DCIT CIRCLE 5(2)(1), Mumbai V. M/S JMS INTERIORS PVT. LTD., Mumbai

ITA 572/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4174 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MULLAMUDI LD
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 133(6)

Judgement Text

ITA NO.572/MUM/2019 M/S. JMS INTERIORS PRIVATE LIMITED ASSESSMENT YEAR :2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI MANOJ KUMAR AGGARWAL, AM AND HONBLE SHRI RAVISH SOOD, JM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.572/MUM/2019 ( / ASSESSMENT YEAR : 2009-10) D CIT - CIRCLE - 5 (2)( 1 ) ROOM NO.525, AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 / VS. M/S. JMS INTERIORS P RIVATE LTD. 31, NAVYUG, BLDG. NO.02 FORJET HILL ROAD TARDEO, MUMBAI-400 051. )* ./ ./ PAN/GIR NO. AAACJ-7307-C ( *, /APPELLANT ) : ( -.*, / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : MS. SAMATHA MULLAMUDI - LD.SR. DR / DATE OF HEARING : 29/10/2020 / DATE OF PRONOUNCEMENT : 29/10/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-10, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-10/DC-5(2)91)/426/2015-16 DATED 30/10/2018 O N FOLLOWING GROUNDS: - ITA NO.572/MUM/2019 M/S. JMS INTERIORS PRIVATE LIMITED ASSESSMENT YEAR :2009-10 2 ''WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF T HE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE PENALTY LEVIED ON DISALLOWANC E MADE ON ACCOUNT OF BOGUS PURCHASES WITHOUT APPRECIATING THAT THE ASSESSEE HAS FAILED TO ESTABLISH GENUINENESS OF THE PURCHASES ESPECIALLY WHEN NOTICE U/S 133(6) ISSUED BY THE A.O. WAS RECEIVED UN-SERVED AND THEREFORE IT IS CLEAR CASE O F FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(L)(C ) OF THE LT ACT 1961.' AS EVIDENT, THE REVENUE IS AGGRIEVED BY THE DELETIO N OF PENALTY OF RS.1,82,348/- AS LEVIED BY LD. ASSESSING OFFICER [A O] U/S. 271(1)(C) VIDE ORDER DATED 23/09/2015. ALTHOUGH NONE APPEARED FOR ASSESSEE DURING HEARING BEFORE US, HOWEVER, THE MATERIAL ON RECORD IS QUITE SUFFICIENT TO DISPOSE-OFF THE APPEAL AND THEREFORE, WE PROCEED TO ADJUDICATE THE SAME AFTER HEARING LD. SR. DR. WHO PLEADED FOR CONFIRMAT ION OF PENALTY AS LEVIED BY THE LD. AO. 2. FACTS ON RECORD WOULD REVEAL THAT AN ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE FOR THE YEAR UNDER CONSIDERATI ON ON 27/03/2015 U/S. 143(3) R.W.S. 147 R.W.S. 254 WHEREIN THE ASSES SEE WAS SADDLED WITH ESTIMATED ADDITION OF RS.5.52 LACS U/S. 69C, BEING 12.5% OF CERTAIN SUSPICIOUS PURCHASES STATED TO BE MADE BY THE ASSES SEE FROM TWO ENTITIES. THESE ENTITIES WERE LISTED AS SUSPICIOUS DEALERS BY SALES TAX DEPARTMENT, MAHARASHTRA. NOTICES ISSUED U/S. 133(6) TO CONFIRM THE TRANSACTIONS ELICITED NO RESPONSE. ALTHOUGH, IN SUP PORT OF PURCHASE TRANSACTIONS, THE ASSESSEE FILED VARIOUS DOCUMENTAR Y EVIDENCES LIKE PURCHASE BILLS ETC. AND SUBMITTED THAT THE PAYMENT TO SUPPLIERS WERE THROUGH BANKING CHANNELS, HOWEVER, THE SUBMISSIONS COULD NOT FIND FAVOR WITH LD. AO WHO ESTIMATED ADDITIONS OF 12.5% AGAINS T THESE PURCHASES. THE ASSESSEE HAS NOT CONTESTED THE QUANTUM ADDITION S ANY FURTHER. ITA NO.572/MUM/2019 M/S. JMS INTERIORS PRIVATE LIMITED ASSESSMENT YEAR :2009-10 3 3. CONSEQUENTLY, PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED AGAINST THE ASSESSEE FOR FURNISHING INACCURATE PART ICULARS OF INCOME AND ULTIMATELY THE ASSESSEE WAS SADDLED WITH A PENALTY OF RS.1,82,348/- VIDE ORDER DATED 23/09/2019. UPON FURTHER APPEAL, LD. CI T(A) DELETED THE SAME BY OBSERVING THAT THE ASSESSEE OFFERED EXPLANA TION WHICH WAS NOT ACCEPTED BY LD. AO. HOWEVER, THERE MUST BE SOME COR ROBORATIVE MATERIAL TO SHOW THAT THE ASSESSEE HAD FILED INACCU RATE PARTICULARS OF INCOME. THE ASSESSEE WAS IN POSSESSION OF VITAL EVI DENCE TO PRIMA-FACIE SUBSTANTIATE THE PURCHASE TRANSACTIONS. THE ASSESSE E OFFERED EXPLANATION WHICH WAS BONA-FIDE AND COUPLED WITH DO CUMENTARY EVIDENCES. THEREFORE EXCEPT FOR REJECTION OF EXPLAN ATION FURNISHED BY ASSESSEE, THERE WAS NO MATERIAL TO SUBSTANTIATE THE FACT OF CONCEALMENT OF INCOME. FURTHER THE ADDITIONS WERE MADE PURELY O N ESTIMATED BASIS. IN THE SAID BACKGROUND, IT WAS HELD THAT PENALTY WAS U NCALLED FOR. AGGRIEVED REVENUE IS IN FURTHER APPEAL BEFORE US. 4. UPON CAREFUL CONSIDERATION, WE FIND THAT THE IMP UGNED ORDER WOULD NOT REQUIRE ANY INTERFERENCE ON OUR PART FOR TWO RE ASONS. FIRSTLY, WE CONCUR WITH THE PROPOSITION THAT NO PENALTY COULD B E LEVIED FOR CONCEALMENT OF INCOME WHEREIN THE ADDITIONS WERE ME RELY ESTIMATED ADDITION. SECONDLY, THE QUANTUM OF PENALTY BEING DI SPUTED BY THE REVENUE IS BELOW THRESHOLD LIMIT OF RS.50 LACS AND THEREFORE, THE APPEAL IN NOT MAINTAINABLE IN TERMS OF LATEST LOW TAX EFFE CT CIRCULAR NO. 17/2019 DATED 08/08/2019 [F.NO.279/MISC. 142/2007-TTJ(PT.) ISSUED BY CBDT. THIS RECENT CIRCULAR FURTHER ENHANCES THE MONETARY LIMIT FIXED IN EARLIER CIRCULAR NO.3 OF 2018 DATED 11/07/2018 ISSUED BY CB DT AS AMENDED ON ITA NO.572/MUM/2019 M/S. JMS INTERIORS PRIVATE LIMITED ASSESSMENT YEAR :2009-10 4 20/08/2018. THUS, VIEWING FROM ANY ANGLE, THE REVEN UES APPEAL STANDS DISMISSED. 5. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2020. SD/- SD/- (RAVISH SOOD) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 29/10/2020 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -.*, / THE RESPONDENT 3. 5 ( ) / THE CIT(A) 4. 5 / CIT CONCERNED 5. 67-08 , 8 , / DR, ITAT, MUMBAI 6. 79:; / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.