ASST CIT 21(3), MUMBAI V. VINOD COOKWARE, MUMBAI

ITA 5888/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9992 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 12-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN ADD
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 251; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI PAWAN SINGH (JM) & SHRI S RIFAUR RAHMAN (AM) ITA NO. 5888/MUM/2018(ASSESSMENT YEAR : 2009-10) ACIT-2(3), ROOM NO. 209, 2 ND FLOOR, PIRAMAL CHAMBERS, LAULBAUG, MUMBAI-400012 VS M/S VINOD COOKWARE 56, EVERGREEN INDUSTRIAL ESTATE 2 ND FLOOR, SHAKTI MILLS LANE DR. E MOSES ROAD, MAHALAXMI MUMBAI 400 011 PANAACFV2197H APPELLANT RESPONDEDNT APPELLANT BY SHRI MOHAMMED RIZWAN ADD. CIT/DR RE SPONDENT BY NONE DATE OF HEARING 12-12-2019 DATE OF PRONOUNCEMENT 12-12-2019 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LEARNED CIT(A)- 33, MUMBAI DATED 06-07-2018 WHICH ARISES FROM PENAL TY LEVIED U/S 271(1)(C) OF INCOME-TAX ACT FOR ASSESSMENT YEAR 200 9-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. * CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 27 1(L)(C) OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE AS SESSEE HAD ACCEPTED THE ORDER PASSED BY THE LD. AO U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 DATED 19.03.2014 AND HAD NOT PREFERRED FIRST APPEAL AGAINST THE SAID ORDER WHEREIN SUBSTANTIVE ADDITION MADE ON ACCOUNT OF BOG US PURCHASES WAS MADE AND PENALTY U/S. 271(L)(C) WAS LEVIED.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 27 1(L)(C) OF THE INCOME TAX ACT, 1961 IGNORING THE FACT THAT THE ASSESSEE HAD F AILED TO PRODUCE THE PARTIES 2 ITA 5888/MUM/2018 M/S VINO D COOKWARE FROM WHICH THE ALLEGED BOGUS PURCHASES WERE MADE, B EFORE THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 147 OF TH E ACT AFTER GIVING SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 27 1(L)(C) OF THE INCOME TAX ACT, 1961 IGNORING THE FACT THAT THE ASSESSEE'S CAS E WAS REOPENED ON INFORMATION RECEIVED FROM THE SALES TAX AUTHORITIES THAT THE ASSESSEE HAD TAKEN BOGUS BILLS FROM CERTAIN PARTIES WITHOUT ACTU ALLY PURCHASING AND TAKING DELIVERY OF GOODS.' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 27 1(L)(C) OF THE INCOME TAX ACT, 1961 DISREGARDING THE RATIO OF JUDGMENT LAID D OWN IN THE CASE OF CIT VS. MOHD. MOHTRAN FAROOQUI, 259 ITR 132 AND K.P. MADHUS UDHAN, 251 ITR 33, RELIED UPON BY THE LD. AO.' 2. BRIEF FACTS OF THE CASE ARE THAT WHILE PASSING THE ASSESSMENT ORDER 143(3) R.W.S. 147 ON 28.02.2011 FOR ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER (AO) MADE ADDITION OF RS.33,261/- BEING 25% OF THE PURCHASES SHOWN FROM M/S GIRNAR SALES CORPORATION A ND VAISHALI ENTERPRISES AND ADDED TO THE TOTAL INCOME OF ASSESS EE. THE DISALLOWANCE WAS MADE ON THE GROUND THAT THE ASSESSEE HAS SHOWN PURCHASES FROM THE DEALERS WHOSE NAMES ARE LISTED IN THE LIST OF HAWAL A DEALERS. THE AO INITIATED PENALTY ON SUCH ADHOC DISALLOWANCES. THE NOTICE UNDER SECTION 271(1)(C) WAS ISSUED AND SERVED ON THE ASSESSEE. TH E ASSESSEE FILED ITS REPLY VIDE REPLY DATED 14.08.2014. IN THE REPLY BES IDES THE OTHER CONTENTIONS THE ASSESSEE STATED THAT NO PENALTY IS LEVIABLE ON THE ADHOC ADDITIONS OF THE PURCHASES. THE REPLY OF THE ASSESS EE WAS NOT ACCEPTED BY 3 ITA 5888/MUM/2018 M/S VINO D COOKWARE THE AO. THE AO ACCORDINGLY LEVIED PENALTY @100% OF TAX SOUGHT TO BE EVADE VIDE ORDER DATED 30-09-2014. ON APPEAL BEFOR E THE LD. CIT(A), THE PENALTY WAS DELETED ON THE GROUND THAT THE PENALTY WAS LEVIED ON ESTIMATED ADDITION. THUS AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE HAS FILED THE PRESENT APPEAL. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SER VICE OF NOTICE THROUGH REGISTERED POST WITH ACKNOWLEDGE DUE (RPAD). THEREF ORE, WE DECIDED TO HEAR THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRES ENTATIVE (DR) AND TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABL E ON RECORD. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR RELIED UPON THE OR DER OF AO. THE LD. DR SUBMITS THAT ADDITION WAS MADE BY AO ON ACCOUNT OF BOGUS PURCHASES AND ACCORDINGLY THE PENALTY WAS LEVIED TO THE EXTENT OF 100% OF TAX SOUGHT TO BE EVADED. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT IN THE RE- ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147, THE AO MADE ESTIMATED ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES SHOWN FROM TWO HAWALA PA RTIES. THE AO MADE ADDITION ON ESTIMATE BASIS. THE PENALTY WAS L EVIED BY AO ON ESTIMATED ADDITION. BEFORE LD CIT(A) THE ASSESSEE U RGED THAT THOUGH THE PURCHASES ARE GENUINE, WHICH IS EVIDENT FROM THE FA CT THAT THE ADDITIONS 4 ITA 5888/MUM/2018 M/S VINO D COOKWARE ARE BASED ON ESTIMATION ONLY. THE ESTIMATION IS BAS ED ON THE PARTICULARS FURNISHED BY THE ASSESSEE. ALL FACTS WERE CORRECTLY DISCLOSED BY THE ASSESSEE. AFTER CONSIDERING THE SUBMISSION OF THE A SSESSEE, THE LD CIT(A) CONCLUDED THE DOCUMENTS OF THE ASSESSEE WAS NEITHER EXAMINED BY AO NOR DISPROVED. THE LD. CIT(A) DELETED THE PENALTY B Y CONSIDERING THE FACT THAT NO PENALTY ORDER WAS SUSTAINABLE ON ESTIMATED ADDITION. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CI T(A). WE UPHOLD THE SAME. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12-12-2019. SD/- SD/- (S RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 12 TH DECEMBER, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI