ITO-5(2)(4), MUMBAI V. M/S. PACIFIC FERROMATE PVT. LTD., MUMBAI

ITA 585/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1735 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHREEKALA PARDESH
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , C BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI RAVISH SOOD , JM ITA NO. 585 /MUM/ 20 19 ( ASSESSMENT YEAR : 2010 - 11 ) INCOME TAX OFFICER 5(2)(4) MUMBAI R.NO.566, AAYAKAR BHAVAN M.K.ROAD, MUMBAI 400 020 VS. M/S. PACIFIC FERROMATE PVT. LTD., 61, 1 ST FLOOR 74, PATRAWALA CHAWL 5 TH KUMBHARWADA LANE MARUTI MANDIR MARG MUMBAI 400 004 PAN/GIR NO. AADCP6164G (APPELLANT ) .. (RESPONDENT ) REVENUE BY MS. SHREEKALA PARDESH REVENUE BY NONE DATE OF HEARING 08 / 12 /2020 DATE OF PRONOUNCEMENT 10 / 12 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 585/MUM/2019 FOR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) - 10, MUMBAI IN APPEAL NO. CIT(A) - 10/IT - 5(2)(4)/348/2015 - 16 & CIT(A)10/IT - 5(2)(4)/349/2015 - 16 DATED 25/10/2018 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO . 585/MUM/2019 M/S. PACIFIC PARROMATE P. LTD., 2 2. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF THE REVENUE IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT IN RESPECT OF ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE ON AN ESTIMATED BASIS. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE NOTICE ISSUED TO THE ASSESSEE HAD RETURNED UNSERVED. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT ASSESSEE HAD MADE PURCHASES FROM TWO PARTIES TOTALLING TO RS.28,09,166/ - WHOSE NAME APPEAR ED IN THEIR LIST OF TAINTED PARTIES IN THE WEBSITE OF SALES TAX DEPARTMENT OF GOVERNMENT OF MAHARASHTRA. ACCORDINGLY, THE LD. AO HAD PROCEEDED TO TAX THE PROFIT PERCENTAGE EMBEDDED IN SUCH BOGUS PURCHASES AND MADE AN ADDITION IN THE ASSESSMENT. THIS ASSESSMENT WAS AC CEPTED BY THE ASSESSEE. LATER, THE PENALTY WAS LEVIED ON THE SAID ESTIMATED ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES BY THE LD. AO TO TUNE OF RS.38,000/ - . WE FIND THAT THE LD. CIT(A) HAD DELETED THE SAID PENALTY ON THE GROUND THAT ULTIMATELY, THE ADDITI ON PER SE HAS BEEN MADE ONLY ON AN ESTIMATED BASIS AND NO PENALTY COULD SURVIVE ON AN ESTIMATED ADDITION. THE LD. CIT(A) HAD PLACED RELIANCE ON VARIOUS DECISIONS IN SUPPORT OF HIS CONTENTIONS IN HIS APPELLATE ORDER INCLUDING THE DECISION OF THIS TRIBUNAL I N THE CASE OF DEEPAK GOGRI VS. ITO IN ITA NO.1396/MUM/2017 DATED 23/11/2017. WE FIND ULTIMATELY PENALTY HAS BEEN LEVIED ON AN ADDITION MADE ON AN ESTIMATED BASIS , WHICH IN OUR CONSIDERED OPINION , WILL HAVE NO LEGS TO STAND EVEN IF THE QUANTUM IS NOT CONTES TED BY ASSESSEE IN FURTHER APPEAL. HENCE, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY DELETED THE PENALTY IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, ACCORDINGLY, WE DO NOT DEEM FIT TO INTERFERE IN THE SAID ORDER. ITA NO . 585/MUM/2019 M/S. PACIFIC PARROMATE P. LTD., 3 4. IN THE RESULT, APPEAL OF THE REVEN UE IS DISMISSED. ORDER PRONOUNCED ON 10 / 12 /2020 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( RAVISH SOOD ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 10 / 12 / 2020 KARUNA , SR.PS 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. GUARD FILE. //TRUE COPY//