ITO 12(1)(2), MUMBAI V. ANMOL TOYS PVT. LTD., MUMBAI

ITA 6236/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7128 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Bogus purchase; Tax effect
• Section: 271(1)(c)

Judgement Text

INTHEINCOMETAX APPELLATETRIBUNAL MUMBAI BENCHAMUMBAI BEFORE SHRI C.N.PRASAD(JUDICIAL MEMBER)AND SHRI S. RIFAURRAHMAN(ACCOUNTANT MEMBER) ITANO.6236/MUM/2019 ASSESSMENT YEAR:2009-10 & ITANO.6235/MUM/2019 ASSESSMENT YEAR:2010-11 INCOMETAX OFFICER, 12(1)(2), ROOMNO. 146A, 1 ST FLOOR, AAYAKAR BHAVAN, CHURCHGATE, MUMBAI - 400020. VS. M/SANMOL TOYSPRIVATELIMITED, 117-AB, KANDIVALICO-OP, INDUSTRIAL ESTATELTD., CHARKOP,KANDIVALI(W), MUMBAI - 400067. PANNO.AAACA 5068 R APPELLANT RESPONDENT REVENUE BY : MR. BRAJENDRAKUMAR, DR ASSESSEEBY : NONE DATE OF HEARING : 17/06/2021 DATE OF PRONOUNCEMENT : 31/08/2021 ORDER PER S. RIFAURRAHMAN,A.M. THE CAPTIONED APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY THE CIT(A)-20, MUMBAI DATED 17.06.2019 FOR AYS 2009-10 & 2010-11. AS THE ISSUE INVOLVED IN THE CAPTIONED APPEALS ARE INEXTRICABLY INTERLINKED OR IN FACT INTERWOVEN AND HAVING COMMON ISSUE, THE SAME ARE THEREFORE BEING TAKEN UP AND DISPOSED OFF BY WAY OF A CONSOLIDATED ORDER.FACTSBEINGIDENTICAL WE BEGIN WITH THE AY 2009-10. M/S ANMOL TOYSPVT.LTD. ITA NOS. 6236& 6235/M/2019 2 2. AT THE OUTSET, IT IS NOTICED THAT NONE APPEARED ON BEHALF OF ASSESSEE IN SPITEOFCALLSANDEVENNOAPPLICATIONFORADJOURNMENTWASMOVED.ONTHEOTHER HAND,LD.DRISPRESENTINTHECOURTANDISREADYWITHARGUMENTS.THEREFORE,WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX-PARTE WITH THE ASSISTANCEOFTHELD.DRANDTHEMATERIAL PLACEDON RECORD. 3. BRIEF FACTS OF THE CASE ARE THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.09.2009 DECLARING TOTAL INCOME AT RS.9,95,837/-. THE ASSESSMENT WAS COMPLETEDU/S143(3)R.W.S.147OFTHEINCOMETAXACT,1961(INSHORTTHEACT) ON 19.03.2015 DETERMINING TOTAL INCOME OF RS.20,14,980/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VERIFICATION OF THE PURCHASES MADE BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THREE PARTIES FROM WHOM THE ASSESSEE HAS PURCHASED TO THE EXTENT OF RS.10,19,135/- AS BOGUS, BASED ON THE INFORMATION RECEIVED FROM DGIT (INV.) AND FURTHER INVESTIGATION MADE BY HIM. ACCORDINGLY, HE MADE A DISALLOWANCE OF 100%OF THE PURCHASES AND PROCEEDED WITHTHE PENALTYPROCEEDINGSU/ 271(1)(C). SUBSEQUENTLY,THEASSESSEEPREFERREDANAPPEALBEFORELD.CIT(A)AGAINST THEASSESSMENTORDERANDLD.CIT(A)RESTRICTEDTHEADDITIONTOTHEEXTENTOF6% OF THEALLEGED PURCHASES. CONSIDERINGTHEABOVE,THEASSESSINGOFFICERALSOLEVIEDTHEPENALTYBASED ON THE FINDINGS OF LD. CIT(A) AND ACCORDINGLY LEVIED THE PENALTY OF RS.18,895/- U/S271(1)(C)OF THE ACT. M/S ANMOL TOYSPVT.LTD. ITA NOS. 6236& 6235/M/2019 3 4. AGGRIEVED WITH THE ABOVEORDER,THEASSESSEE PREFERREDANAPPEAL BEFORE LD.CIT(A)ANDAFTERCONSIDERINGTHESUBMISSIONSOFTHEASSESSEE,THELD.CIT(A) DELETEDTHEPENALTY. 5. AGGRIEVEDWITHTHEABOVEORDER,THEREVENUERAISEDFOLLOWINGGROUNDSOF APPEAL BEFORE US: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961, OF RS.18,895/- WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE CLAIMED BOGUS PURCHASES IN ITS RETURN OF INCOME AND THUS FURNISHED INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAXACT,1961. 2. ONTHEFACTSANDINTHECIRCUMSTANCESOFTHECASE,THEHONBLEITATISREQUESTED TO ENTERTAIN THIS APPEAL THOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN THE CBDTS CIRCULAR NO. 17/2019 DATED 08.08.2019 READ WITH CIRCULAR NO. 3/2018 DATED 11.07.2018 AS AMENDED ON 20.08.2018 AS THE CASE FALLSINTHE EXCEPTIONPROVIDEDIN PARA 10(E) OF THE SAIDINSTRUCTIONIN ASMUCH AS THE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAWENFORCEMENTAGENCIES,NAMELY, SALES TAX AUTHORITIES. 6. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD. WE NOTICE THAT THE PENALTY IS LEVIED BY THE AO ON THE BASIS OF 6% OF THE ALLEGED BOGUSPURCHASESSUSTAINEDBYTHELD.CIT(A)INTHEQUANTUMAPPEAL.ITISFACTON RECORD THAT THE LD. ASSESSING OFFICER LEVIED THE PENALTY ON THE INCOME WHICH IS ESTIMATED AND THE VARIOUS COURTS HAVE HELD THAT THE PENALTY CANNOT BE LEVIED ONTHEINCOMEBASEDONESTIMATION.THEREFORE,WEAREINCLINEDTOAGREEWITHTHE FINDINGSOFTHE LD. CIT(A).ACCORDINGLY,THE PENALTYISDELETED. M/S ANMOL TOYSPVT.LTD. ITA NOS. 6236& 6235/M/2019 4 7. FACTS BEING IDENTICAL, OUR DECISION FOR THE AY 2009-10 APPLIES MUTATIS MUTANDIS TO AY2010-11. 8. IN THE RESULT,THE APPEALSFILEDBYTHE REVENUE ARE DISMISSED. ORDER PRONOUNCEDINTHEOPENCOURTON 31/08/2021. SD/- SD/- (C.N.PRASAD) ( S. RIFAURRAHMAN ) JUDICIALMEMBER ACCOUNTANTMEMBER MUMBAI; DATED: 31/08/2021 RAHULSHARMA,SR.P.S. COPYOFTHEORDERFORWARDED TO : 1. THEAPPELLANT 2. THERESPONDENT. 3. THECIT(A)- 4. CIT 5. DR, ITAT,MUMBAI 6. GUARDFILE. BY ORDER, //TRUECOPY// (DY./ASSISTANTREGISTRAR) ITAT, MUMBAI