSESSEE AS ITA NO . 5052/MUM/2019 TO 5054/MUM/2019 SHRI HAZRATALI MOHD. YADGAR SHAMANI 3 TO WHY THE PENALTY SHOULD NOT BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME . THE ASSESSEE REPLIED THE SHOW CAUSE NOTICE ON 19.03.2018 BY SUBMITTING THAT ASSESSEE HAD DISCLOS ED ALL THE FACTS QUA THE PURCHASES IN THE RETURN OF INCOME AND IN VIEW OF APEX COURT DECISION IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS P LTD (2010) 322 ITR 158 SC, NO PENALTY IS LEVIABLE. THE AO REJCTED THE CONTENTIONS OF THE ASSESSEE AND LEVIED A PE NALTY OF RS.30,145/ - BEING 100% OF TAX TO BE EVADED BY INVOKING EXPLANATION - 1 TO SECTION 271(1 )(C) OF THE ACT. 4. THEREAFTER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT NO PENALTY IS LEVIABL E IN CASE OF ESTIMATION OF INCOME. THE LD. CIT(A) FOLLOWED VARIOUS ORDERS REFERRED TO PARA NO.6 OF THE APPELLATE ORDER INCLUDING THAT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., (2010) 322 ITR 158 (SC) AND FINALLY ALLO WED THE APPEAL OF THE ASSESSEE. NOW, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL ON RECORD. THE UNDI SPUTED FACTS ARE THAT ASSESSEE WAS BENEFICIARY OF HAWALA PURCHASE ENTRIE S TO THE TUNE OF RS. 3,11,069/ - WHICH WAS ADDED BY THE AO TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF BEING NON - GENUINE. THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY PARTLY SUSTAINING THE ADDITION AT 50% OF THE BOGUS PURCHASES. THE LD. CIT(A ) DELETED THE PENALTY ITA NO . 5052/MUM/2019 TO 5054/MUM/2019 SHRI HAZRATALI MOHD. YADGAR SHAMANI 4 IMPOSED OF RS.30,145/ - ON THE GROUND THAT NO PENALTY IS LEVIABLE IN CASE OF ESTIMATION OF INCOME . W HILE PASSING THE ORDER , LD. CIT(A) RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., (SUPRA) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT IF ASSESSEE HAS FURNISHED ALL THE DETAILS OF EXPENDITURE AS WELL AS INCOME IN ITS RETURN OF INCOME WHICH WAS NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. THEN IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, BY ITSELF WOULD NOT, IN OUR OPINION, ATTRAC T THE PENALTY U/S.271(1)(C). THUS, THE ORDER PASSED BY LD. CIT(A) APPEARS TO BE A REASONED ORDER RELYING UPON THE HONBLE SUPREME COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) , AND VARIOUS OTHER DECISIONS OF THE CO - ORDINATE BENCHES . T HEREFORE, WE ARE INCLINED TO UPH O LD THE ORDER OF LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. ITA NO.5053/MUM/2019 AND 5054/MUM/2019 (ASSESSMENT YEARS 2010 - 11 AND 2011 - 12) 6. THE ISSUE RAISED IN THESE APPEALS IS IDENTICAL TO ONE AS DECI DED BY US S IN ITA NO. 5052/MUM/2019 WHEREIN THE APPEAL OF THE REVENUE WAS DISMISSED. THEREFORE OUR DECISION IN ITA NO. 5052/MUM/2019 SHALL APPLY, MUTATIS MUTANDIS, TO TH ESE APPEAL S ALSO . A CCORDINGLY, WE DISMISS THESE APPEALS OF THE REVENUE. ITA NO . 5052/MUM/2019 TO 5054/MUM/2019 SHRI HAZRATALI MOHD. YADGAR SHAMANI 5 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 2 2 / 01 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( PAVAN KUMAR GADALE ) SD/ - ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 22 / 01 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//