Atul Jain Prop. Metal Kraft Engineering , Ujjain V. Assistant Commissioner of Income Tax Circle 2 (1), Ujjain, Ujjain

ITA 537/Ind/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4147 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 25-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: S S DESH
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

ATUL JAIN ITA NO.537/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.537/IND/2017 ASSESSMENT YEAR: 2009-10 REVENUE BY S HRI P.K. MITRA, SR.DR ASSESSEE BY SHRI S.S. DESHPANDE ,C.A DATE OF HEARING 09.10 . 2018 DATE OF PRO NOUNCEMENT 11 .10 .2018 O R D E R PER MANISH BORAD, AM . THIS APPEAL OF ASSESSEE PERTAINING TO A.Y. 2009-10 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS),UJJAIN (IN SHORT CIT(A)), DATED 06.0 6.2017 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C ) OF THE I NCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 17. 02.2016 BY ACIT-2(1) UJJAIN. SHRI ATUL JAIN, PROP. METAL KRAFT ENGINEERING, 5-A INDUSTRIAL AREA, MAXI ROAD, UJJAIN A CIT CIRCLE 2(1), UJJAIN ( APPELLANT ) (RESPONDENT ) PAN NO. AEAPJ4319R ATUL JAIN ITA NO.537/IND/2017 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS; 1. THE LD.CIT(A) HAS ERRED IN MAINTAINING THE PENA LTY U/S 271(1)(C ) UPTO 100% INSTEAD OF 150%. THE PENALTY IS WRONG AN D UNJUSTIFIED. 2. LD.CIT(A) HAS NOT CONSIDERED THE FACTS GIVEN BY THE APPELLANT BEFORE HIM. 3. THE LD.CIT(A) HAS NOT GIVEN THE FINAL OPPORTUNIT Y OF BEING HEARD BEFORE PASSING THE APPEAL ORDER ON 06.06.2017. THE ORDER WAS PASSED ON BASIS OF SUBMISSION GIVEN BY THE APPELLAN T PREVIOUSLY. THE HON'BLE I.T.A.T HAS GIVEN ORDER ON 15.05.2017 I N WHICH RELIEF IS GRANTED TO APPELLANT. HENCE PENALTY CONFIRMATION O RDER IS WORKING AND UNJUSTIFIED. 4. THE PENALTY U/S 271(1)(C ) MAY PLEASE BE DELETED 3. BRIEFLY STATED THE FACTS AS CULLED OUT FROM THE RECORDS ARE THAT ASSESSEE IS AN INDIVIDUAL. INCOME OF RS.11,86, 300/- WAS DECLARED IN THE INCOME TAX RETURN FILED ON 28.9.200 9. CASE PICKED UP FOR SCRUTINY. ASSESSMENT U/S 143(3) OF T HE ACT WAS COMPLETED ON 30.12.2011 AFTER MAKING ADDITION ON AC COUNT OF BOGUS PURCHASE OF RS.21,64,100/-. INCOME ASSESSED AT RS.33,50,400/-. SUBSEQUENTLY PENALTY PROCEEDINGS U /S 271(1)(C) OF THE ACT WERE INITIATED AND VIDE ORDER DATED 17.02.2016 PENALTY OF RS.10,03,065/- LEVIED @ 150% OF THE TAX, SOUGHT TO BE EVADED ON THE ADDITION FOR BOGUS PURCHASE OF ATUL JAIN ITA NO.537/IND/2017 3 RS.21,64,100/-. AGGRIEVED ASSESSEE PREFERRED APPEA L BEFORE LD.CIT(A) AND PARTLY SUCCEEDED AS THE PENALTY LEVIE D @150% WAS SCALED DOWN TO 100% OF TAX EVADED THEREBY CONFI RMING THE PENALTY AT RS.6,68,710/-. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 5. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT IN THE APPEAL BEFORE THE TRIBUNAL AGAINST THE QUANT UM ADDITION CONFIRMED BY LD.CIT(A) AND THE ASSESSEE G OT SUBSTANTIAL RELIEF AS THE HON'BLE TRIBUNAL VIDE ORD ER DATED 15.05.2017 IN I.T.A NO.797/IND/2014 SUSTAINED THE A DDITION ONLY TO THE EXTENT OF 25% OF BOGUS PURCHASES OF RS.21,64,100/-. THE LD. COUNSEL FOR THE ASSESSEE F URTHER SUBMITTED THAT AS THE ADDITION HAS BEEN REDUCED SUB STANTIALLY NO PENALTY SHOULD HAVE BEEN LEVIED. 6. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED AND SUPPORTED THE ORDERS OF LOWER AUTHORITIE S. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE SOLE GRIEVANCE RAISED BY THE ASSESSEE ATUL JAIN ITA NO.537/IND/2017 4 THROUGH THIS APPEAL IS AGAINST THE FINDING OF LD.CI T(A) CONFIRMING THE PENALTY OF RS.6,68,710/- LEVIED U/S 271(1)(C ) OF THE ACT ON THE ADDITION MADE BY THE LD.A.O FOR BOGU S PURCHASES AT RS.21,64,100/-. WE FIND THAT THE CO-O RDINATE BENCH IN I.T.A NO.797/IND/2014 WHILE ADJUDICATING T HE ISSUE OF QUANTUM ADDITION FOR BOGUS PURCHASES OF RS.21,64 ,000/- IN THE CASE OF ASSESSEE PARTLY ALLOWED THE ASSESSEES APPEAL BY SUSTAINING THE ADDITION ONLY TO THE EXTENT OF RS.5, 41,025/- BEING 25% OF THE ALLEGED BOGUS PURCHASES AT RS.21,6 4,100/- BY FOLLOWING THE JUDGMENT IN THE CASE OF VIJAY TRAD ING COMPANY VS ITO (2016) 76 TAXMANN.COM 366 (GUJARAT) HOLDING THAT THE ALLEGED DISALLOWANCE OF 25% OF THE BOGUS PURCHASES WAS MADE ON THE AMOUNT OF POSSIBLE FLUCTU ATION OF PURCHASE PRICE AS WELL AS TO COVER THE PROFIT ELEM ENT EMBEDDED THEREIN. 8. THE INSTANT APPEAL BEFORE US RELATES TO PENALTY LEVIED ON THE ALLEGED ADDITION OF RS.21,64,100/-. THE BASIS OF CALCULATING THE PENALTY IS THE ALLEGED ADDITION. AS CO-ORDINATE BENCH HAS DELETED THE ADDITION TO THE EXTENT OF 75% OF THE ATUL JAIN ITA NO.537/IND/2017 5 ALLEGED BOGUS PURCHASES AND THE REMAINING ADDITION IS ONLY AT RS.5,41,025. WE ARE OF THE CONSIDERED VIEW THAT TH E ALLEGED PENALTY OF RS.6,68,710/- ALSO NEEDS TO BE SCALED DO WN TO 25% OF THE IMPUGNED PENALTY. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE DIRECT THE ASSESSING OFFI CER TO LEVY THE PENALTY AT RS.1,67,178/- (BEING 25% OF THE PENA LTY OF RS.6,68,710/-). 9. IN THE RESULT APPEAL OF THE ASSESSSEE IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.10 .2018. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 11 TH OCTOBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER ASSTT.REGISTRAR,I.T.A.T., INDORE