ITO 33 (1)(2), MUMBAI V. BHAVESH KANTILAL SHETH, MUMBAI

ITA 7855/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2002 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 20-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THARIAN OOMMEN
• Keywords: Tax effect
• Section: 271(1)(c); 133(6); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M. BALAGANESH , ACCOUNTANT MEMBER ITA NO. 7855 /MUM/2019 ASSESSMENT Y EAR: 2011 - 12 ITO 33 (1) (2), KAUTILYA BHAVAN, 9 TH FLOOR, ROOM NO. 946 , BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 VS. BHAVESH KANTILAL SHETH, C - 28, BHANU PARK, J.S. ROAD, KANDIVALI (WEST), MUMBAI - 400067 PAN: AADPS3220M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI THARIAN OOMMEN (D R) ASSESSEE BY : SHRI SHYA M SABOO ( A R ) DATE OF HEARING: 05 /05 /20 21 DATE OF PRONOUNCEMENT: 02 / 0 6 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 16.03.2018 OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS) 4 5 , MUM BAI DELETING THE PENALTY IMPOSED OF RS. 85,794/ - U NDER SECTION 271(1)(C) OF THE INCOME TAX ACT , 1961 FOR THE ASSESSMENT YEAR 2011 - 12 . 2 . BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE BUSINESS OF DEALING IN PHARMACEUTICALS, RAW MATERIAL, CHEMICAL ETC. FOR THE ASSESSMENT YEAR UNDER DISPUTE , THE ASSESSEE FILED HIS RETURN OF INCOME ON 16.09.2011 DECLARING INCOME OF RS. 8,77,317/ - . IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) NOTICE D THAT AS PER INFORMATION RECEIVED FROM SALES T AX D EPARTMENT, GOVT. OF MAHARASHTRA , PURCHASES WORTH RS. 22,21,202/ - CLAIMED TO HAVE BEEN MADE FROM THREE PARTIES DURING THE YEAR ARE NON GENUINE AS THE CONCERNED PART IES HAVE BEEN IDENTIFIED AS HAW ALA OPERATORS PROVIDING ACCOMMODATION BILLS. THOUGH, THE ASSESSEE SUBMITTED CERTAIN 2 ITA NO. 7855 / MUM/2019 ASSESSMENT YEAR: 201 1 - 1 2 DOCUMENTARY EVIDENCES TO SUBSTANTIATE HIS CLAIM THAT PURCHASES MADE ARE GENUINE , H OWEVER, THE A O WAS NOT CONVINCED. ULTIMATELY, HE TREATED THE DISPUTED PURCHASES AS NON GEN UINE AND DISALLOWED THEM. THE ASSESSEE CONTESTED THE AFORESAID DISALLOWANCE BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD , LEARNED COMMISSIONER (APPEALS) RESTRICTED T HE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. HOWEVER, ON THE BASIS OF DISALLOWANCE SUSTAINED BY LEARNED COMMISSIONER (APPEALS), THE ASSESSING OFFICER INITIATED PROCEED ING FOR IMPOSITION OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT AND UL TIMATELY PASSED AN ORDER IMPOSING PENALTY OF RS. 85,794/ - ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME. AGAINST THE PENALTY ORDER SO PASSED , ASSESSEE PREFERRED AN APPEAL BEFORE LEARNED COMMISSIONER (APPEALS) . BEING CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) DELETED THE PENALTY IMPOSED. 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. A PERUSAL OF THE IMPUGNED ASSESSMENT ORDER WOULD MAKE IT CLEAR THAT THE ASSESSING OFFICER WHILE DISAL LOWING THE PURCHASES HAS PRIMARILY RELIED UPON THE INFORMATION RECEIVED FROM THE SALES T AX D EPARTMENT, GOVT. OF MAHARASHTRA. THE ASSESSING OFFICER ON HIS OWN HAS NOT MADE THOROUGH ENQUIRY TO AS CERTAIN THE GENUINENESS OF THE PURCHASES EXCEPT ISSUING NOTICE U NDER SECTION 133(6) OF THE ACT. IT IS FURTHER EVIDENT , WHILE DECIDING ASSESSEES APPEAL IN THE QUANTUM PROCEEDINGS, LEARNED COMMISSIONER (APPEALS) , TAKING NOTE OF THE FACT THAT THE DOUBT IS ONLY WITH REGARD TO SOURCE OF PURCHASES AND NOT THE PURCHASE ITSE LF , HAS RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING AT 12.5%. THUS, AS COULD BE SEEN FROM THE A FORESAID FACTS, THE ADDITION ON THE BASIS OF WHICH PENALTY U NDER SECTION 271(1)(C) OF THE ACT HAS BEEN IMPOSED IS BY ENTERTAINING DOUBT A ND SUSPICIO N WITH RE GARD TO THE SOURCE OF PURCHASES, T HEREFORE, THE ESTIMATED ADDITION HAS BEEN MADE. IT IS ALSO A FACT ON RECORD THAT THE ASSESSEE HA D FURNISHED CERTAIN DOCUMENTARY EVIDENCES TO PROVE THE PURCHASES. MOREOVER, THE PAY MENT FOR SUCH PURCHASES WAS MADE THROUGH BANKING CHANNEL. THAT BEING THE CASE , IN OUR CONSIDERED 3 ITA NO. 7855 / MUM/2019 ASSESSMENT YEAR: 201 1 - 1 2 VIEW, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE ACT AS THE ADDITION IS ON THE BASIS OF AN EST IMATE AND THERE ARE NO CONCRETE EVIDENCES TH AT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED HIS INCOME . ACCORDINGLY, WE UPHOLD THE DECISIONS OF LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS. 4. THERE IS ONE MORE ASP ECT TO THIS APPEAL. ADMITTEDLY, THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT OF RS. 50 LACS. HENCE, AS PER CIRCULAR NO. 17 OF 2019 DATED 8 TH AUGUST 2019 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES ( CBDT), THE APPEAL IS NOT MAINTAINABLE. IN OUR VIEW, THE PRESENT APPEAL WOULD NOT BE PROTECTED BY ANY OF THE EXCEPTIONS PROVIDED TO THE AFORESAID CIRCULAR AS THE PENALTY PROCEEDING IS COMPLETELY INDEPENDENT OF ASSESSMENT PROCEEDINGS. HENCE, IT CANNOT BE SAI D THAT IT IS BASED ON ANY INFORMATION RECEIVED FROM EXTERNAL AGENCIES. THEREFORE, FOR THIS REASON ALSO THE APPEAL IS LIABLE TO BE DISMISSED. ACCORDINGLY, WE DO SO. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JUNE , 2021 . SD/ - SD/ - ( M. BALAGANESH ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 02 / 0 6 /202 1 ALINDRA, PS 4 ITA NO. 7855 / MUM/2019 ASSESSMENT YEAR: 201 1 - 1 2 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDE R / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI