ITO 12 (1)91), MUMBAI V. M/S AMI RIDDHI CHEN PVT LTD., MUMBAI

ITA 7617/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7964 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Bogus purchase
• Section: 271(1)(c); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE SHRI PRAMOD KUMAR , HONBLE VICE PRESIDENT AND SHRI SAKTIJIT DEY , HONBLE JUDICIAL MEMBER ITA NO. 7617 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 INCOME TAX OFFICER 12(1)(1), ROOM NO. 129, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S AMI RIDDHI CHEM PVT. LTD., OFFICE NO. 3, GIKUL APARTMENTS, HARIDAS NAGAR, SHIMPOLI ROAD, BORIVALI (WEST), MUMBAI - 400092 PAN: AAGCA7111H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI BRA JENDRA KUMAR (D R) ASSESSEE BY : SHRI AJAY SINGH (AR) DATE OF HEARING: 22/07 /20 21 DATE OF PRONOUNCEMENT: 06 / 08 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 25.09.2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 20 , MUMBAI DELETING THE PEN ALTY IMPOSED OF RS. 11,38,118 / - UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT , 1961 FOR THE ASSESSMENT YEAR 2010 - 11 . 3. BRIEFLY THE FACTS ARE, THE ASSESSEE , A RE SIDENT COMPANY, IS STATED TO BE ENGAGED IN THE BUSINESS OF IMPORTERS AND TRADERS IN P HARMACEUTICAL RAW MAT ERIALS, FINE CHEMICALS, SOLVENT DRUGS, INTERMEDIATES AND TRADING IN SHARES AND S ECURITIES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED I TS RETURN OF INCOME ON 19.08.2010 DECLARING TOTAL INCOME OF RS. 10,43,980 / - . SUBSEQUENTLY, BASED ON INFORMATION RECEIVED FROM SALES TAX AUTHORITIES INDICATING THAT THE ASSESSEE IS A BENEFICIARY ACCOMMODATION BILLS PROVIDED BY WAY OF BOGUS PURCHASES AMOUNTI NG TO RS. 4,60,40,356 / - , T HE ASSESSING OFFICER 2 ITA NO. 7617 / MUM/2019 ASSESSMENT YEAR: 20 10 - 1 1 (AO) REOPEN ED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE AFORESAID PUR CHASES. THOUGH, THE ASSESSEE FURNISH ED SOME EVIDENCES T O CLAIM THE PURCHASE AS GENUINE, HOWEVER, REJECTING AS SESSEES CLAIM THE AO COMPLETED THE ASSESSMENT BY TREATING THE PURCHASE S OF RS. 4,60,40,356 / - , AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE . OF COURSE, THE ASSESSING OF FICER MADE COUPLE OF OTHER ADDITIONS AS WELL. ASSESSEE CONTESTED THE AFORESAID ADDITIONS BEFORE LEARNED COMMISSIONER (APPEALS). PARTLY ACCEPTIN G THE CLAIM OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT EMB EDDED IN THE ALLEGED NON GENUINE PURCHASES BY ESTIMATING AT 8 %. THUS, HE SUSTAINED THE ADDITION TO THE EXTENT OF RS . 38,26,419 / - . BASED ON ADDITION SUSTAINED BY LEARNED COMMISSIONER (APPEAL S), THE AO INITIATED PROCEEDING FOR IMPOSITION OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT AND ULTIMATELY PASSED A N ORDER IMPOSING PENALTY OF RS. 11,82,364 / - ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME. WHILE CONSIDERING ASS ESSEES APPEAL ON THE ISSUE, LEARNED COMMISSIONER (APPEALS) DELETED THE PENALTY IMPOS ED ON THE ADDITION OF NON - GENUINE PURCHASES AMOUNTING TO RS. 36,83,228/ . WHEREAS, HE SUSTAINED PENALTY IMPOSED ON THE ADDITION MADE OF RS. 1,43,191/ , BEING THE DIFFERENCE BETWEEN THE LEDGERS OF THE ASSESSEE AND THE CREDITORS. 4. WE HAVE C ONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IT IS EVIDENT , THOUGH , THE AO HAS DISALLOWED CERTAIN PURCHASES MADE BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION BY RELYING UPON THE INFORMATION RECEIV ED FROM SALES TAX AUTHORITIES, HOWEVER, LEARNED COMMI SSIONER (APPEALS) ON EXAMINATION OF FACTS AND MATERIALS ON RECORD WAS CONVINCED THAT THE DISPUTED GOODS , INDEED , WERE PURCHASED BY THE ASS ESSEE. THUS, HE WAS OF THE VIEW THAT WHAT IS IN DOUBT IS THE SOURCE OF PURCHASES. FOR THIS REASON ALONE, HE RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON - GENUINE PURCHASES BY ESTIMATING AT 8 %. THUS, IT IS VERY MUCH CLEAR THAT THE ADDITION LEADING TO THE IMPOSITION OF PENALTY WAS MADE PURELY ON ESTIMATE BASIS BY ENTERTAINING SOME DOUBT REGAR DING THE SOURCE OF PU RCHASES. THEREFORE, 3 ITA NO. 7617 / MUM/2019 ASSESSMENT YEAR: 20 10 - 1 1 SUCH ESTIMATED ADDITION , IN OUR VIEW , CANNOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THAT BEING THE CASE, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT TO THAT EXTENT . 6. IN THE RESULT, APPEAL IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST , 2021 . SD/ - SD/ - ( PRAMOD KUMAR ) VICE PRESIDENT (SAKTIJIT DEY) JUDICI AL MEMBER MUMBAI ; DATED: 06 / 08 /2021 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CI T(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI