SHRI RAJKUMAR NAIR , MUMBAI V. INCOME TAX OFFICER CIRCLE26(2) (5), MUMBAI, MUMBAI

ITA 5963/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1338 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 18-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Revised return; Set aside
• Section: 142(1); 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VP AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5963 /MUM/20 1 9 ( / ASSESSMENT YEAR: 2009 - 10 ) RAJKUMAR NAIR D - 603, 6 TH FLOOR, PRASHANT APARTMENT, OPP. IIT MAIN GATE, POWAI, MUMBAI - 400076 . / VS. ITO, CIRCLE - 26(2)(5) ROOM NO.605, 6 TH FLOOR, C - 12, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI - 400051. ./ ./ PAN/GIR NO. : ADBPN6080F ( / APPELLA NT ) .. ( / RESPONDENT ) / DATE OF HEARING : 24 /0 6 /202 1 / DATE OF PRONOUNCEMENT : 30 /0 6 /202 1 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 31 . 0 1 .201 9 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 8 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2009 - 10 WHERE IN THE PENALTY LEVIED BY THE AO HAS BEEN ORDERED TO BE CONFIRMED . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NOT MENTIONING IN THE PENALTY SHOW CAUSE NOTICE AS TO WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF ASSESSEE BY : SHRI DEVDA TTA MAINKAR REVENUE BY: SHRI BHARAT ANDHLE ( SR. A R ) ITA. NO.5963 /M/201 9 A.Y. 20 09 - 10 2 FURNISHING INACCURATE PARTICULARS OF INCOME. THE APPELLANT PRAYS THAT THE IMPUGNED PENALTY ORDER IS B AD IN LAW AND SHOULD BE QUASHED. 2. WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ALSO IN LAW, THE LD CIT(A) ERRED IN CONFIRMING PENALTY LEVIED AMOUNTING TO RS.1,70,025/ - WITHOUT APPRECIATING THAT THE APPELLA NT HAD NEITHER CONCEALED PARTICULARS OF INCOME OR FURNISHED PARTICULARS OF INCOME . ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 01 . 10 .20 09 DECLARING TOTAL I N COME TO THE TUNE OF RS.9,46,130/ - . THE RETUNE WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE ASSESSMENT WAS REOPENED ON THE BASIS OF THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT IN WHICH IT WAS CONVEYED THAT THE ASSESSEE HAS TAKEN THE BOGUS PURCHASE ENTRY IN SUM OF RS. 9,360 FROM M/S. PARSHWA & CO. N OTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED BUT THE SAME WAS RECEIVED UN - SERVED. AFTER THE REPLY OF THE A SSESSEE, THE AO RAISED THE ADDITION @ 25% OF THE BOGUS PURCHASE TO THE TUNE OF RS.9,360/ - I.E. TO THE TUNE OF RS.2,340/ - AND WAS ADDED TO THE INC OME OF THE ASSESSE E. IT WAS ALSO CAME INTO NOTICE THAT THE ASSESSEE DEPOSITED THE VAT A SUM OF RS.1,29,456/ - IN CASH. NO EXPLANATION WAS GIVEN, THEREFORE, THE SAME WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.15,78,140/ - . THE PENALTY PROC E EDING WAS INITIATED . NOTICE WAS GIVEN AND AFTER THE REPLY OF THE ASSESSEE, THE PE NALTY TO THE TUNE OF RS1,70,025/ - WAS LEVIED. FEELING AGGRIEVED, THE ASSESSEE AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE PEN ALTY , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ITA. NO.5963 /M/201 9 A.Y. 20 09 - 10 3 4 . WE HAVE HEARD THE ARGUMENT S ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE PENALTY WAS LEVIED ON ACCOUNT OF ADDITION @ 25% OF THE BOGUS PURCHASE. THE ASSESSMENT WAS COMPLETED DETERMINING THE INCOME ON ESTIMATING THE PROFIT . NO PENALTY IS LEVIABLE WHERE THE INCOME HAS BEEN DETERMINED ON THE BASIS OF ESTIMATION. I N THIS REGARD WE ALSO FIND SUPPORT OF THE DECISION OF HO N BLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES VS. CIT 2001 164 CTR 2009 (GUJ) . ACCORDINGLY, THE PENALTY IS NOT LIABLE TO BE SUSTAINABLE. THE OTHER REASON TO LEVY THE PENALTY IS IN CONNECTION WITH THE DEPOSIT OF VAT IN CASH. THIS FACT HAS ALSO BEEN DISCLOSED IN THE RETURN OF INCOME . THERE IS NO CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INC OME. MOREOVER, THE ASSESSEE FILED THE REVISED RETURN OF INCOME DISCLOSING THE EACH AND EVERY FACT ON RECORD. IT IS NOT A CASE OF CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, WE ARE OF THE VIEW THAT THE PENALTY IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND DELETE THE PENALTY. 5 . IN THE RESULT, THE APPEAL FILED BY THE A SSESSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 /06 /202 1 SD/ - SD/ - ( PRAMOD KUMAR ) (AMARJIT SINGH) / VICE PRESIDENT /JUDICIAL MEMBER MUMBAI; DATED : 30 /06 /202 1 V IJAY PAL SINGH (SR. PS) ITA. NO.5963 /M/201 9 A.Y. 20 09 - 10 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDE NT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI