MOHMED FIRDOUS KHAN, MUM V. I.T.O. - 26(3)(4), MUMBAI

ITA 6542/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5587 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKIYEN
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH MUMB AI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 6542/MUM/2017 (ASSESSMENT YEAR 2009-10 ) MOHMED FIRDOUS KHAN, GALA NO. B/9, BABU MARKET, ZAHOOR NAGAR, KHERANI ROAD, SAKINAKA, ANDHERI (E), MUMBAI 400072. PAN: AIYPK7589A VS. ITO 26(3)(4), BKC, BANDRA, MUMBAI 400051 APPELLANT RESPONDE NT APPELLANT BY : NONE RESPONDENT BY : SHRI ABI RAMA KARTIKIYEN (DR) DATE OF HEARING : 03.09.2019 DATE OF PRONOUNCEMEN T : 03.09.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-38, MUMBAI, DATED 24.08.201 7 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUND OF APPEAL: 1. A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEA L) 38 HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT 1961 BY THE LEARNED INCOME TAX OFFICER OF RS.147500/- B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) 38 FAILED TO APPRECIATE THAT APPELLANT AGREED FOR ADDITION TO INCOME 25% ON SUCH PURCHASES TO GAIN PEACE OF MIND AND TO AVOID LITIGATION WITH THE INCO ME TAX DEPARTMENT C) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) 38 OUGHT TO HAVE APPRECIATED THAT LEARNED INCOME TAX OFFICER HAS LEV IED PENALTY ON ESTIMATE ADDITION TO TOTAL INCOME. ITA NO. 6542/M/2017- MOHMED FIRDOUS KHAN 2 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 22.09.2009 DECLARING TOT AL INCOME OF RS. 6,89,740/-. THE ASSESSMENT WAS COMPLETED UNDER SECT ION 143(3) ON 27.02.2015. THE ASSESSEE HAS SHOWN TOTAL PURCHASE S OF RS. 16,00,133/- FROM M/S SHREE VINAYAK SALES CORPORATION, BHANDARI METAL AND VISHAL PIPES. THE SAID PARTIES WERE CONSIDERED AS BOGUS P ARTIES ON THE BASIS OF REPORT OF SALES TAX DEPARTMENT. THE ASSESSING OFFIC ER WHILE PASSING THE ASSESSMENT ORDER MADE DISALLOWANCE ON ACCOUNT OF BO GUS PURCHASES OF RS. 4,00,023/- BEING 25% OF TOTAL ALLEGED BOGUS PUR CHASES OF RS. 16,00,133/-. THE ASSESSING OFFICER MADE ADDITIONS ON ESTIMATE BASIS. THE ASSESSING OFFICER ALSO INITIATED PENALTY UNDER SECT ION 271(1)(C). THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE A SSESSEE. THE ASSESSEE FILED HIS REPLY AS NOTED IN PARA 6 OF HIS PENALTY O RDER. THE ASSESSING OFFICER HAS NOT DISCUSSED THE CONTENTS OF THE REPLY FURNISHED BY THE ASSESSEE. THE REPLY FILED BY THE ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER LEVIED 100% OF PENAL TY OF TAX SOUGHT TO BE EVADED VIDE ITS ORDER DATED 27.02.2015. ON APPEAL B EFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS CONFIRMED. AGGR IEVED, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE WHEN CASE WAS T AKEN UP FOR HEARING. PERUSAL OF RECORD REVEALS THAT ASSESSEE WAS DULY SE RVED BY THE NOTICE OF HEARING. THE LD. AR OF THE ASSESSEE ALSO APPEARED O N ONE OCCASION ON ITA NO. 6542/M/2017- MOHMED FIRDOUS KHAN 3 20.02.2019. TODAY, NONE APPEARED ON BEHALF OF ASSES SEE, THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE SUBMISSION OF LD. DR FOR THE REVENUE AND TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAIL ABLE ON RECORD. THE LD DR FOR THE REVENUE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES AND SUBMITS THAT THE ASSESSEE HAS SHOWN BOGUS PURCHASES , WHICH WERE DISALLOWED. 4. WE HAVE NOTED THAT DURING THE ASSESSMENT, THE ASSES SING OFFICER MADE DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE. THE ASSE SSING OFFICER IDENTIFIED THE BOGUS PURCHASES OF RS. 16,00,133/-. THE ASSESSING OFFICER DISALLOWED 25% OF THE PURCHASES. THE ASSESSING OFFI CER MADE THE DISALLOWANCE ON ESTIMATED BASIS. THE ASSESSING OFFI CER LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. IN OUR CONS IDERED VIEW THAT NO PENALTY IS LEVIABLE ON ESTIMATED DISALLOWANCE. THER EFORE, THE PENALTY LEVIED BY ASSESSING OFFICER VIDE ORDER DATED 27.02. 2015 IS DELETED. HENCE, GROUNDS OF APPEAL RAISED BY ASSESSEE ARE ALL OWED. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN C OURT ON 03 /09/2019. SD/- SD/- R.C. SHARMA PAWAN SIN GH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 03 .09.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) ITA NO. 6542/M/2017- MOHMED FIRDOUS KHAN 4 4. THE CONCERNED CIT 5. DR C BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR TAT, MUMBAI