ANWAR ABDUL HAQ QURESHI, MUMBAI V. ACIT-21(1), MUMBAI

ITA 5859/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6861 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 11-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 5859/MUM/2019 (ASSESSMENT YEAR 2008-09) I.T.A. NO. 5860/MUM/2019 (ASSESSMENT YEAR 2009-10 ) ANWAR ABDUL HAQ QURESHI ROOM NO. A-37 ANWAR CHAWL, KUTTIWADI DHARAVI, MUMBAI-400 017. PAN : AACPQ1084A VS. ACIT-21(1) PIRAMAL CHAMBERS MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI AJAY PRATAP SINGH DATE OF HEARING 31 .03.2021 DATE OF PRONOUNCEMENT 06.04.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE ASSESSEE DIRECTED AGAINST A COMMON ORDER OF LEARNED CIT-A DATED 16.7.2019, WHEREIN FOLLOWING PE NALTY LEVIED UNDER 271(1)(C) OF THE ACT HAS BEEN SUSTAINED :- ASSESSMENT YEAR AMOUNT OF PENALTY 2008-09 10,43,087/- 2009-10 9,52,177/- 2. BRIEF FACTS OF THE CASE LEADING TO THE LEVY OF P ENALTY ARE THAT THE ASSESSING OFFICER IN THESE CASES MADE DISALLOWANCE OF 3.89% Y BEING THE GROSS PROFIT RATE ON ACCOUNT OF HIS AD HOC ESTIMATE OF 20 % PURCHASES BEING BOGUS PURCHASES. THE ORDER OF THE ASSESSING OFFICER IN THIS REGARD FOR ASSESSM ENT YEAR 2008-09 MAY BE REFERRED AS UNDER :- DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE WAS ASK ED TO SUBMIT THE DETAILS SUCH P & L A/C, BALANCE SHEET AND BANK STATEMEN T FOR THE WHOLE YEAR. THE SAME WERE SUBMITTED. AFTER VERIFICATION OF THE BANK STATEMENT, IT IS FOUND THAT THERE ARE FREQUENT CASH TRANSACTION AND TRA NSFER THEREOF TO DIFFERENT ACCOUNT. FURTHER, THE ASSESSEE WAS ASKED TO SU BMIT THE DETAILS OF FREQUENT TRANSFER OF MONEY IN HIS BANK ACCOUNTS LOCAT ED IN BOMBAY, KANPUR, ANWAR ABDUL HAQ QURESHI 2 KOLKATA AND HAPUR. THE ASSESSEE SUBMITTED THE BANK STA TEMENTS OF VARIOUS ACCOUNTS IN THESE CITIES. FROM THE COPY OF THE BANK ACCOUNT, THE RECEIPTS ON ACCOUNT OF EXPORTS WERE VERIFIED AND TURNOVER WAS ASC ERTAINED. THE ASSESSEE SUBMITTED THAT THEY TRANSFER MONEY TO THEIR BANK ACCOUN T LOCATED IN KANPUR, KOLKATA, ETC. WERE MADE TO FINANCE THE PURCHASES OF RA W MEAT FOR ONWARD TRANSPORTATION TO BOMBAY AND EXPORT THEREAFTER. THE ASS ESSEE WAS ASKED TO SUBMIT THE PURCHASE BILLS AND OTHER SUPPORTING DOCUMEN TS SUCH AS ADDRESS, PAN , NAME OF THE PARTIES FROM WHOM THE PURCHASES WERE MADE BEFORE THE UNDERSIGNED FOR VERIFICATION. IN RESPONSE TO THE SAME , THE AR SUBMITTED A LIST OF PERSON FROM WHOM THE PURCHASES WERE MADE WITH SIGN ATURE AND THUMBS IMPRESSION. A MATCHING OF THE SIGNATURE WAS PERFORMED TO ASCERTAIN THE GENUINENESS OF THE PARTIES, HOWEVER, THE SAME COULD NOT BE DONE BECAUSE OF INCOMPLETENESS OF DATA SUBMITTED BY THE ASSESSEE. THE AR EXPRESSED INABILITY TO PROVE THE GENUINENESS OF THE PURCHASES OR TO PRODUCE THE PARTIES BEFORE THE UNDERSIGNED FOR VERIFICATION. THE AR HAS N OT DISCHARGED THE ONUS THAT LIES UPON HIM TO JUSTIFY HIS CLAIM. IN ORDER TO SAF EGUARD THE INTEREST OF REVENUE AS MUCH AS 20% OF THE PURCHASES IS TREATED AS BOGUS AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AT THE GROSS PRO FIT MARGIN FOR THE YEAR WHICH IS 3.89%. RECEIPTS(1) TURNOVER(2) 20% DIFFERENCE OF RECEIPTS AND TURNOVER(3) 3. 89% OF COL. 3 48,05,87,697 26,54,77,785 4,30,21,982 16,73,555 WITH THE DISCUSSION IN ABOVE PARA, THE TOTAL ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE IS RS.16,73,555/- AND THE SAME IS AD DED BACK TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDING U/S 271( L)(C) OF THE IT ACT IS INITIATED SEPARATELY FOR CONCEALMENT OF INCOME. [ADD ITION:RS.L6,73,555/-]. 3. UPON THE AFORESAID ADDITION PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT HAS BEEN LEVIED AND CONFIRMED BY LEARNED CIT(A). 4. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEALS B EFORE US. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 6. UPON CAREFUL CONSIDERATION WE NOTE THAT ASSESSEE HAS SUPPLIED THE PURCHASE VOUCHERS AND ALL THE RELEVANT DETAILS. HOW EVER DRAWING ADVERSE INFERENCE FOR THE NONPRODUCTION OF THE SUPPLIERS TH E ASSESSING OFFICER TREATED 20% OF THE PURCHASE AS BOGUS OF THE BOGUS PURCHASES . NO CASE HAS BEEN MADE OUT THAT HE HAS ISSUED ANY NOTICE HIMSELF TO THE AL LEGED BOGUS SUPPLIER. THE ANWAR ABDUL HAQ QURESHI 3 ASSESSING OFFICER HAS NOT BOTHERED TO POINT OF THE SPECIFIC DEFICIENCIES AND THE QUANTUM OF PURCHASE VOUCHERS INVOLVED IN THIS REGAR D. UPON THE SAID 20% ADHOC BOGUS PURCHASE HE HAS DISALLOWED GROSS PROFIT RATIO OF 3.89%. HOWEVER THE ASSESSING OFFICER DID NOT DOUBT THE SALES. THE LEARNED CIT-A CONFIRMED THE ADDITION. PENALTY UNDER SECTION 271(1)(C) OF THE AC T WAS ALSO LEVIED. 7. AS CLEAR FROM THE FACTS RECORDED ABOVE THE DISAL LOWANCE HAS BEEN MADE ON AN ESTIMATED BASIS ON ACCOUNT OF THE NONPRODUCTI ON OF SUPPLIERS BEFORE THE ASSESSING OFFICER. THE PURCHASE VOUCHERS WERE DULY PRODUCED. NO NOTICE TO THE ALLEGED BOGUS SUPPLIER HAS BEEN ISSUED BY THE ASSES SING OFFICER. IN THESE BACKGROUNDS IN OUR CONSIDERED OPINION ASSESSEE CANN OT BE VISITED WITH THE REGOURS OF PENALTY UNDER SECTION 271(1)(C) OF THE A CT. AS A MATTER OF FACT ON MANY OCCASIONS ON SIMILAR CIRCUMSTANCES IN QUANTUM PROCEEDINGS THE DISALLOWANCE ITSELF HAS BEEN DELETED, ON THE TOUCHS TONE OF HONOURABLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF N IKUNJ EXIMP ENTERPRISES PVT. LTD. (372 ITR 619). IN OUR CONSIDERED OPINION ON TH E FACTS AND CIRCUMSTANCES OF THE CASE ASSESSEE CANNOT BE SAID TO HAVE BEEN GU ILTY OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THIS REGARD WE DRAW SUPPORT FROM THE DECISION OF A LARGER BENCH OF THE HONOURAB LE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA ( 83 ITR 26), WHERE IN IT WAS HELD THAT THE AUTHORITY MAY NO T LEVY THE PENALTY I F THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. 8. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PR ECEDENT WE SET ASIDE THE ORDER'S OF LD CITA AND DELETE THE LEVY OF PENAL TY. 9. IN THE RESULT, BOTH ASSESSEES APPEALS ARE ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 6.4.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 06/04/2021 ANWAR ABDUL HAQ QURESHI 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI