M/s G G Alloys & Metals, Mandi Gobindgarh V. ITO, W-1, Mandi Gobindgarh

ITA 761/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3810 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA
• Section: 271(1)(c)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 761/CHD/2018 / ASSESSMENT YEAR : 2008-09 M/S G.G. ALLOYS & METALS, G.T. ROAD, MANDI GOBINDGARH, PUNJAB THE ITO, WARD 1, MANDI GOBINDGARH ./PAN NO: AAHFG2637C / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. AJAY JAIN, CA ' ! / REVENUE BY : SH. ANKUR ALYA, SR.DR # $ % /DATE OF HEARING : 14.11.2018 &'() % / DATE OF PRONOUNCEMENT : 30 .01 2019 ')/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 25.4.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS), PATIALA [HEREINAFTER REFERRED TO AS CIT(A)] AGITAT ING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'TH E ACT'). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELL ANT FIRM WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL INGOTS. DURI NG THE YEAR UNDER CONSIDERATION, THE ASSESSEE FIRM HAD PURCHASED PIG IRON AMOUNTING TO RS. 68,20,608/- FROM M/S ROHIT ISPAT (INDIA), MANDI GOB INDGARH. THE INCOME TAX DEPARTMENT HAS RECEIVED INFORMATION FROM CENTRA L EXCISE THAT M/S ROHIT ISPAT WAS INDULGING IN PAPER TRANSACTIONS AN D NOT ACTUALLY ITA NO. 761/CHD/2018- M/S G.G. ALLOYS & METALS, MANDI GOBINDGARH 2 CONDUCTING ANY BUSINESS. FURTHER, THE CENTRAL EXCIS E AUTHORITY HAS SENT THE INFORMATION TO ASSESSING OFFICERS OF CUSTOMERS WHO PURCHASED STEEL INGOTS FROM M/S ROHIT ISPAT. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION FROM CENTRAL EXCISE TREATED THE PURCHASES FROM M/S ROHIT ISPAT AS BOGUS AND ESTIMATED THE INCOME BY APPLYING THE GP AT 3.02% & MADE ADDITION OF RS 26,76,315/-. FURTHER, ASSESSING OFFICER HAS MADE ADDITION OF RS 23,20,698/- ON ACCOUNT OF CREDIT BALANCE OUTSTANDIN G AGAINST M/S ROHIT ISPAT (INDIA) MANDI GOBINDGARH. THE CIT(A) HAS REDU CED THE ESTIMATED INCOME TO RS 20,00,000/- AGAINST ADDITION OF RS 26, 76,315/- AND SUSTAINED ADDITION ON ACCOUNT OF CREDIT BALANCE. THE ITAT IN APPEAL NO. 73/CHD/2015 HAS ALLOWED THE BENEFIT OF TELESCOPING & ALLOWED RELIEF OF RS. 20 LAKHS AND CONFIRMED THE ADDITION OF RS 23,20,698 /- AFTER PLACING RELIANCE ON THE JUDGEMENT OF NORTHERN INDIA STEEL ROLLING MILLS VS DCIT ITA NO. 591/CHD/2014. 3. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDI NGS AND LEVIED A PENALTY OF RS. 13,35,095/- ON THE ASSESSEE WHICH W AS 100% OF THE TAX SOUGHT TO BE EVADED ON ADDITION OF THE INCOME OF RS. 43,20,558/-. 4. IN APPEAL, THE LD. CIT(A) CONSIDERING THE DECISI ON OF THE ITAT THAT SINCE THE ITAT IN THE QUANTUM ADDITION HAD DELETED THE ADDITION OF RS. 20 LACS ON ACCOUNT OF ESTIMATED GP ADDITION, HE DELET ED THE PENALTY ATTRIBUTABLE TO THE SAID AMOUNT. THE LD. COMMISSION ER ALSO DELETED THE PENALTY ATTRIBUTABLE TO THE ADDITION OF RS. 60,000/ - HOLDING THAT SINCE THE SAID ADDITION WAS MADE ON ESTIMATION BASIS AND THER E WAS NO CLINCHING EVIDENCE AGAINST THE ASSESSEE OF CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, HOWEVER, WITH REF ERENCE TO THE PENALTY ITA NO. 761/CHD/2018- M/S G.G. ALLOYS & METALS, MANDI GOBINDGARH 3 ATTRIBUTABLE TO THE ADDITION OF RS. 23,20,698/, MAD E ON ACCOUNT OF BOGUS CREDIT BALANCES IN THE NAME OF ROHIT ISPAT (INDIA), MANDI GOBIDGARH, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSE SSING OFFICER ON THIS ISSUE. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE ADDITION IN THIS CASE WAS MADE DOUBTING THE PURCHAS ES MADE BY THE ASSESSEE FROM M/S ROHIT ISPAT (INDIA), MANDI GOBI NDGARH ON THE BASIS OF THE REPORT OF THE EXCISE AUTHORITIES. HOWEVER, LATE R ON THE CENTRAL EXCISE & SERVICE TAX APPELLATE TRIBUNAL (CESTAT) VIDE ITS ORDER DATED 29.8.2016 PASSED IN APPEAL NO. A/61246-61254/2016 VIDE PARA 6 HELD AS UNDER:- 'IN THESE CASES, THE DEPARTMENT SOUGHT TO DENY CENV AT CREDIT TO THE APPELLANTS ON THE BASIS OF FACT THAT THE REGISTERED DEALER FROM WHOM THE GOODS HAVE BEEN PROCURED BY THE APPELLANTS FOUND TO BE NON EXISTENT . IT IS NOT THE CASE OF THE DEPARTMENT THAT THE APPELLANTS HAVE NOT RECEIVED THE GOODS. IN FACT, NO INVESTIGATION H AS BEEN CONDUCTED AT THE END OF THE APPELLANTS TO ASCERTAIN THEY HAVE RECEIVED THE GOODS OR NOT. THE REVENUE HAS NOT MADE ANY INVESTIGATION AT THE END OF THE MANUFACTUR ER SUPPLIER OF THE GOODS. NO INVESTIGATION WAS CONDUCT ED AT THE TRANSPORTER OF THE GOODS OR AT THE PREMISES OF THE APPELLANTS TO REVEAL THE TRUTH. NO CROSS EXAMINATIO N OF THE REGISTERED DEALER WAS GRANTED TO THE APPELLANTS TO REVEAL THE TRUTH. IN THESE CIRCUMSTANCES, CENVAT CR EDIT CANNOT BE DENIED TO THE APPELLANTS ON THE BASIS OF DEFICIENT INVESTIGATION. 6. THE HON'BLE DELHI BENCH OF THE TRIBUNAL IN THE C ASE OF M/S RAJEEV ALLOYS LTD VS. DCIT, ITA NO. 6326/DEL/2014 DATED 5.4.2018 TAKING NOTE OF THE AFORESAID ORDER OF THE TRIBUNAL UNDER SOMEWH AT SIMILAR CIRCUMSTANCES DELETED THE PENALTY LEVIED BY THE ASS ESSING OFFICER OBSERVING AS UNDER:- ITA NO. 761/CHD/2018- M/S G.G. ALLOYS & METALS, MANDI GOBINDGARH 4 14. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE FINDINGS OF THE CUSTOMS & CENTRAL EXCISE DEPARTMENT QUA M/S ROHIT ISPAT INDIA BEING A NON-EXISTENCE ENTITY ARE NO MORE IN EXISTENCE, THE QUESTION OF FURNISHING INACCURATE PARTICULARS BY CONCEALING THE PARTICULARS OF INCOME DOES NOT ARISES. 7. FURTHER, THE COORDINATE BENCH OF THE TRIBUNAL IN ANOTHER CASE OF M/S TAKSUS STEELS PVT LTD VS. ACIT ORDER DATED 4.12. 2017 PASSED IN ITA NO. 967/CHD/2016, WHEREIN, THE ADDITIONS WERE MADE BY T HE ASSESSING OFFICER BECAUSE HE DOUBTED CERTAIN PURCHASES MADE FROM THE SAME ENTITY I.E. M/S ROHIT ISPAT (INDIA), MANDI GOBINDGARH, THE TRIBUNA L TAKING NOTE OF THE FACT THAT THE SAID ADDITION HAVE BEEN MADE IN THAT CASE ON THE BASIS OF SUSPICION THAT THE PURCHASES MADE BY THE ASSESSEE F ROM M/S ROHIT ISPAT (INDIA) WERE BOGUS, DELETED THE PENALTY OBSERVING T HAT IN THE PENALTY PROCEEDINGS, THE CHARGES THAT THE ASSESSEE HAS CONC EALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME HAVE TO BE ESTABLISHED WITH EVIDENCE ON FILE. HENCE, THE PENALTY U/S 271(1)(C) WAS NOT LEVIABLE MERELY BECAUSE SOME ADDITIONS HAVE BEEN MADE INTO THE INC OME OF THE ASSESSEE. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT THINK TH AT THIS IS A FIT CASE FOR LEVY OF THE PENALTY U/S 271(1)(C) OF THE ACT AN D THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30.01.2019. SD/ SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.01.2019 .. ITA NO. 761/CHD/2018- M/S G.G. ALLOYS & METALS, MANDI GOBINDGARH 5 '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR