ACIT 8 (2)(1), MUMBAI V. M/S SHIMERA PROJECTS PVT LTD., MUMBAI

ITA 6540/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9676 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 15-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Tax effect
• Section: 271(1)(c); 147

Judgement Text

1 ITA 6540/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) I.T.A. NO.6540/MUM/2019 (ASSESSMENT YEAR 2011-12) ACIT-8(2)(1), MUMBAI VS M/S SHIMERA PROJECTS LIGHTI NG PVT LTD UNIT NO.5, GROUND FLOOR, RAGHUVANSHI MILL COMPOUND, S.B. MARG, LOWER PAREL, MUMBI-400 013 PAN : AALCS3050J APPELLANT RESPONDENT APPELLANT BY SHRI VIJAY KUMAR MENON, (DR) RESPONDENT BY NONE DATE OF HEARING 29-06-2021 DATE OF PRONOUNCEMENT 29-07-2021 O R D E R PER : SAKTIJIT DEY (JM): THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DAT ED 31-07-2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-14, MUMBAI DEL ETING THE PENALTY IMPOSED OF RS.80,761/- UNDER SECTION 271(1)(C) OF THE INCOM E TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2011-12. 2. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, NO ONE WAS PRESENT FOR THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PR OCEED TO DISPOSE OF THE APPEAL 2 ITA 6540/MUM/2019 EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND BASED ON MATERIALS ON RECORD. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDEN T COMPANY. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FIL ED ITS RETURN OF INCOME ON 30- 09-2011 DECLARING TOTAL INCOME OF RS.44,31,383/-. S UBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES-TAX DEP ARTMENT THROUGH DGIT (INV), MUMBAI THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMM ODATION BILLS PROVIDED BY A PARTY AGAINST NON GENUINE PURCHASES WORTH RS.20,90, 914/-. BASED ON SUCH INFORMATION, THE ASSESSING OFFICER REOPENED THE ASS ESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES. THOUGH, THE AS SESSEE FURNISHED COPIES OF PURCHASE BILLS AND SOME OTHER DOCUMENTARY EVIDENCES TO PROVE THE PURCHASES; HOWEVER, THEY WERE NOT TO THE SATISFACTION OF THE A SSESSING OFFICER. THEREFORE, HE HELD THE PURCHASES AS NON GENUINE. HOWEVER, CONSIDE RING THE FACT THAT ASSESSEE WAS ABLE TO ESTABLISH THE CONSUMPTION OF MATERIALS AND SALES EFFECTED, THE ASSESSING OFFICER DISALLOWED THE PROFIT ELEMENT EMB EDDED IN THE ALLEGED NON- GENUINE PURCHASES BY ESTIMATING AT 12.5%. EVENTUALL Y, THE ASSESSING OFFICER DISALLOWED AN AMOUNT OFRS.2,61,364/-. BASED ON SUC H DISALLOWANCE, THE ASSESSING OFFICER INITIATED PROCEEDING FOR IMPOSITION OF PENA LTY UNDER SECTION 271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURATE PARTICULA RS OF INCOME. ULTIMATELY, ASSESSING OFFICER PASSED AN ORDER IMPOSING PENALTY OFRS.80,761/-. AGAINST THE PENALTY ORDER SO PASSED, ASSESSEE PREFERRED AN APPE AL BEFORE LEARNED COMMISSIONER (APPEALS). BEING CONVINCED WITH THE SU BMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 3 ITA 6540/MUM/2019 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DE PARTMENTAL REPRESENTATIVE AND PERUSED MATERIALS ON RECORD. IT IS EVIDENT, THE ASSESSING OFFICER HAS TREATED CERTAIN PURCHASES MADE BY THE ASSESSEE AS NON GENUINE. HOWEVER, HE HAS DISALLOWED ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. THUS, THE AFORESAID ACTION OF THE ASSESSING OFFICER PRE-SUPPO SES THAT HE HAD NO DOUBT THAT THE GOODS REPRESENTING SUCH PURCHASES, INDEED, WERE AVAILABLE WITH THE ASSESSEE, THOUGH, THE SOURCE OF SUCH PURCHASE REMAINED UNVERI FIED. THUS, THE ADDITION GIVING RISE TO IMPOSITION OF PENALTY IS ON ACCOUNT OF SOME AMOUNT OF DOUBT AND SUSPICION ENTERTAINED BY THE ASSESSING OFFICER REGA RDING THE SOURCE OF PURCHASES. IT IS ALSO A FACT THAT SUCH ADDITION WAS MADE PUREL Y ON ESTIMATE BASIS. THUS, IN OUR CONSIDERED OPINION, THE ADDITION MADE BASED ON DOUB T AND SUSPICION, THAT TOO, PURELY ON ESTIMATE BASIS CANNOT LEAD TO THE CONCLUS ION THAT THE ASSESSEE HAS COMMITTED ANY OFFENCE AS PER SECTION 271(1)(C) OF T HE ACT. THEREFORE, WE AGREE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 5. EVEN OTHERWISE ALSO, THE TAX EFFECT ON THE AMOUN T DISPUTED BY THE REVENUE IN BOTH THESE APPEALS IS BELOW THE MONETARY LIMIT O F RS.50 LAKHS STIPULATED IN CBDT CIRCULAR NO. 17/2019 DATED 08 TH AUGUST, 2019. HAVING ANALYSED THE FACTUAL POSITION, WE ARE OF THE CONSIDERED OPINION THAT THE PRESENT APPEAL OF THE REVENUE IS NOT COVERED BY ANY OF THE EXCEPTIONS PROVIDED TO THE CIRCULAR NOTED ABOVE, AS, THE PENALTY PROCEEDINGS IS AN INDEPENDENT PROCEEDIN G. THEREFORE, IN OUR CONSIDERED OPINION THE PRESENT APPEAL OF THE DEPART MENT IS NOT MAINTAINABLE. FOR THIS REASON ALSO, THE APPEAL DESERVES TO BE DIS MISSED. ACCORDINGLY, WE DO SO. 6. IN THE RESULT, THE APPEAL IS DISMISSED. 4 ITA 6540/MUM/2019 ORDER PRONOUNCED ON 29/07/2021. SD/- SD/- RAJESH KUMAR SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 29/07/2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI