ACIT 6 (2)(2), MUMBAI V. ENGINEERING & CHEMICAL (INDIA) PVT. LTD., MUMBAI

ITA 7203/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1738 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 14-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Bogus purchase; Tax effect; Set aside
• Section: 271(1)(c); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD , HONBLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HONBLE ACCOUNTANT MEMBER ITA NO . 7203 /MUM/201 8 ( A.Y: 20 10 - 11) ASST. COMMISSIONER OF INCOME - TAX RANGE 6(2)(2) ROOM NO. 504, 5 TH FLOOR AAYAKAR BHAVAN, M .K. ROAD MUMBAI 400 020 V. M/S. ENGINEERING & CHEMICAL (INDIA) PVT. LTD., 10, PENINSULA CENTRE S.S. RAO ROAD OFF AMBEDKAR ROAD, PAREL MUMBAI 400 012 PAN: AA BC E 1545L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI AMIT PRATAP SINGH DATE OF HEARING : 09 .12.2019 DATE OF PRONOUNCEMENT : 09 .12.2019 O R D E R PER C.N. PRASAD (JM) THIS APPEAL IS FILED BY THE R EVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 12 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 18.09.2018 FOR THE ASSESSMENT YEAR 2010 - 11 . 2. THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOWING GROUNDS : - ' 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) 2 ITA NO. 7203/MUM/2018 (A.Y: 20 10 - 11) M/S. ENGINEERING & CHEMICAL (INDIA) PVT. LTD., OF THE ACT AMOUNTING TO RS. 1,32,558 / - BY NOT APPRECIATING THAT THE ASSESSEE HAD CLEARLY FURNISH ED INACCURATE PARTICULARS OF INCOME LEADING TO LEVY OF PENALTY AND THE QUANTUM ADDITION MADE BY THE AO ON ACCOUNT OF BOGUS BILL PURCHASES FROM PARTIES BASED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT HAS BEEN ACCE PTED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, ID CIT(A) HAS ERRED IN DELETING THE PENALTY IGNORING THAT THE INFORMATION ON ACCOUNT OF BOGUS PURCHASES IS RECEIVED FROM THE EXTERNAL AGENCY THAT THE ASSESSEE HAD RECE IVED ACCOMMODATION ENTRY. 3 . THOUGH THE TAX EFFECT IN THIS CASE IS RS. 1,32,558/ - HOWEVER, THIS APPEAL BEEN FILED BECAUSE IT IS COVERED BY EXCEPTION MENTIONED IN PARA 10(E) O F CBDT CIRCULAR NO 3/2018 DID 11/7/2018 AS SUBSEQUENTLY CLARIFIED BY LETTER DID 20/08/2018 VIDE NO 279/MISC./ 142/2007 - ITJ (PT.) 4. 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT( APPEALS) ON THE ABOVE G ROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED.' 5. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR TO SUBMIT ADDITIONAL NEW GROUND, WHICH MAY BE NECESSARY.' 3. AT THE TIME OF HEARING, WHEN IT WAS POINTED OUT TO THE LD. DR THAT THE REVENUE EFFECT IN THIS APPEAL IS BELOW .50 LAKHS THE LD. DR THOUGH AGREED THAT TAX EFFECT ON THE ISSUE IN THE PRESENT APPEAL IS BELOW . 5 0 LAC S AND IN VIEW OF THE CBDT CIRCULAR N O . 17/2019 DATED 08.08.2019 IN F.NO.279/MISC.142/2007 - ITJ (PT) , THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE , IT IS SUBMITTED THAT THIS APPEAL IS FILED AGAINST DELETION OF PENALTY OF . 1,32,558 / - LEVIED U/S. 271(1)(C) OF THE ACT ON THE DISALLOWANCE MADE TOWARDS BOGUS PURCHASES. 4. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE GROUNDS OF APPEAL IN THIS APPEAL. WE FIND THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN 3 ITA NO. 7203/MUM/2018 (A.Y: 20 10 - 11) M/S. ENGINEERING & CHEMICAL (INDIA) PVT. LTD., .5 0 LAKHS AND T HEREFORE THE APPEAL OF THE R EVENUE IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. WE ALSO OBSERVE THAT SINCE THE ISSUE IS IN RESPECT OF LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT NONE OF THE EXCEPTION S IN THE CIRCULAR ARE APPLICABLE. HENCE TH IS APPEAL IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE R EVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 09 TH DECEMBER , 2019 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 09 / 12/ 2019 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM