SHRI KALANIYOJAN & ASSOCIATES, MUMBAI V. ACIT-16(2), MUMBAI

ITA 5762/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7669 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 11-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS RUCHE RATHOD
• Keywords: Bogus purchase; Difference of opinion; Reassessment proceedings
• Section: 271(1)(c); 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH , MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER . / ITA NO S . 5762 /MUM/201 7 ( / ASSESSMENT YEAR S : 20 11 - 2012 ) SHRI KALANIYOJAN & ASSOCIATES, OFFICE NO.125/126, 1 ST FLOOR, SWASTIK DISHA CORPORATE PARK, LBS MARG, GHATKOPAR (WEST), MUMBAI VS. ACIT - 16(2), MUMBAI ./ PAN NO. : A A J FK 0868 K ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : MRS. RUCHE RATHOD, AR /REVENUE BY : SHRI MANOJ KUMAR SINGH , CIT DR / DATE OF HEARING : 0 2 / 01 /201 9 / DATE OF PRONOUNCEMENT 09 / 01 /201 9 / O R D E R PER SHRI RA JESH KUMAR , A M : TH IS APPEAL BY THE ASSESSEE ARISE S OUT OF THE ORDER OF THE CIT(A) 6 , MUMBAI, DATED 22.06.2017 , WHICH IN TURN HAS ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) RELATING TO A.Y. 20 1 1 - 2012 . 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS TH A T THE CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT BY THE AO. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE DURING THE YEA R HAS FILED ITS RETURN OF INCOME ON 30.09.2011 DISCLOSING TOTAL INCOME AT RS.51,99,480/ - , WHICH WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE AO , AFTER RECORDING REASONS , REOPENED THE CASE OF THE ASSESSEE UPON BY ISSUING NOTICE U/S.148 OF THE ACT . ACCORDINGLY, THE AO COMPLETED THE ITA NO . 5762 /17 2 REASSESSMENT PROCEEDINGS U/S.143(3) R.W.S.147 OF THE ACT VIDE ORDER DATED 20.03.2015 DETERMINING TOTAL INCOME AT RS.54,90,888/ - BY MAKING ADDITION @12.7% OF THE BOGUS PURCHASES. THEREAFTER PENALTY PROCEEDINGS WERE INITIA TED U/S.271(1)(C) OF THE ACT ON THE GROUND OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND FINALLY IMPOSED PENALTY OF RS.1,00,000/ - ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME VIDE ORDER DATED 23.09.2015 PASSED U/S.271( 1)(C) OF THE ACT. 4 . BEING AGGRIEVED WITH THE PENALTY ORDER , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT BY THE AO BY OBSERVING THAT ASSESSEE HAS NOT ONLY FILED INACCURATE PARTICULARS OF IN COME BUT ALSO CONCEALED THE INCOME, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL . 5 . LD. A R BEFORE US SUBMITTED THAT THE PENALTY IN THE PRESENT CASE HAS BEEN MADE ON THE ADDITION TOWARDS SUPPRESSED PROFIT TO THE TUNE OF RS. 2,91,408 / - WHICH WAS CALCULATED ON THE ESTIMATED BASIS BY THE AO BY APPLYING 12.7% ON BOGUS PURCHASE OF RS. 22,94,552/ - AND THUS, THE LD. AR ARGUED THAT SINCE THIS IS A CASE OF ESTIMATION OF INCOME BY THE AO AND PENALTY IS NOT EXIGIBLE IN SUCH A SCENARIO. LD. AR IN SUPPORT OF HIS SUBMISSION RELIED ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI HITESH S. SHAH VS. ITO, ITA NO.3423/MUM/2017, FOR THE ASSESSMENT YEAR 2009 - 2010, ORDER DATED 19.09.2018 AND IN THE CASE OF SHRI DEEPAK GOGRI VS. ITO , IN ITA NO.1396/MUM/2017, FOR THE ASSESSMENT YEAR 2011 - 2012, ORDER DATED 23.11.2017, WHEREIN THE SIMILAR ITA NO . 5762 /17 3 ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE S BY HOLDING THAT NO PENALTY IS LEVIABLE IN THE CASE OF ESTIMATION OF INCOME BY THE AO. 6 . LD. D R, ON THE OTHER HAND, RELIED ON THE GROUNDS OF APPEAL AND THE ORDERS OF AUTHORITIES BELOW. 7 . AFTER HEARING THE IMPUGNED ORDER AND ARGUMENTS ADVANCED BY BOTH THE PARTIES, WE ARE OF THE VIEW THAT IN THIS CASE THE PENALTY HAS BEEN LEVIED ON THE ADDITION WHICH WAS MADE BY THE AO BY ESTIMATING THE GP ON THE BOGUS PURCHASE S OF RS. 22,94,552/ - @12.7% AND, THUS, MADE ADDITION TO THE TUNE OF RS.2,91,408/ - . WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE THAT NO PENALTY CAN BE IMPOSED IN CASE OF THE ESTIMATION OF INCOME BY THE AO. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISIONS REFERRED TO ABOVE IN THE CASE OF SHRI HITESH S. SHAH (SUPRA) AND SHRI DEEPAK GOGRI (SUPRA) , WHEREIN THE COORDINATE BENCH ES OF THE TRIBUNAL HA VE HELD THAT NO PENALTY CAN BE LEVIED IN THE CASE OF ESTIMATION OF INCOME AS THIS IS A CASE OF DIFFERENCE OF OPINION. WE ,THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH ES OF THE TRIBUNAL IN THE ABOVE CASES, SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELETE THE PENALT Y SO LEVIED. ACCORDINGLY, WE ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 / 01 /201 9 . SD/ - ( RAM LAL NEGI ) S D/ - (RAJESH KUMAR) / JUDICIAL MEMBE R / ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 01 /201 9 . . / PRAKASH KUMAR MISHRA , S R.PS. ITA NO . 5762 /17 4 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSISTANT REGISTRAR ) , / ITAT, MUMBAI 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), MUMBAI 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//