ACIT CIRCLE-2(1)(1), Mumbai V. M/S ASTEE LIFESCIENCE LTD., Mumbai

ITA 5682/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 03-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD K BHASKARAN
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH MUMBAI BEFORE : SHRI VIKAS AWASTHY, JM & SHRI M.BALAGANESH, AM ITA NO. 5682 /MUM/ 20 19 ( ASSESSMENT YEAR : 2011 - 1 2 ) ACIT, CIRCLE - 2(1)(1) MUMBAI, ROOM NO.561, 5 TH FLOOR AAYAKAR BHAVAN M.K. R OAD, MUMBAI 400 020 VS. M/S. ASTEE LIFESCIENCE LTD., 3 RD FLOOR, GODREJ ONE EASTERN EXPRESS HIGHWAY PIROJSHA NAGAR VIKHROLI (E) MUMBAI 400 709 PAN/GIR NO. AAACA4832D (APPELLANT ) .. (RESPONDENT ) CO NO.24/MUM/2021 (ARISING OUT OF ITA NO. 5682 /MUM/ 2019) ( ASSESSMENT YEAR : 2011 - 12 ) ACIT, CIRCLE - 2(1)(1) MUMBAI, ROOM NO.561, 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400 020 VS. M/S. ASTEE LIFESCIENCE LTD., 3 RD FLOOR, GODREJ ONE EASTERN EXPRESS HIGHWAY PIROJSHA NAGAR VIKHROLI (E) MUMBAI 400 709 PAN/GIR NO. AAACA4832D (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI VINOD K BHASKARAN ASSESSEE BY SHRI AKRAM KHAN DATE OF HEARING 15 / 03 /202 1 DATE OF PRONOUNCEMENT 19 / 03 /202 1 ITA NO . 5682/MUM/2019 & CO NO.24/MUM/2021 M/S. ASTEE LIFESCIENCE LTD., 2 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5682/MUM/2019 & CO NO.24/MUM/2021 FOR A.Y. 2011 - 12 ARISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 4, MUMBAI IN APPEAL NO. CIT(A) - 4/E - FILE - 17/JCIT (OSD) - 2(1)91)/2018 - 1 9 DATED 10/06/2019 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 2. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS ENGAGED IN MANUFACTURING OF W IDE RANGE OF AGRO CHEMICALS AND PHARMACEUTICALS INTERMEDIARIES. THE RETURN OF INCOME FOR THE A.Y.2011 - 12 WAS FILED BY THE ASSESSEE DECLARING BUSINESS LOSS OF RS.1,76,80,439/ - UNDER NORMAL PROVISIONS OF THE ACT AND BO OK PROFIT OF RS.6,92,77,918/ - U/S.11 5JB OF THE ACT. WE FIND THAT ASSESSEE HAD MADE CERTAIN PURCHASES OF RAW MATERIALS ( CHEMICALS ) AMOUNTING TO RS.3,08,77,082/ - FROM KOTSON S IMPEX PVT. LTD., AND HAD MADE CORRESPONDING SALES THEREON TO SAI L EELA TRADING PVT. LTD., TO THE TUNE OF RS.3,09,00,626/ - . THE ASSESSEE FURNISHED THE COPY OF INVOICES FOR THESE TRANSACTIONS BEFORE THE LD. AO TOGETHER WITH THE RELEVANT BANK STATEMENTS EVIDENCING PAYMENTS MADE THEREON AND AMOUNTS RECEIVED THEREO N . THE ASSESSEE ALSO FILED AN INDEMNITY BOND FOR TRANSACTIONS UNDE RTAKEN WITH KOTSON S IMPEX PVT. LTD., AND SAI L EELA TRADING PVT. LTD., CONFIRMING THAT RAW MATERIALS PURCHASED FROM KOTSON S IMPEX PVT. LTD., ON CONSIGNMENT BASIS WERE DIRECTLY DELIVERED TO SAI L EELA TRADING PVT. LTD., AND THUS, NO PHYSICAL DELIVERY OF GOODS W AS TAKEN BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THOUGH THE ONLY PROFIT EARNED IN THESE TRANSACTIONS WAS RS.23,544/ - ( RS. 3,09,00,626/ - - RS. 3,08,77,082/ - ), ITA NO . 5682/MUM/2019 & CO NO.24/MUM/2021 M/S. ASTEE LIFESCIENCE LTD., 3 HOWEVER, IN ORDER TO PURCHASE PEACE, THE ASSESSEE CA ME FORWARD TO OFFER 5% AS ITS PROFIT MARGIN IN THESE TRANSACTIONS AND ACCORDINGLY, VIDE LETTER DATED 03/02/2014 FILED BEFORE THE LD. AO , OFFERED A SUM OF RS.15,45,000/ - TO BE BROUGHT TO TAX AS PROFIT EMBEDDED IN THESE TRANSACTIONS. THIS SUM WAS ACCORDINGLY TAXED BY THE LD. AO. NO APPEAL AGAINST THE QUANTUM PROCEEDINGS WAS PREFERRED BY THE ASSESSEE. SUBSEQUENTLY, THE LD. AO LEVIED PENALTY U/S.271(1)(C) ON THIS TAXED SUM. WE FIND THAT THE LD. CIT(A) HAD CATEGORICALLY GIVEN A FINDING IN PARA 6.12 OF HIS ORDER THAT THE ADDITION HAD BEEN ULTIMATELY MADE ONLY ON AN ESTIMATED BASIS B Y PLACING RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AERO TRADERS PVT. LTD., IN ITA NO.1097/2009 DATED 25/01/2010; ON THE DECISION OF THE HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF CIT VS . VIJAYKUMAR JAIN DATED 19/04/2010; DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SUBHASH TRADING CO., REPORTED IN 221 ITR 110; DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. HARIGOPAL SINGH REPORTED IN 255 ITR 85; AND THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. MAHENDRA SINGH KHEDLA IN ITA NO.174/2010, THE LD. CIT(A) HELD THAT NO PENALTY U/S.271(1)(C) OF THE ACT COULD BE LEVIED ON AN ESTIMATED ADDITION AND ACCORDINGLY, DELETED THE PENALTY. W E DO NOT FIND ANY INFIRMITY IN THE SAID ORDER OF THE LD. CIT(A) DELETING THE PENALTY ON AN ESTIMATED ADDITION. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 4. WE FIND THAT ASSESSEE H AS ALSO PREFERRED CROSS OBJECTIONS BEFORE US ON THE GROUND THAT THE SHOW - CAUSE NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) OF THE ACT DID NOT MENTION WHETHER THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF ITA NO . 5682/MUM/2019 & CO NO.24/MUM/2021 M/S. ASTEE LIFESCIENCE LTD., 4 INCOME. WE ALSO FIND THAT YET ANOTHER GROUND RAISED IN THE CROSS OBJECTIONS OF THE ASSESSEE IS THAT NO PENALTY U/S.271(1)(C) OF THE ACT COULD BE LEVIED WHERE THE INCOME IS ASSESSED TO TAX U/S.115JB OF THE ACT. SINCE, WE HAVE ALREADY DISMISSED THE APPEAL OF THE RE VENUE HEREINABOVE, WE DO NOT DEEM IT FIT TO GET INTO OTHER GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTIONS AS THEY WOULD BE PURELY ACADEMIC IN NATURE. ACCORDINGLY, THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 1 9 / 03 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( VIKAS AWASTHY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 19 / 03 / 2021 KARUNA , SR.PS ITA NO . 5682/MUM/2019 & CO NO.24/MUM/2021 M/S. ASTEE LIFESCIENCE LTD., 5 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. GUA RD FILE. //TRUE COPY//