M/S.STATUS TRADUBG CORPORATION, MUMBAI V. DY CIT 25(1)(2), MUMBAI

ITA 5172/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4016 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: PRAKASH K JOTWANI AR S; RAJANI RAM
• Keywords: Bogus purchase
• Section: 271(1)(c); 22; 148

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAVISH SOOD , JM ./ I.T.A. NO . 5172 & 5173 / MUM/ 2018 ( / ASSESSMENT YEAR: 20 10 - 11 & 2011 - 12 ) M/S STATUS TRADING CORPORATION DULANI & CO. 318, J. K. CHAMBER PREMISES CSL, SECTION - 17, VASHI, NAVI MUMBAI - 400 703 / VS. D CIT 25 (1) (2) , ROOM NO. 403, 4 TH FLOOR, C - 10, PRATYAKSHKAR BHAVAN, BANDRA(E), MUMBAI 400 050 ./ ./ PAN NO. A AAFS 3198 R ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAJANI RAM & SHRI PRAKASH K. JOTWANI , AR S / RESPONDENTBY : SHRI V. VINOD KUMAR , DR / DATE OF HEARING : 27 .11 .2019 / DATE OF PRONOUNCEMENT : 22.01.2020 2 I.T.A. NO. 5172 & 5173 /MUM/2018 M/S STATUS TRADING CORPORATION / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) : THE PRESENT TWO ( 2 ) APPEAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMIS S IONER OF INCOME TAX (APPEALS) - 37 , MUMBAI, IN SHORT LD. CIT(A) DATED 28.06.2018 FOR AY 2010 - 11 & 2011 - 12 RESPECTIVE LY. 2. SINC E THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR TH E SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED, HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDE R. FIR STLY, WE ARE TAKING ITA NO. 5172 /MUM/2018 FOR AY 20 10 - 11 F ILED BY THE ASSESSEE. 3 . THE BRIEF FACTS OF THE CASE ARE, ASSESSEE FILED IT S RETURN OF INCOME DECLARING INCOME OF RS. 28,070/ - . THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE OFFICE OF DGIT(INV), MUMBAI FORWARDED THROUGH DGI T (INV.) . IN THE LIGHT OF THE ABOVE INFORMATION AND AFTER RECORDING REASONS , N OTICE UNDER SECTION 148 OF THE A CT WAS ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AS THE ASSESSEE FAILED TO PROVE 3 I.T.A. NO. 5172 & 5173 /MUM/2018 M/S STATUS TRADING CORPORATION THE GENUINENESS OF THE PURCHASES BY SUBMITTING EVI DENCES AS CALLED FOR BY THE ASSESSING OFFICER. ACCORDING TO THE ASSESSING OFFICER , ASSESSEE HAS INTENTIONALLY INFLATED THE PURCHASES TO REDUCE THE TAXABLE INCOME, ACCORDINGLY IN ORDER TO GIVE BENEFIT OF DOUBT TO THE ASSESSEE HE ESTI MATED THE ADDITION ON NO N - GENUINE PURCHASES AS THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER INITIATED THE PENALTY PR OCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, ON NON - SATISFACTION OF THE SUBMISSION OF THE ASSESSEE , ASSESSING OFFICER LEVIED THE MINIMUM PENALTY OF RS. 30,084 / - . ACCORDING TO ASSESSING OFFICER , ASSESSEE HAS NOT DISCHARGED THE ONUS OF PROOF ON GENUINENESS OF PURCHASE MADE FROM THE ALLEGED HAWALA DEALERS WHICH HAS BEEN DISALLOWED IN THE ASSESSMENT ORDER. 4. AGGRIEVED WITH THE ABOVE, ASSESSEE PREFERRED AN APPEAL B EFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , CONFIRMED THE PENALTY LEVIED BY AO. 5. AGGRIEVED WITH ORDER OF LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US RAIS ING FOLLOWING GROUNDS OF APPEAL: - 4 I.T.A. NO. 5172 & 5173 /MUM/2018 M/S STATUS TRADING CORPORATION ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE AND IN LAW: 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELLANT HAD FAILED TO OFFER AN EXPLANATION DESPITE EVIDENCE FILED BEFORE HIM . 2. THE LEARNED CIT(A) ERRED IN CONFIRMING LEV Y OF PENALTY OF RS. 30,084 / - BEING LEVIED BY A O BY MA KING AD HOCK ADDITION OF RS.97,363/ - BEIN G 12.5% OF GENUINE PURCHASES OF RS.7,78, 904/ - BY TREATING THE SAME AS BOGUS PURCHASES , BASED ON THIRD PARTY INFORMATION, TREATING PARTICULARS OF SAID PURCHASES AS NOT TO HIS SATISFACTION , DISREGARDING THE E VIDENCES FILED BEFORE HIM . 3. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER OR AMEND THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPELLANT. 6. BEFORE US LEARNED AR BROUGHT TO OUR NOTICE FACTS OF THE CASE AND SUBMITTED THAT ASSESSING OFFICER HAS AC CEPTED THE TRADING AC TIVITIES OF THE ASSESSEE THAT ASSESSEE PURCHASE S AND SALES SIMULTANEOUSLY AND HE DOUBTED ONLY PURCHASES AND SALES WAS NEVER QUESTIONED. HE SUBMITTED THAT ASSESSING OFFICER RELIED ON THIRD PARTY INFORMATION AND THE INCOME WAS ESTIMATED BY THE 5 I.T.A. NO. 5172 & 5173 /MUM/2018 M/S STATUS TRADING CORPORATION ASSESSING OFFICER AT THE TIME OF ASSESSMENT AND HE SUBMITTED THAT ON ESTIMATION, PENALTY CANNOT BE IMPOSED, IN THIS REGARD HE RELIED ON COORDINATE BENCH DECISION OF ITAT IN ITA N UMBER 496/MUMBAI/2018 IN ELCON PIPE AND FITTINGS PVT. LTD. AND ITA NO. 2998/MUMBAI/2017. 7. ON THE OTHER HAND , LD DR RELIED ON THE ORDER PASSED BY LD. CIT(A). 8. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD. WE NOTICE THAT ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE BY REJECTING THE DOCUMENTS SUBM ITTED BY THE ASSESSEE IN SUPPORT OF THE PURCHASES AND IN ORDER TO GIVE BENEFIT OF DOUBT TO THE ASSESSEE, THE AO ESTIMATED THE ADDITION AT 12.5% OF THE PURCHASES. WE NOTICE TH AT THE COURTS HAVE HELD IN THE C ATENA OF CASES, THE PENALTY CANNOT BE LEVIED ON ES TIMATION OF INCOME. THEREFORE , IN OUR CONSIDERED VIEW ASSESSING OFFICER CANNOT LEVY P ENALTY ON ESTIMATION OF INCOME AS IN THE PRESENT CASE. ACCORDINGLY , WE ARE DELETING THE PENALTY LEVIED BY THE ASSESS ING OFFICER AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . 6 I.T.A. NO. 5172 & 5173 /MUM/2018 M/S STATUS TRADING CORPORATION 9. THE OTHER APPEAL OF ASSESSEE IN ITA NUMBER 5173/MUMBAI/2018, THE FACTS IN THIS APPEAL ARE SIMILAR TO THE FACTS IN ITA NUMBER 5172/MUMBAI/2018, THEREFORE, THE GROUNDS RAISED IN THIS APPEAL ARE ALSO ALLOWED. 10 . IN THE NET RESULT, BOTH THE APPE AL S FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JAN 2020 . SD/ - SD/ - (RAVISH SOOD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / AC COUNTANT MEMBER MUMBAI ; DATED : 22 . 01.2020 SR.PS. DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI