INCOME TAX OFFICER-22(2)(6), MUMBAI, MUMBAI V. KIRTIKUMAR PUNAMCHAND SHAH, MUMBAI

ITA 6199/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2003 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Bogus purchase; Accommodation entries; Tax effect
• Section: 271(1)(c); 143(3); 147; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M. BALAGANESH , ACCOUNTANT MEMBER ITA NO. 6199 /MUM/2019 ASSESSMENT Y EAR: 2009 - 10 ITO - 22(2)(6), INCOME TAX OFFICE, R. NO. 312, 3 RD FLOOR, PI RAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 VS. SHRI KIRTIKUMAR PUNAMCHAND SHAH, PROP. M/S DEEPAK TRADING CORPORATION, A - 2/141, SHAH & NAHAR INDUSTRIAL ESTATE, LOWER PAREL, MUMBAI - 400013 PAN: AAEPS2695H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI G URBINDER SINGH (D R) ASSESSEE BY : NONE DATE OF HEARING: 06 /05 /20 21 DATE OF PRONOUNCEMENT: 02 / 0 6 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 17.07.20 19 OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS) 33 , MUM BAI DELETING THE PENALTY IMPOSED OF RS. 4,58,000/ - U NDER SECTION 271(1)(C) OF THE INCOME TAX ACT , 1961 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENT F OR THE ASSESSEE. HOWEVER, CONSIDERING THE NATURE OF DISPUTE , WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND BASED ON MATERIAL ON RECORD. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN I NDIVIDUAL AND IS A TRADER IN ALL KINDS OF PAPER AND PAPERBOARDS . FOR THE ASSESSMENT YEAR UNDER DISPUTE , THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.09.2009 DECLARING TOTAL INCOME OF RS. 2 ITA NO. 6199 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 2,61,840/ - . ASSESSMENT IN CASE OF THE ASSESSEE WAS ORIGINALLY COMPLE TED VIDE ORDER DATED 22.12.2011 PASSED U NDER SECTION 143(3) OF THE INCOME TAX ACT 1961, DETERMINING THE TOTAL INCOME AT RS. 2,73,270/ - . S UBSEQUENT TO COMPLETION OF ASSESSMENT , AS AFORESAID , T HE ASSESSING OFFICER (AO) RECEIVED INFORMATION FROM THE SALES T AX D EPARTMENT, GOVT. OF MAHARASHTRA THROUGH DGIT (INV.), MUMBAI THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRIES BY WAY OF BOGUS PURCHASE BILLS TO THE EXTENT OF RS. 1,18,37,967/ - PROVIDED BY CERTAIN ENTITIES IDENTIFIED AS HAWALA OPERATOR S . ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE ACT AND ULTIMATELY COMPLETED THE ASSESSMENT BY DISALLOWING AN AMOUNT OF RS. 14,79,746/ - , BEING 12.5% OF THE ALLEGED NON - GENUINE PURCHASES OF RS. 1,18,37,967/ - . AS IT APPEARS , THE ASSESSEE ACCEPTED THE AFORESAID DISALLOWANCE . B E THAT AS IT MAY , ON THE BASIS OF THE AFORESAID DISALLOWANCE MADE , THE AO INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURA TE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. ULTIMATELY, THE AO PASSED THE ORDER IMPOSING PENALTY OF RS. 4,58,000/ - U NDER SECTION 271(1)(C) OF THE ACT . W HILE CONSIDERING ASSESSEES APPEAL A GAINST THE PENALTY ORDER SO PASSED , LEARNED COMMISSIONER (AP PEALS) DELETED THE PENALTY IMPOSED. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT , BASED ON CERTAIN INFORMATION RECEIVED FROM THE SALES T AX D EPARTMENT, GOVT. OF MAHARASHTRA , T HE A O NOT ONLY REOPENED THE ASSESSMENT IN CASE OF THE ASSESSEE BUT ULTIMATELY HELD CERTAIN PURCHASES TO BE NON GENUINE. HOWEVER, INSTEAD OF DISALLOWING THE ENTIRE PURCHASES , THE AO DISALLOWED ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING AT 12.5%. THE AFORESAID DECISION OF THE AO CLEARLY INDICATES THAT HE HAD NO DOUBT THAT THE GOODS IN QUESTION , IN FACT , WERE PURCHASES BY THE ASSESSEE. THE ONLY DOUBT HE HA D IS WITH REGARD TO THE SOURCE OF SUCH PURCHASES. FOR THIS REASON ALONE, HE HAS MADE AN ADDITION PURELY ON ESTIMATE BASIS. IT IS FURTHER EVIDENT , THE ASSESSEE HA D FURNISHED CERTAIN DOCUMENTARY EVIDENCES TO PROVE THE PURCHASES INCLUDING THE 3 ITA NO. 6199 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 QUANTITATIVE TALLY OF PURCHASES AND SALES. FURTHER, PAYMENTS TOWARDS PURCHASES WERE MADE THROUGH BAN KING CHANNEL. IN THESE CIRCUMSTANCES, IT CANNOT BE ALLEGED THAT THE ASSESSEE EITHER HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR H A S CONCEALMENT HIS INCOME. MORE SO , WHEN THE ADDITION ON THE BASIS OF WHICH PENALTY UNDER SECTION 27 1 (1)(C) OF THE ACT WA S IMPOSED HAS BEEN MADE PURELY ON ESTIMATE BASIS. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER ( APPEALS ) . 5. HAVING HELD SO , WE MAY FURTHER ADD THAT THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT OF RS. 50 LACS. HENCE, AS PER CIRCULAR NO. 17 OF 2019 DATED 8 TH AUGUST 2019 ISSUED BY THE CENTRAL BOARD OF DIRECT TAX ES (CBDT), THE APPEAL IS NOT MAINTAINABLE. IN OUR VIEW, THE PRESENT APPEAL WOULD NOT BE PROTECT ED BY ANY OF THE EX CEPTIONS PROVIDED TO THE AFORESAID C IRCULAR AS THE PENALTY PROCEEDING IS COMPLETELY INDEPENDENT OF ASSESSMENT PROCEEDINGS. HENCE, IT CANNOT BE SAID THAT IT IS BASED ON ANY INFORMATION RECEIVED FROM EXTERNAL AGENCIES. THEREFORE , FOR THIS REASON ALSO THE APPEAL IS LIABLE TO BE DISMISSED. ACCORDINGLY, WE DO SO. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JUNE , 2021 . SD/ - SD/ - ( M. BALAGANES H ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 02 / 0 6 /202 1 ALINDRA, PS 4 ITA NO. 6199 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 / 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// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI