ITO 27 (3)(3), MUMBAI V. SHASHANK HARSHADRAI SHAH, MUMBAI

ITA 6820/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8327 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Bogus purchase; Rule of consistency
• Section: 271(1)(c); 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI PAWAN SINGH (JM) & SHRI S. RIFAUR RAHMA N (A.M.) ITAS NO. 6820 & 6821/MUM/2018(ASSESSMENT YEAR :2010 -11 & 2009-10) ITO-27(3)(3), MUMBAI VS SHRI SHASHANK HARSHADRAI SHAH PROP. MAULIK ENTERPRISES 185/C/5135, 2 ND FLOOR PANT NAGAR, GHATKOPAR(E) MUMBAI-400 075 PAN : ASGPS6595Q APPELLANT RESPONDEDNT APPELLANT BY SHRI V. VINODKUMAR SR DR RESPONDENT BY NONE DATE OF HEARING 15-01-2020 DATE OF PRONOUNCEMENT 15 -01-2020 O R D E R PER PAWAN SINGH, JM : 1. THESE TWO APPEALS BY REVENUE ARE DIRECTED AGAINST T HE SEPARATE ORDERS OF LEARNED CIT (A)-25 DATED 10-09-2018 FOR ASSESSME NT YEARS 2010-11 & 2009-10, RESPECTIVELY. IN BOTH THE APPEALS, THE REVENUE HAS RAISED IDENTICAL GROUNDS OF APPEAL; FACTS FOR BOTH THE ASS ESSMENT YEARS ARE ALMOST IDENTICAL, EXCEPT VARIATION OF FIGURES OF LE VY OF PENALTY. THEREFORE, BOTH THE APPEALS WERE TAKEN TOGETHER FOR HEARING AND ARE DECIDED BY THIS CONSOLIDATED ORDER. FOR APPRECIATI ON OF FACTS, THE APPEAL FOR AY 2009-10 IS TREATED AS LEAD CASE. ITA NO.6821/MUM/2018 AY 2009-10 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 2 ITAS 6821 & 6820/MUM/2018 (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CJT(A) WAS CORRECT IN DELETING THE PENALTY L EVIED OF RS.59,700/- U/S.271(L)(C) OF THE IT ACT AS THE PENALTY WAS LEVI ED ON QUANTUM ADDITIONS MADE ON ACCOUNT OF BOGUS PURCHASES, WITHOUT APPRECI ATING THAT THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF SUCH PURCHASES BY PRODUCING SUCH PARTIES BEFORE THE ASSESSING OFFICER AND THE ASSESSEE FAILED TO DISCHARGE ITS ONUS ? (IT) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CTT(A) WAS CORRECT IN HOLDING THAT THE AO HA D MADE ADHOC ADDITIONS WITHOUT APPRECIATING THAT THE AO HAD LEVI ED PENALTY, ONLY AFTER VERIFYING THE FACT THAT THE ASSESSEE EVADED THE TAXES ON QUANTUM OF ADDITIONS MADE ON ACCOUNT OF BOGUS PURCHASES AND TH E ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF SUCH PURCHASES ? 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF WHOLE SELLER & DISTRIBUTOR OF HARDWARE, HIS FILED RETURN OF INCOME FOR A.Y. 2009-10 ON 29-09-2009 DECLARING TOT AL INCOME AT RS.1,07,377/- AND THE ASSESSMENT WAS COMPLETED UND ER SECTION 143(1). SUBSEQUENTLY, THE CASE WAS REOPENED U/S 147 ON THE BASIS OF INFORMATION THAT ASSESSEE HAS SHOWN BOGUS PURCHASES FROM THE PARTIES, WHO WERE INDULGING IN PROVIDING ACCOMMODATION ENTRI ES. THEREAFTER, THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 ON 27-03-2015 ASSESSING TOTAL INCOME AT RS.3,06,308/- BY MAKING A DDITION OF RS.1,98,931/- ON ACCOUNT OF BOGUS PURCHASES. THE A O MADE ADDITION @12.5% OF TOTAL ALLEGED BOGUS PURCHASES OF RS.15,91 ,446/-. THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961. THE AO, VIDE HIS ORDER DATED 25-09-2015 LEVIED PENA LTY @100% OF TAX SOUGHT TO BE EVADED ON SUCH ADDITION ESTIMATED ON A LLEGED BOGUS 3 ITAS 6821 & 6820/MUM/2018 PURCHASES DISALLOWANCE. ON APPEAL BEFORE CIT(A), T HE PENALTY WAS DELETED. THE LD.CIT(A) DELETED THE PENALTY BY FOLL OWING VARIOUS DECISIONS OF THE TRIBUNAL INCLUDING DCIT VS RISHABH IMPEX GULABDAS & CO IN ITA NO.93/MUM/2011 DATED 10-04-2015 AND SHR UTI FASTNERS LTD VS DCIT 49 CCH 183 (DEL) WHEREIN IT WAS HELD TH AT NO PENALTY IS LEVIABLE ON ESTIMATED ADDITIONS. THUS, AGGRIEVED B Y THE ORDER OF LD.CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 4. NONE APPEARED BEFORE US ON BEHALF OF ASSESSEE DESPI TE SERVICE OF NOTICE OF HEARING OF APPEAL ON THE ASSESSEE. THEREFORE, W E ARE LEFT WITH NO OPTION BUT TO DECIDE THE APPEAL ON THE BASIS OF MAT ERIAL AVAILABLE ON RECORD AND HEARING THE LD. DEPARTMENTAL REPRESENTAT IVE (DR). THE LD .DR SUPPORTED THE ORDER OF AO. THE LD. DR SUBMITS THAT THE AO LEVIED PENALTY ONLY ON THE ADDITION MADE IN THE IMP UGNED ASSESSMENT. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR AND CAR EFULLY GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THERE IS NO DISPUTE THAT IN THE RE-ASSESSMENT, THE AO ESTIMATED THE ADDITION OUT OF THE ALLEGED BOGUS PURCHASES @12.5%. ADMITTEDLY, ADDITION WAS MADE ON ESTIMATE BASIS. THE AO LEVIED PENALTY ON ESTIMATED ADDITIONS. IT IS SETTLED POSITION UNDER THE LAW THE NO PENALTY UNDER SECTION 271(1) I S LEVEABLE ON ESTIMATED ADDITIONS MADE IN THE ASSESSMENT ORDER. WE HAVE NOTED THAT THE LD. CIT(A), DELETED THE PENALTY BY FOLLOWING TH E DECISION OF 4 ITAS 6821 & 6820/MUM/2018 TRIBUNAL IN THE CASE OF DCIT VS RISHABH IMPEX GULA BDAS & CO (SUPRA) AND SHRUTI FASTNERS LTD VS DCIT(SUPRA). NO CONTRARY FACTS OR LAW HAS BEEN BROUGHT TO OUR NOTICE TO TAKE A DIFFER ENT VIEW. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL R AISED BY REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ITA NO.6820/MUM/2018 AY 2010-11 7. THE REVENUE HAS RAISED IDENTICAL GROUNDS OF APPEAL IN THIS APPEAL ALSO, WHICH WE HAVE ALREADY DISMISSED. THEREFORE, FOLLOW ING THE PRINCIPLE OF CONSISTENCY, THE APPEAL FOR AY 2010-11 IS ALSO D ISMISSED FOR SAME REASONS. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 9. AS A RESULT, BOTH THE APPEALS FILED BY THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01-2020. SD/- SD/- (S. RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 15 TH JANUARY, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI