TECHNO PROCESS EQUIPMENTS (I) PRIVATE LTD, MUMBAI V. DCIT 15(3)(1), MUMBAI

ITA 6375/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6620 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Set aside
• Section: 271(1)(c); 143(3); 142(1); 143(2); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 6375 / MUM/ 20 1 7 ( / ASSESSMENT YEAR: 2011 - 12 ) M/S. TECHNO PROCESS EQUIPMENTS (INDIA) PVT. LTD. 215/219, 2 ND FLOOR, ASHOK INDUSTRIAL PREMISES, L.B.S. MARG, BHANDUP (W), MUMBAI - 400078 . / VS. DCIT, CIRCLE - 15(3)(1) AAYAKAR BHAVAN, 4 TH FLOOR, ROOM NO. 451, M.K. ROAD, MUMBAI - 400020. ./ ./ PAN/GIR NO. : AABCT 2398 C ( / APPEL LANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 21 .0 2 .201 9 / DATE OF PRONOU NCEMENT : 27. 02 .2019 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 21.08.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2011 - 12 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 THE LD. CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.35,000/ - UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961 BY ASSESSEE BY : SHRI MINHAZALI N. LADIWALA REVENUE BY: SHRI CHAUDHARY ARUN KUMAR SINGH ( D R) ITA. NO .6375 /M/201 7 A.Y. 2011 - 12 2 DISMISSING THE APPEAL PETITION OF THE APPELLANT AND NOT CONSIDERING THE SUBMISSION MADE BY THE APPELLANT. 2. YOUR APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTER, SUBSTITUTE, OR DELETE ANY OR ALL OF THE FOREGOING GROUNDS OF APPEAL BEFORE OR DURING THE HEARING OF THE APPEAL. ' 4 . THE BRIEF FACTS OF THE CA SE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 .09.20 11 DECLARING TOTAL I NCOME TO THE TUNE OF RS.3,16,07,183 / - . THE ASSESSEE MADE THE PURCHASES FROM ALLEGED BOGUS HAWALA DEALERS AMOUNTING TO RS.97,263/ - . THEREFORE, THE ASSESSMENT OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT AND NECESSARY NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED ON 23.02.2015 RAISING THE ADDITION OF BOGUS PURCHASE IN SUM OF RS.97,263/ - . THEREAFTER, THE PENALTY PROCEEDING WAS INITIATED ON ACCOUNT OF BOGUS PURCHASE IN SUM OF RS.97,263/ - . A FTER GIVING NOTICE , THE AO LEVIED THE PENALTY IN SUM OF RS.35,000/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT( A) WHO CONFIRMED THE ORDER , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECO R D. UNDER THESE ISSUES THE ASSESSEE HAS CHALLENGED THE CONFIRMA TION OF THE PENALTY B Y THE CIT(A) IN SUM OF RS.97,263 / - LEVIED BY THE AO . THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PENALTY HAS BEEN LEVIED BY THE AO ON ACCOUNT OF THE ESTIMATION OF PROFIT UPON THE ITA. NO .6375 /M/201 7 A.Y. 2011 - 12 3 ALLEGED BOGUS PURCHASE WHICH IS NOT JUSTI FIABLE, THEREFORE, THE PENALTY IS NOT LIABLE TO BE SUSTAINABLE IN VIEW OF THE LAW SETTLED IN GUJARAT HIGH COURT IN THE CASE TITLED AS NATIONAL TEXTILES VS. CIT 2001 164 CTR 2009 (GUJ). HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HA S REFUTED THE SAID CONTENTION. TAKING INTO ACCOUNT, ALL THE FAC TS AND CIRCUMSTANCES AND PERUSING THE RECORD, W E FIND THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT ON THE BASIS OF THE INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI IN WHIC H IT WAS CONVEYED THAT THE SALES TAX DEPARTMENT HAS INFORMED ABOUT THE BOGUS PURCHASE OF THE ASSESSEE . T HE BOGUS PURCHASE TOTAL IN SUM OF RS.97,263 / - WAS ADDED TO THE INCOME OF THE ASSESSEE . B OOKS OF ACCOUNT OF THE ASSESSEE HAS NOT BEEN REJECTED. THE FACTU AL SITUATION NOWHERE LEADS TO CONCEALMENT OF INCOME OR FURNISHING THE INACCURATE PARTICULARS OF INCOME . I T IS NOT A GROUND TO LEVY THE PENALTY. MOREOVER, IT IS A CASE WHERE THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED AND TO LEVY OF PENALTY MERELY ON A CCOUNT OF DISALLOWANCE OF EXPENSES IS NOT LIABLE TO BE CONSIDERED AS CONCEALMENT OF ANY PARTICULARS OF INCOME OR CONCEALMENT OF INCOME OR MALA - FIDE INTENTION TO REDUCE THE TAXABLE INCOME. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT HIGH COURT IN THE CASE TITLED AS NATIONAL TEXTILES VS. CIT 2001 164 CTR 2009 (GUJ) HAS HELD THAT THE SECTION 68 OF THE ACT PERMITS THE AO TO TREAT THE UNEXPLAINED CASH CREDIT AS INCOME OF THE ASSESSEE BY MAKING CERTAIN ADDITION IF ANY , IF THERE I S FAILURE OF THE ASSESSE E TO GIVE ANY EXPLANATION THEN THE ITA. NO .6375 /M/201 7 A.Y. 2011 - 12 4 ADDITION MADE ON THIS ACCOUNT AUTOMATICALLY CANNOT BE A JUSTIFIABLE GROUND TO LEVY THE PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, IN VIEW OF THE LAW SETTLED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTIL ES (SUPRA), WE ARE OF THE VIEW THAT THE PENALTY ON ACCOUNT OF SUSTAINING THE ADDITION U/S 68 OF THE ACT OF BOGUS PURCHASE IS NOT JUSTIFIABLE, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THESE ISSUES AND DELETE THE PENALTY. ACCORDINGLY, WE DECIDE T HESE ISSUES IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . 7 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 27 . 0 2 .2019 . SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 27 . 02 .2019 . V IJAY / 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