ITO 21 (1)(2), MUMBAI V. ARTI SANJIV MALVIYA, MUMBAI

ITA 6915/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALD
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 6915/MUM/2018 ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER-21(1)(2), MUMBAI VS. ARTI SANJIV MALVIYA, 5 C, JAYENDRA BHAVAN-35, S.K.BHOLE ROAD, DADAR(W), MUMBAI [PAN : AHOPM4266B] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.MICHAEL JERALD, DR RESPONDENT BY : NONE DATE OF HEARING : 19-12-2019 DATE OF PRONOUNCEMENT : 20-12-2019 O R D E R PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-33, MUMBA I, DATED 10-09-2018 FOR THE AY.2009-10, DELETING PENALTY LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREIN AFT ER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECOR DS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF CORPORATE GOODS. ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, MAHARASHTRA, THE ASSESSMENT FOR THE AY.2009- 10 WAS RE-OPENED. IN RE-ASSESSMENT PROCEEDINGS, THE A DDITION OF RS.4,32,460/- WAS MADE ON ACCOUNT OF BOGUS PURCHA SES ITA NO. 6915/MUM/2018 : 2 : FROM DECLARED HAWALA DEALERS. THE ASSESSING OFFICER (AO) INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE A CT AS WELL. THE AO LEVIED PENALTY OF RS.1,03,575/- VIDE ORDER DT.22-09-2015. AGGRIEVED AGAINST THE ORDER LEVYING PENALTY U/S.271 (1)(C) OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A ). 3. THE CIT(A) VIDE IMPUGNED ORDER, DELETED PENALTY ON THE GROUND THAT THE PENALTY WAS LEVIED ON THE ADDITION, BASE D ON ESTIMATION. AGAINST THE ORDER OF FIRST APPELLATE AUTHORITY (FAA), T HE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. SHRI S.MICHAEL JERALD, REPRESENTING THE DEPARTMENT, SUBMITTED THAT THE ASSESSEE HAD INDULGED IN BOGUS PURCHA SES FROM HAWALA DEALERS. THE ASSESSEE COULD NOT PROVE GENUINENESS OF THE PURCHASES AND THE DEALERS. HENCE, ADDITION OF RS.4,32,460/- WAS MADE BY THE AO. ASSESS EE HAS ACCEPTED THE ADDITION. CONSEQUENTLY, PENALTY PROCEEDI NGS WERE INITIATED AND PENALTY WAS LEVIED U/S.271(1)(C) O F THE ACT IN RESPECT OF THE ADDITION ADMITTED BY THE ASSESSEE. THE LD.DR PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND CONF IRMING THE PENALTY ORDER. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. 6. WE HAVE HEARD LD.DR AND HAVE EXAMINED DOCUMENTS AVAILABLE ON RECORD. IT IS A WELL SETTLED LAW THAT PENAL TY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE TWO INDEP ENDENT PROCEEDINGS. EVERY ADDITION MADE DURING ASSESSMENT ITA NO. 6915/MUM/2018 : 3 : PROCEEDINGS DOES NOT NECESSARILY RESULT IN ATTRACTING P ENALTY U/S.271(1)(C) OF THE ACT. IN THE INSTANT CASE, ADDITION IN ASSESSMENT PROCEEDINGS HAS BEEN MADE MERELY ON ESTIMATIONS. THE AO HAS ESTIMATED GROSS PROFIT (GP) @16 .71% ON UN-PROVED PURCHASES. THE ASSESSEE IN ORDER TO PRO VE GENUINENESS OF PURCHASES, HAS PRODUCED LEDGER ACCOU NTS OF THE PURCHASERS, COPIES OF INVOICES, DELIVERY CHALLAN S AND BANK STATEMENTS DULY REFLECTING THE PAYMENTS MADE BY ACCOUNT PAYEE CHEQUES, ETC. THE AO HAS NOT RAISED ANY DOUBT OVER THE GENUINENESS OF THE DOCUMENTS PRODUCED BY THE ASSESS EE. NO DETAILED ENQUIRY WAS CONDUCTED BY THE AO TO REBUT THE EVIDENCES FURNISHED BY THE ASSESSEE. WE FURTHER OBSER VE THAT THE SALES MADE BY ASSESSEE HAVE NOT BEEN DISPUTED BY TH E AO. WITHOUT PURCHASES, THERE CANNOT BE SALES. THE AO ESTIMATED GP ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE DEALERS. IT MAY BE A GOOD GROUND FOR MAK ING THE ADDITION ON MERITS, BUT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. THE PENALTY CANNOT BE ON A DDITION MADE ON ESTIMATION. WE FIND THAT THE ORDER OF CIT(A) IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT IS FAIR AND REASONABLE. NO INTERFERENCE IN THE IMPUGNED ORDER IS WARRANTED. HENCE, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 20 TH DAY OF DECEMBER, 2019 SD/- SD/ - (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /MUMBAI; /DATED : 20-12-2019 TNMM ITA NO. 6915/MUM/2018 : 4 : / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #!' / THE RESPONDENT 3. $ % ( ) / THE CIT(A), MUMBAI 4. $ % / CIT, MUMBAI 5. ()* +, , $ .+, $/ , / DR, ITAT, MUMBAI 6. *012 / GUARD FILE $ / BY ORDER, # //TRUE COPY// / $ (DY./ASST. REGISTRAR) $ .+, $/, / ITAT, MUMBAI