INMARCO INDUSTRIES PVT LTD., MUMBAI V. ASST. CIT 10 (1)(1), MUMBAI

ITA 6528/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3692 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 15-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANPREET DUGGAL
• Keywords: Bogus purchase; Revised return; Set aside
• Section: 271(1)(c); 250; 274; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 6528/MUM/2019 (A.Y: 2011-12) INMARCO INDUSTRIES PVT LTD., SANJAY BLDG, 5B ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI 400059. VS. ACIT 10(1)(1) AAYAKAR BHAVAN, MUMBAI. PAN/GIR NO. : AAACI3624R APPELLANT .. RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI MANPREET DUGGAL, DR DATE OF HEARING 04 .0 5 .2021 DATE OF PRONOUNCEMENT 01 .0 6 .2021 / O R D E R PER PAVAN KUMAR GADALE, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -21 MUM BAI, PASSED U/S. 271(1)(C) AND 250 OF THE INCOME TAX ACT , 1961. THE ASSESSEE HAS RAISED THE GROUNDS OF APPE AL: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING PENALTY LEV IED B Y THE LD. AO U/S 271(1)(C) OF RS.16000 AND THE REASONS AS SIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS OF THE CASE, THE PROVISIONS OF THE IT ACT AND THE RULES MADE THERE U NDER; ITA NO. 6528/MUM/2019 INMARCO INDUSTRIES PVT LTD., MUMBAI - 2 - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING PENALTY LEVIED BY THE LD. AO U/S 271(1)(C) ON ADHOC DISALLOWANCE OF RS. 48,00 0 OUT OF RS. 3,19,452/- SUSTAINED BY THE CIT(A) AND THE REAS ONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS OF THE CASE, THE PROVISIONS OF IT ACT AND THE RULES MA DE THERE UNDER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY PROCEEDINGS WITHOUT APPRECIATING THAT NO SPECIFIC CHARGE WAS MA DE BY AO FOR LEVY OF PENALTY I.E WHETHER THE PENALTY PROCEED INGS HAS BEEN INITIATED FOR CONCEALING OF PARTICULARS OF INC OME OR FURNISHING THE INACCURATE PARTICULARS OF INCOME IN THE SHOW CAUSE NOTICE ISSUED U/S 274 R.W.S 271(1)(C) BY STAT ING THAT NEITHER SPECIFIC GROUND WAS RAISED ON THE ISSUE NOR ANY FACTUAL DETAILS WERE FILED BY THE APPELLANT DURING THE PENALTY PROCEEDINGS, WHICH IS WRONG AND CONTRARY TO THE FAC TS OF THE CASE, THE PROVISIONS OF IT ACT AND THE RULES MADE T HERE UNDER; 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE COMPANY IS ENGAGED IN THE MANUFACTURING OF FLUID SE ALING PRODUCTS. THE ASSESSEE HAS FILED THE RETURN OF INC OME ELECTRONICALLY FOR THE A.Y 2011-12 ON 29.11.2011 WI TH TOTAL INCOME OF RS.5,34,75,916/-.FURTHER, THE ASSES SEE HAS FILED THE REVISED RETURN OF INCOME ON 30.03.201 3 DECLARING A TOTAL INCOME OF RS.5,35,44,581/.- SUBSEQUENTLY, THE A.O. HAS RECEIVED THE INFORMATIO N FROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMEN T, MUMBAI THAT THE ASSESSEE WAS INVOLVED IN OBTAINING THE BOGUS PURCHASE TRANSACTIONS BILLS FROM THREE PARTIE S AGGREGATING TO RS.3,19,452/- AND THE NOTICE WAS ISS UED ITA NO. 6528/MUM/2019 INMARCO INDUSTRIES PVT LTD., MUMBAI - 3 - U/S 147 OF THE ACT. THE A.O HAS CALLED FOR THE EXPLANATIONS AND GENUINENESS OF THE TRANSACTIONS. F INALLY THE A.O. HAS MADE ADDITION OF THE BOGUS PURCHASES A ND DISALLOWANCE U/SEC14A OF THE ACT AND ASSESSED THE T OTAL INCOME OF RS.5,41,45,470/- ON 25.03.2014 3.SUBSEQUENTLY,THE A.O. HAS INITIATED PENALTY PROCE EDINGS U/S 271(1)(C) OF THE ACT AND FOUND THAT THE ASSESSE E AGAINST THE QUANTUM ADDITION HAS FILED AN APPEAL WI TH THE CIT(A). WHEREAS, THE CIT(A) HAS RESTRICTED THE DISALLOWANCE @ 15% OF THE BOGUS PURCHASES. THE A.O. WAS NOT SATISFIED WITH THE EXPLANATIONS OF THE ASSESSEE AND LEVIED PENALTY OF RS.16,000/- U/S 271(1)(C) OF THE ACT AND PASSED THE ORDER ON 20.03.2017. 4. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE HAS FILED THE APPEAL WITH THE CIT(A), WHEREAS, THE CIT(A) HAS CONFIRMED THE ACTION OF THE A.O AND SUSTAINED THE PENALTY. AGGRIEVED BY THE CIT(A) ORDER THE ASSESSE E HAS FILED AN APPEAL WITH THE HONBLE TRIBUNAL. 5. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. THE LD. DR RELIED ON THE ORDERS OF LO WER AUTHORITIES. 6. WE HEARD THE LD.DR SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED I SSUE ITA NO. 6528/MUM/2019 INMARCO INDUSTRIES PVT LTD., MUMBAI - 4 - IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT BY THE A.O BASED ON THE ASSESSMENT ORDER UNDE R SECTION 143 R.W.S 147 OF THE ACT. WE FIND THE A.O H AS MADE DISALLOWANCE OF BOGUS PURCHASES, WHEREAS, ON APPEAL CIT(A) HAS ESTIMATED THE INCOME/GROSS PROFIT @15%. WE ARE OF THE OPINION, THAT WHERE THE ADDITIO N IS SUSTAINED ON THE ESTIMATED BASIS NO PENALTY U/S 271(1)(C) OF THE ACT CAN BE LEVIED. ACCORDINGLY, WE CONSIDERING THE FACTS, CIRCUMSTANCES AND JUDICIAL DECISIONS SET ASIDE THE ORDER OF THE CIT(A) AND DIR ECT THE ASSESSING OFFICER TO DELETE THE PENALTY AND ALL OW THE GROUNDS OF APPEAL OF THE ASSES 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.06.2021 SD/- SD/- (SHAMIM YAHYA) (PAVAN KUMAR GAD ALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 04.06.2021 KRK ITA NO. 6528/MUM/2019 INMARCO INDUSTRIES PVT LTD., MUMBAI - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. () * + / GUARD FILE. / BY ORDER, ! //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBI