RUNWAL CONSTRUCTIION, MUMBAI V. DCIT CEN CIR 23, MUMBAI

ITA 5094/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0160 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT & SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 5094/MUM/2015 ASSESSMENT YEAR : 2011 -2012 M/S. RUNWAL CONSTRUCTION 5 TH FLOOR, RUNWAL & OMKAR ESQUARE EASTERN EXPRESS HIGHWAY, SION (E), MUMBAI 400 022 PAN AAAFR1211Q VS DCIT CENT CIR 23 MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JOSHI RESPONDENT BY : SHRI PURUSHOTTAM KUMAR DATE OF HEARING : 31. 08 .2017 DATE OF PRONOUNCEMENT : 04 .0 9 .2017 O R D E R PER P K BANSAL, VICE-PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) -52, MUMBAI, DATED 24.08.2015, FOR A.Y.2011- 12. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE SUSTENANCE O F THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) AMOUNTING TO ` 6,25,039/- @100% ON THE TAX SOUGHT TO BE EVADED. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER WHILE COMPLETING THE ITA NO.5094/MUM/2015 M/S. RUNWAL CONSTRUCTION 2 ASSESSMENT, TOOK A VIEW THAT THE ADDITION ON ACCOUN T OF BOGUS PURCHASES AMOUNTING TO ` 20,22,779/- PERTAINED TO A.Y. 2013 -14 AND, ACCORD INGLY DIRECTED TO ASSESSING OFFICER TO REVISE THE RETURN FOR A.Y. 2013-14 AND SURRENDER THE PURCHASES TO TAX IN THE SAID ASSESSME NT YEAR. THE ASSESSING OFFICER IN RESPECT OF THE BOGUS PURCHASES DID NOT M AKE ANY ADDITION IN THE IMPUGNED ASSESSMENT YEAR BUT INITIATED PENALTY AGAI NST THE ASSESSEE U/S. 271(1)(C) AND ULTIMATELY LEVIED PENALTY ON THE TAX SOUGHT TO BE EVADED @100% ON THE SAID BOGUS PURCHASES OF ` 20,22,779/-. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSIN G OFFICER. 3. WE FIND THAT DURING THE IMPUGNED ASSESSMENT YEAR , THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION IN RESPECT OF THE SAID BOGUS PURCHASES. ONCE THERE IS NO ADDITION DURING THE IMPUGNED ASSES SMENT YEAR, THE QUESTION OF IMPOSING PENALTY DOES NOT ARISE. THE PROVISIONS OF SECTION 271(1)(III), WHICH SPEAKS OF PENALTY, STATES THAT A PENALTY HAS TO BE LEVIED OVER A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT E XCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY THE REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR THE FURNISHING IN INAC CURATE PARTICULARS OF SUCH INCOME. EXPLANATION 4 DEFINES TAX SOUGHT TO BE EVA DED. AS PER THE EXPLANATION, TAX SOUGHT TO BE EVADED HAS TO BE COMP UTED WITH REFERENCE TO THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT ITA NO.5094/MUM/2015 M/S. RUNWAL CONSTRUCTION 3 WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BE EN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HA VE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED. IN THI S CASE, THE FACT REMAINS THAT THE RETURNED INCOME AS WELL AS THE ASSESSED IN COME REMAIN THE SAME. IN THE IMPUGNED ASSESSMENT YEAR NO ADDITION HAS BEEN M ADE IN RESPECT OF INCOME FOR WHICH PENALTY IS SOUGHT TO BE LEVIED. W E, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED U /S. 271(1)(C) OF THE ACT. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (AMARJIT SINGH) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 4 TH SEPTEMBER, 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, D BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI