ACIT - CIRCLE- 4, THANE V. AJAY V. PRASAD, MUMBAI

ITA 6415/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2793 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Bogus purchase; Depreciation
• Section: 271(1)(c); 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI RAVISH SOOD (JM) I.T.A. NO. 6415 /MUM/ 201 8 (ASSESSMENT YEAR 20 11 - 1 2 ) ACIT CIRCLE - 4 ROOM NO. 2, ASHAR I.T. PARAK, 6 TH FLOOR A - WING, ROAD NO. 16Z, WAGLE INDUSTRIA L ESTATE THANE(W) - 400 604. V S . SHRI AJAY V. PRASAD PROP. M/S. PRIME INDUSTRIES UNIT NO. 12, BUILDING NO. 06 AGARWAL UDYOG NAGAR, WALIV VASAI - EAST MAHARASHTRA - 401 208. PAN : AFGPP8407B ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NO NE DEPARTMENT BY SH RI RAVINDER SINDHU DATE OF HEARING 13.01 . 20 20 DATE OF PRONOUNCEMENT 03 . 0 3 . 20 20 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 7.8.2018 . IN THIS ORDER LEARNED CIT(A) HAS D ELETED THE PENALTY LEVIED OF RS. 88,454/ - LEVIED U/S. 271(1)(C) OF THE ACT FOR A.Y. 2011 - 12. 2. BRIEF FACTS OF THE CASE LEADING TO LEVY OF PENALTY ARE ENUMERATED AS UNDER : - THERE WAS INFORMATION FROM SALES TAX AUTHORITY THAT THE ASSESSEE HAD MADE BOGUS PU RCHASES. T HE PROPRIETOR/PARTNER OF THE ABOVE MENTIONED PARTIES HAS GIVEN STATEMENTS BEFORE THE SALES TAX AUTHORITIES AND STATED THEREIN THAT THEY HAVE INDULGED IN BOGUS BILLING UNDER VARIOUS NAMES WITHOUT SUPPLYING THE ACTUAL GOODS/MATER IALS AS MENTIONED I N T HE BILLS . THE ASSESSING OFFICER GAVE AN OPPORTUNITY TO THE ASSESSEE, TO SUBSTANTIATE THE CREDITWORTHINESS AND GENUINENESS OF THE SAID TRANSACTION BY PRODUCING THE PARTIES . IN RESPONSE, THE AR OF THE ASSESSEE, VIDE ORDER SHEET NOTING DATED SHRI AJAY V. PRASAD PROP. M/S. PRIME INDUSTRIES 2 02.12.2014 STA TED THAT THEY ARE UNABLE TO L OCA TE THE SAID PARTIES. TAKING INTO ACCOUNT THE ABOVE FACT S AND CIRCUMSTANCES, ASSESSING OFFICER OPINED THAT THE ASSESSEE WAS A BENEFICIARY OF THE THERE WASN'T ACTUAL DELIVERY/PHYSICAL DELIVERY OF GOODS. THAT A N ACCOMMODATION B ILL IS OBTAINED FOR INTRODUCING UNACCOUNTED GOODS INTO THE ACCOUNTED STREAM. HENCE HE HE LD THAT THE ASSESSEE DELIBERATELY CLAIMED THE DEPRECIATION AND CONCEALED PARTICULARS OF HIS TRUE INCOME BY FURNISHING INACCURATE PARTICULAR TO THE EXTENT OF RS 2,86,260 / - . 3. ON THIS ADDITION PENALTY WAS LEVIED AMOUNTING TO RS. 88,454/ - . 4. UPON ASSESSEES APPEAL LEARNED CIT(A) FOUND THAT THE ASSESSEE HAS TRIED ITS BEST TO PROVE ALLEGED BOGUS PURCHASES BY PROVIDING PURCHASE BILLS, EVIDENCE OF PAYMENT MADE THROUGH BANKI NG CHANNEL ETC. HOWEVER, ADVERSE INFERENCE WAS TAKEN BECAUSE OF THE INABILITY OF THE ASSESSEE TO PRODUCE ALLEGED BOGUS SUPPLIERS. LEARNED CIT(A) OPINED THAT IN THESE CIRCUMSTANCES PENALTY CANNOT BE LEVIED. HE FOUND THAT THE ASSESSEE HAS NOT MADE ANY CONSCI OUS ATTEMPT OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME. LEARNED CIT(A) ALSO PLACED RELIANCE UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS AND SEVERAL OTHER CASE LAWS. LEARNED CIT(A) WAS OF THE OPINION THAT THE ASSESSEE HAS MADE A BONAFIDE CLAIM AND ASSESSEE CANNOT BE IMPOSED PENALTY U/S. 271(1)(C) OF THE ACT. 5. AGAINST THIS ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL CONSIDERATION, WE FIND THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED ON THE ADDITION MADE FOR DISALLOWANCE OF DEPRECIATION CLAIMED ON THE PLEA THAT PURCHASE OF ASSET IN THIS REGARD WAS BOGUS. FOR COMING TO THIS DECISION THE ASSESSING OFFICER HAS RELIED UPON THE INFORMATION RECEIVED FROM THE SALES TAX AUTHORITY AND ALSO INABILITY OF THE ASSESSEE TO PRODUCE ALLEGED BOGUS SUPPLIERS. THE ASSESSEE HAS PRODUCED PURCHASE BILLS SHRI AJAY V. PRASAD PROP. M/S. PRIME INDUSTRIES 3 AND PAYMENTS WERE ALSO MADE THROUGH BANKING CHANNEL. IN THESE FACTS, IN OUR CONSIDERED OPINION LEARNED CIT(A) I S QUITE CORRECT IN HOLDING THAT THE ASSESSEES CONDUCT IS NOT CONTUMACIOUS TO WARRANT LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. FOR THIS PROPOSITION WE PLACE RELIANCE UPON THE DECISION OF THE LARGER BENCH OF HON'BLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (83 ITR 26) ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) AND HENCE, WE UPHOLD THE SAME. 7. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STA NDS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 3 . 3 . 20 20 . SD/ - ( RAVISH SOOD ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 03 / 0 3 / 20 20 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// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI