SHRI. SALIM E PETIWALA , MUMBAI V. ITO 17 (3)(2), MUMBAI

ITA 6922/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0023 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 11-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY KUMAR MENON
• Keywords: Bogus purchase
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , E BENCH MUMBAI BEFORE : SHRI C.N. PRASAD, JM & SHRI M.BALAGANESH, AM ITA NO. 6922 /MUM/ 20 19 ( ASSESSMENT YEAR : 201 0 - 1 1 ) SHRI SALIM E PETIWALA R. NO.26/27, 1 ST FLOOR EBRAHIM MANZIL 5, NABIULLA RO AD NEAR SAITEE AMBULANCE MUMBAI 400 003 VS. ITO - 17(3)(2) 1 ST FLOOR, KAUTILYA BHAVAN BANDRA KURLA COMPLEX MUMBAI 400 051 PAN/GIR NO. AABPB2749L (APPELLANT ) .. (RESPONDENT ) REVENUE BY NONE ASSESSEE BY SHRI VIJAY KUMAR MENON DATE OF HEARING 15 / 03 /202 1 DATE OF PRONOUNCEMENT 15 / 03 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6922/MUM/2019 FOR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 28, MUMBAI IN APPEAL NO. CI T(A) - 28/ITBA - 10002/ITO - 17(3)(2)/2018 - 19 DATED 13/04/2018 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO . 6922/MUM/2019 SHRI SALIM E PETIWALA 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED I N UPHOLDING LEVY OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT IN RESPECT OF ESTIMATED ADDITION SUSTAINED ON ACCOUNT OF BOGUS PURCHASES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD THE LD. DR AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE QUANTUM PROCEEDINGS, THIS TRIBUNAL VIDE ORDER DATED 29/02/2017 HAD RESTRICTED ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES TO 12.5% OF VALUE THEREON BY TAXING THE PROFIT TO THE TUNE OF RS.5,87,155 / - . WE FIND THAT THE LD. AO HAD LEVIED PENALTY OF RS.1,81,431/ - U/S.271(1)(C) OF THE ACT IN RESPECT OF THIS SUSTAINED ADDITION. EVEN THOUGH THIS TRIBUNAL HAD SUSTAINED THE QUANTUM ADDITION TO THE EXTENT OF 12.5% OF VALUE OF TAINTED PURCHASES, IT CANNOT BE BRU SHED ASIDE THAT THE SAID ADDITION HAD BEEN MADE ON AN ESTIMATED BASIS ON THE POSSIBLE PREMISE THAT ASSESSEE COULD HAVE MADE PURCHASES IN THE GREY MARKET IN ORDER TO HAVE SOME SAVINGS IN INDIRECT TAXES AND INCIDENTAL PROFIT ELEMENT THEREON. SUCH PROFIT ELEM ENT HAD BEEN ESTIMATED @12.5% OF VALUE OF TAINTED PURCHASES AND BROUGHT TO TAX IN THE QUANTUM PROCEEDINGS. THERE COULD NOT BE ANY CONSCIOUS CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME THAT COULD BE ATTRIBUTED TO THE ASSESSEE IN THIS REGARD, WARRANTING LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. IT IS TRITE LAW THAT NO PENALTY U/S.271(1)(C) OF THE ACT COULD BE LEVIED ON AN ADDITION WHICH HAS BEEN MADE ON AN ESTIMATED BASIS. HENCE, WE HEREBY DIRECT THE LD. AO TO DELETE THE PENALTY U/S.27 1(1)(C) OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO . 6922/MUM/2019 SHRI SALIM E PETIWALA 3 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 / 03 /202 1 . SD/ - ( C.N. PRASAD ) SD/ - (M.BALA GANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 03 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD F ILE. //TRUE COPY//