M. PATWARI TRADERS P. LTD, MUMBAI V. ITO 1(2)(3), MUMBAI

ITA 6037/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9647 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: G S PIKALE
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c); 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 6037 /MUM/ 201 8 (ASSESSMENT YEAR 20 09 - 10 ) M/S. M. PATWARI TRADERS PVT. LTD. 4, REWA CHAMBERS, 31, NEW MARINE LINES MUMBAI - 400 020 . PAN : AABCM6720B V S . ITO 1(2)(3) MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI G.S. PIKALE DEPARTMENT BY SHRI CHAITANYA ANJARIA DATE OF HEARING 03 . 09 . 201 9 DATE OF PRONOUNCEMENT 02.12 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28.9.2018 AND PERTAINS TO A.Y. 2009 - 10. 2. THE ISSUE RAISED IS THAT LEARNED CIT(A) ERRED IN UPHOLDING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 9,12,542/ - . 3. BRIEF FACTS OF THE CASE ARE THAT FOR THE DISALLOWANCE OF BOGUS PURCHASE IN THE CASE OF THE ASSESSEE GROSS PROFIT WAS ESTIMATED AT 12% AND THEREAFTER GROSS PROFIT ALREADY DECLARED @ 8.94% WAS DEDUCTED FOR THE DISALLOWANCE AT RS. 29,53,210/ - . PENALTY U/S. 271(1)( C) OF THE ACT WAS ALSO LEVIED THE SAME WAS CONFIRMED BY LEARNED CIT(A). 4. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE DISALLOWANCE OF PURCHASE HAS BEEN DONE ON EST IMATE BASIS. THE ASSESSEE HAS SUBMITTED ALL THE NECESSARY DOCUMENTARY EVIDENCE. ADVERSE INFERENCE IS DRAWN ONLY ON THE M/S. M. PATWARI TRADE RS PVT. LTD. 2 GROUND ASSESSEE WAS NOT ABLE TO PRODUCE CONCERNED PARTIES. IN OUR CONSIDERED OPINION ASSESSEES CONDUCT BY NO STRETCH OF IMAGINATION IS CONSIDER ED TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT . THE ASSESSEE HAS GIVEN ALL NECESSARY DOCUMENTS FOR PURCHASES. SALES WERE NOT DOUBTED. AS A MATTER OF FACT, ON THIS ISSUE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKU NJ EXIMP ENTERPRISES (IN WRITE PETITION NO. 2860, ORDER DATED 18.6.2014) HAS EXPOUNDED THAT NO DISALLOWANCE FOR BOGUS PURCHASES SHOULD BE DONE. HENCE, MERE NON - RESPONSE FROM THE SUPPLIERS CAN NOT BE LEAD TO LEVY OF PENALTY U/S. 271(1)(C ) OF THE ACT WHEN DIS ALLOWANCE IN A N ESTIMATE BASIS. HENCE, IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT IS UNJUSTIFIED. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW. ORDER HAS BE EN PRONOUN CED IN THE COURT ON 2 . 1 2 . 201 9 . SD/ - SD/ - ( AMARJIT SINGH ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 / 1 2 / 20 1 9 COPY OF THE ORDE R 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