ACIT-28(3), MUMBAI V. SHRI SHREEKANT GWALDAS DAMANI, MUMBAI

ITA 5191/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3788 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 07-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH DR PRESENT
• Keywords: Tax effect
• Section: 271(1)(c); 147

Judgement Text

1 ITA NO.5191/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K.PRADHAN (ACCOUNTANT MEMBER) I.T.A. NO. 5191/MUM/2019 (ASSESSMENT YEAR : 2011 - 12 ) ACIT - 28(3), MUMBAI VS SHRI SHREEKANT GWALDAS DAMANI FLA T A - 703, CHAWLA PLAZA, SECTOR - 11, CBD BELAPUR, NAVI MUMBAI - 400 614 PAN : AABPD2051P APPELLANT RESPONDENT PRESENT FOR APPELLANT SHRI GURBINDER SINGH, DR PRESENT FOR RESPONDENT NONE DATE OF HEARING 16 - 02 - 2021 DATE OF PRONOUNCEMENT 2 2 - 02 - 2021 O R D E R PER SAKTIJIT DEY (JM) THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 15 - 05 - 2019 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 26, MUMBAI DELETING THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2011 - 12. 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT FOR THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEEDED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2 ITA NO.5191/MUM/2019 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 30 - 09 - 2011 DECLARING T OTAL INCOME OF RS.31,03,750/ - . SUBSEQUENTLY, THE A SSESSING O FFICER RECEIV ED INFORMATION FROM THE INVESTIGATION WING THAT PURCHASES WORTH RS15,99,557/ - SHOWN TO HAVE BEEN MADE FROM TWO PARTIES ARE NON GENUINE , THE A SSESSING O FFICER REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE A S SESSING O FFICER NOTICED THAT AS PER THE INFORMATION RECEIVED, THE TWO PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE PURCHASED THE GOODS HAVE BEEN IDENTIFIED BY THE SALES - TAX DEPARTMENT AS HAWALA OPERATORS PROVIDING BILLS WITHOUT ENTERING INTO ACTUAL TRANS ACTION. THEREFORE, HE CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES THROUGH PROPER EVIDENCE . ALLEGING THAT THE ASSESSEE FAILED TO FURNISH COGENT EVIDENCE TO PROVE THE GENUINENESS, THE ASSESSING OFFICER TREATED THE PURCHASES OF RS.15,99,55 7/ - AS NON GENUINE. HOWEVER, INSTEAD OF DISALLOWING THE ENTIRE PURCHASES, HE DISALLOWED AN AMOUNT OF RS.1,99,945/ - , BEING 12.5% OF THE ALLEGED NON GENUINE PURCHASES. ON THE BASIS OF SUCH DISALLOWANCE / ADDITION, THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ALLEGING CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME AND ULTIMATELY PASSED AN ORDER IM POSING PENALTY OF RS.61,784/ - . AGAINST THE PENALTY ORDER SO PASSED, ASSESSEE PREFER RED APPEAL BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER (APPEALS) DELETED THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE ACT. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PE RUSED THE MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, THOUGH , THE ASSESSING OFFICER HAS DOUBTED THE SOURCE OF 3 ITA NO.5191/MUM/2019 THE DISPUTED PURCHASES; HOWEVER, HE WAS CONVIN CED THAT THE GOODS REPRESENTING SUCH PURCHASES WERE IN POSSESSION OF THE ASSESSEE AND THE ASSESSEE HAD EFFECTED CORRESPONDING SALES. FOR THIS REASON ALONE, THE ASSESSING OFFICER INSTEAD OF DISALLOWING THE ENTIRE PURCHASES, HAS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. THUS, AS COULD BE SEEN, THE ADDITION ON THE BASIS OF WHICH PENALTY U NDER SECTION 271(1)(C) OF THE ACT HAS BEEN IMPOSED, WAS MADE PUR ELY ON ESTIMATE BASIS BY ENTERTAINING DOUBT REGARDING THE SOURCE OF PURCHASE. THEREFORE, ANY ADDITION / DISALLOWANCE MADE ON PURELY ESTIMATE BASIS BY ENTERTAINING DOUBTS AND PRESUMPTION WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS EITHER CONCEALE D HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THAT BEING THE CASE, NO PENALTY U NDER SECTION 271(1)(C) OF THE ACT CAN BE IMPOSED. THEREFORE, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELETING THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE ACT. 5. HAVING HELD SO, THERE IS ONE MORE ASPECT TO THE ISSUE. UNDISPUTEDLY, THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT OF RS.50 LAKHS PRESCRIBED BY THE CENTRA BOARD OF DIRECT T AXES (CBDT) IN CIRCULAR NO. 17/2019 DATED 8 TH AUGUST, 2019 . IN OUR CONSIDERED OPINION, THE APPEAL FILED BY THE REVENUE SINCE INVOLVES THE ISSUE OF IMPOSITION OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT, WILL NOT BE PROTECTED UNDER ANY OF THE EXCEPTIONS P ROVIDED IN THE CBDT CIRCULAR REFERRED TO ABOVE. THEREFORE, FOR THIS REASON ALSO, THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. GROUNDS ARE DISMISSED. 6. IN THE RESULT, APPEAL IS DISMISSED. 4 ITA NO.5191/MUM/2019 ORDER PRONOUNCED ON THIS 2 2 / 02/2021 S D / - S D / - (N .K. PRADHAN) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 2 2 /02/2021 COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 5 ITA NO.5191/MUM/2019 1. DATE OF DICTATION 16 - 02 - 2021 SR PS 2. DRAFT PLACED BEFORE AUTHOR 17 - 02 - 2021 SR PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED / APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR PS / PS SR. PS 6. DATE OF PRONOUNCEMENT SR. PS 7. FILE SENT TO BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DESPATCH OF ORDER