RAKESHKUMAR AGARWAL, MUMBAI V. ASST CIT 24(1), MUMBAI

ITA 7633/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9236 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: ARATI VISSANJ LD
• Keywords: Bogus purchase; Wrong claim
• Section: 143(3); 133(6)

Judgement Text

ITA NO 7633/MUM/2016 RAKESH KUMAR AGARWAL ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 7633/MUM/2016 ( / ASSESSMENT YEAR: 2010-11) RAKESH KUMAR AGARWAL 139-G S.V.ROAD JOGESHWARI (W) MUMBAI 400 002 / VS. ASSISTANT COMMISSIONER OF INCOME TAX 24(1) 5 TH FLOOR, C-13, PRATYAKSHKAR BHAVAN, BKC,BANDRA MUMBAI -400 051 ! ./ ./PAN/GIR NO. AAAPA-6074-C ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : ARATI VISSANJ, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 04/10/2017 ITA NO 7633/MUM/2016 RAKESH KUMAR AGARWAL ASSESSMENT YEAR 2010-11 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-42 [CIT(A)], MUMBAI DATED 15/09/2016 QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR RS.2,66,241/-. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED AS BUILDER WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 08/03/2013 AT RS.7,66,68,580/- AS AGAINST RETURN ED INCOME OF RS.7,47,25,768/- E-FILED BY THE ASSESSEE ON 04/10/2010. 2.2 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE MADE PURCHASES OF RS.8,61,622/- FROM AN ENTITY NAME LY SACHI MERCANTILE PRIVATE LIMITED, TO WHOM NOTICE SENT U/S 133(6) REMAINED UN- SERVED AND THE PHYSICAL INQUIRY BY THE INSPECTOR AT THE GI VEN ADDRESS REVEALED THAT NO SUCH PARTY WAS AVAILABLE AT THE GI VEN ADDRESS. IT WAS NOTED THAT THE SAID PARTY WAS LISTED AS SUSPICIOUS DEALER AS PER THE WEBSITE INFORMATION OF THE SALES TAX DEPARTMENT, MAHARASHTRA . THE ASSESSEE SUBMITTED THAT IT PURCHASED STEEL FROM THE SAID PARTY WHICH WAS CONSUMED IN THE CONSTRUCTION WORK AND THE PAYME NTS WERE THOUGH BANKING CHANNELS AND THEREFORE, THE PURCHASES WERE GENUINE. HOWEVER, NOT CONVINCED, LD. AO DISALLOWED THE SAME, BEING BOGUS PURCHASES. 2.3 CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED IN THE QUANTUM ASSESSMENT ORDER AND THE ASSESSEE HAS BEEN SADDLED WITH IMPUGNED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 271(1)(C) ITA NO 7633/MUM/2016 RAKESH KUMAR AGARWAL ASSESSMENT YEAR 2010-11 3 VIDE PENALTY ORDER DATED 30/09/2013. THE ASSESSEE C ONTESTED THE SAME WITHOUT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 15/09/2016 . AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. THE LD. COUNSEL FOR ASSESSEE [AR] DREW ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER BOOK AND CONTENDED THAT THE ASSESSEE PURCHASES STEEL DURING APRIL, 2009 FROM THE SAID ALLEGED BOGUS SUPPLIER WHO WAS A CORPORATE ENTITY DULY REGISTERED UNDER TH E COMPANIES ACT ON 16/04/2007. THE PURCHASES MADE BY ASSESSEE WERE SUP PORTED BY DELIVERY CHALLANS AND PAYMENTS WERE THROUGH BANKING CHANNELS. THE MATERIAL PURCHASED BY THE ASSESSEE WAS USED IN THE CONSTRUCTION OF FIRST FLOOR OF BUILDING NO.3 WHOSE OCCUPATION CERTIFICATE WAS GRANTED ON 16/06/2009. THERE WAS NO OTHER PURCHASE OF STEEL FOR THE SAID CONSTRUCTION ACTIVITY AND THE BUILDING COULD NOT BE COMPLETED WITHOUT CONSUMPTION TO MATERIAL. THEREFORE, THE TRANSACTION S WERE GENUINE DULY SUPPORTED BY DOCUMENTARY EVIDENCES. NEVERTHELESS, T HE ASSESSEE ACCEPTED THE ADDITIONS SINCE IT COULD NOT PROVIDE C ONFIRMATION FROM THE SAID PARTY AT THE TIME OF ASSESSMENT AND THE PHYSIC AL INQUIRY REVEALED THAT THE SAID PARTY WAS NOT AVAILABLE AT THE GIVEN ADDRESS. HOWEVER, THE SAME WAS POSSIBLE CONSIDERING THE LONG TIME GAP BET WEEN THE PURCHASES MADE BY THE ASSESSEE AND INQUIRIES CONDUC TED BY THE DEPARTMENT AT THE TIME OF ASSESSMENT. THEREFORE, ME RELY BECAUSE THE ADDITIONS HAS BEEN ACCEPTED, THE SAME DO NOT ENTAIL IMPUGNED PENALTY AS SUPPORTED BY THE JUDGMENT OF HONBLE APEX COURT RENDERED IN CIT VS RELIANCE PETROPRODUCTS PVT LTD [322 ITA 158]. ITA NO 7633/MUM/2016 RAKESH KUMAR AGARWAL ASSESSMENT YEAR 2010-11 4 4. PER CONTRA, LD. DR CONTENDED THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE SAID PURCHASES IN ANY MANNER AND K NOWINGLY MADE A FALSE CLAIM AND THEREFORE, RIGHTLY BEEN SADDLED WIT H IMPUGNED PENALTY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE IS IN POSSESS ION OF PURCHASE INVOICES WHICH ARE SUPPORTED BY DELIVERY CHALLANS A ND THE PAYMENTS ARE THROUGH BANKING CHANNELS. THE PURCHASES WERE MADE F ROM A CORPORATE ENTITY DULY REGISTERED UNDER LAW. THE ASSESSEE HAS PURCHAS ED STEEL FROM THE SAID PARTY WHICH IS A RAW MATERIAL FOR CONSTRUC TION ACTIVITY CARRIED OUT BY THE ASSESSEE. IT IS ALSO A FACT THAT THERE IS CO NSIDERABLE TIME GAP BETWEEN PURCHASES MADE BY THE ASSESSEE AND INQUIRIE S CONDUCTED BY THE INSPECTOR AT THE PREMISES OF THE SUPPLIER. THE TOTALITY OF ABOVE FACTS TILTS THE BALANCE OF CONVENIENCE IN ASSESSEES FAVO R SINCE IT NOT A CASE THAT THE CLAIM OF THE ASSESSEE WAS NOT BONA FIDE OR THE ASSESSEE COULD NOT FURNISH ANY EXPLANATION TO SUBSTANTIATE HIS CLA IM. THEREFORE, FINDING ASSESSEES EXPLANATION A PLAUSIBLE ONE, WE ARE INCL INED TO DELETE THE IMPUGNED PENALTY. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04. 10.2017 SR.PS:- THIRUMALESH ITA NO 7633/MUM/2016 RAKESH KUMAR AGARWAL ASSESSMENT YEAR 2010-11 5 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI