ITO-31(1)(4), MUMBAI V. M/S. FANCY WEAR, MUMBAI

ITA 603/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2635 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MULLAMUDI
• Assessee Lawyers: MRS BINDU SHAH
• Keywords: Bogus purchase; Tax effect
• Section: 271(1)(c); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI BEFORE SHRI C.N. PRASAD , HONBLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , HONBLE ACCOUNTANT MEMBER ITA NO S . 603 & 604/ MUM/201 9 ( A.Y S : 2010 - 11 & 2011 - 12) INCOME TAX OFFICER 31(1)(4) R.NO. 305D, C - 13, 3 RD FLOOR BANDRA KURLA COMPLEX BANDRA (E), MUMBAI - 400 051 V. M/S. FANCY WEAR 12, MEGH, 12 TH F LOOR FILM CITY ROAD , GOREGAON (E) MUMBAI - 400063 PAN: AACFF0727F (APPELLANT) (RESPONDENT) ASSESSEE BY : MRS BINDU SHAH DEPARTMENT BY : MS SAMATHA MULLAMUDI DATE OF HEARING : 25.02.2020 DATE OF PRONOUNCEMENT : 25.02.2020 O R D E R PER BENCH THESE APPEALS ARE FILED BY THE R EVENUE AGAINST COMMON O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 42 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 30.10.2018 FOR THE A . Y . 2010 - 11 AND A.Y. 2011 - 12 IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT . 2 ITA NOS. 603 & 604/MUM/2019 M/S. FANCY WEAR 2. THE REVENUE IN ITS APPEAL S HAS RAISED FOLLOWING COMMON GROUNDS : ' 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS CORRECT IN HOLDING THAT THE ADDITION WAS MADE PURELY ON ESTIMATE BASIS IGNORING THE FACT THAT THE ASSESSEE HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AS THE ASSESSEE FAILED TO RECONCILE THE PURCHASES AND NO GENUINE EXPLANATION WAS OFFERED FOR FAILURE.' 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN IGNORING THE FACT THAT IT WAS STATUTORY DUTY OF THE ASSESSEE TO DECLARE ITS TRUE INCOME, ON THE CONTRARY, THE ASSESSEE INFLATED PURCHASES WITH THE MALAFIDE INTENTION TO REDUCE THE TAX LIABILITY. 3. AT THE TIME OF HEARING, LD. AR SUBMITTED THAT TAX EFFECT ON THE ISSUE IN THE PRESENT APPEAL S IS BELOW .5 0 LAC S AND IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019 IN F.NO.279/MISC.142/2007 - ITJ (PT) , THE APPEAL S OF THE REVENUE ARE NOT MAINTAINABLE . 4. ON THE OTHER HAND, LD. DR SUBMITTED THAT TH ESE APPEAL S ARE FILED AGAINST DELETION OF PENALTY OF . 42,47,010 / - AND . 37,09,657 / - LEVIED U/S. 271(1)(C) OF THE ACT ON THE DISALLOWANCE MADE TOWARDS BOGUS PURCHASES FOR THE A.Y. 2010 - 11 AND A.Y. 2011 - 12 RESPECTIVELY . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE GROUNDS OF APPEAL IN TH ESE APPEAL S AND THE ORDERS OF THE AUTHORITIES BELOW . WE FIND THAT THE TAX EFFECT IN BOTH THESE APPEAL S IS LESS THAN .5 0 LAKHS AND T HEREFORE THE APPEAL S OF THE R EVENUE ARE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. WE ALSO OBSERVED THAT SINCE THE ISSUE IS IN RESPECT OF LEVY OF PENALTY 3 ITA NOS. 603 & 604/MUM/2019 M/S. FANCY WEAR U/S. 271(1)(C) OF THE ACT NONE OF THE EXCEPTION IN THE CIRCULAR ARE APPLICABLE. HENCE TH ESE APPEAL S ARE NOT MAINTAINABLE. 6. IN THE RESULT, APPEAL S OF THE R EVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH FEBRUARY, 2020 SD/ - SD/ - ( S. RIFAUR RAHMAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 25/02/2020 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM