M/S OM SAI TRADERS,MUMBAI V. THE INCOME TAX OFFICER WARD 3(1), MUMBAI

ITA 6022/MUM/2024

AI Insights

The case involves M/s. Om Sai Traders, who appealed against the penalties imposed for the assessment years 2010-11 and 2011-12, related to the alleged bogus purchases. The Income Tax Officer had treated the entire purchases as bogus and added them to the income of the assessee, leading to penalties based on an estimated GP rate of 12.5%. The tribunal, after reviewing the submissions and evidence, including the fact that the purchases were recorded and corresponding sales were not challenged, decided in favor of the assessee, deleting the penalties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26491 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH PAMNANI
• Assessee Lawyers: SHREYAS SHAH; KUNAL
• Keywords: Bogus purchase; Bogus
• Section: 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT RENU JAUHRI , ACCOUNTANT MEMBER ITA No.6022/Mum/2024 (Assessment Year :2011-12) & ITA No.6023/Mum/2024 (Assessment Year :2010-11) M/s. Om Sai Traders M-12, Room No.13 3rd Floor, Atharva Co-op Housing Society Kashish Park LBS Marg Wagale Estate Thane Vs. The Income Tax Officer Ward 3(1) Thane PAN/GIR No.AAAF09152F (Appellant) .. (Respondent) Assessee by Shri Shreyas Shah & Kunal Shah Revenue by Shri Mahesh Pamnani Date of Hearing 07/01/2025 Date of Pronouncement 09/01/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the assessee against separate impugned order of even date 24/09/2024 passed by NFAC, Delhi in relation to the penalty proceedings u/s. 271(1)(c) for the A.Y.2010-11 & 2011-12. ITA No.6022 ^ 6023/Mum/2024 Om Sai Traders 2 2. The assessee is aggrieved by levy of penalty of Rs.2,89,272/- for the A.Y.2010-11; and Rs.2,07,177/- for the A.Y.2011-12 levied on account of estimated GP rate on alleged bogus purchases. In the assessment order passed by the ld. AO, has treated the entire purchases of Rs.74,89,235/- as bogus and added to the income of the assessee for A.Y.2010-11; and Rs.64,93,318/- for A.Y.2011-12. 3. In the quantum proceedings from the stage of the Tribunal, the addition has been restricted to by applying the GP rate of 12.5% on the alleged bogus purchases as was applied by the ld. CIT (A). Now penalty has been levied on such application of GP rate of 12.5% by the ld. AO holding that assessee has failed to establish that the material has been purchased from the parties and had actually been used for its business. 4. After hearing both the parties and on perusal of the material placed on record, we find that the source of purchases made from the alleged hawala parties are from the books and corresponding sales from such purchases has not been disturbed. Once the purchases are reflected in the trading account and addition has been made by applying some higher GP rate of 12.5% on alleged bogus purchases and that to be on estimated basis, then no penalty can be levied u/s.271(1)(c). Further, in A.Y. 2009-10 it has been stated that on similar application of GP rate on bogus purchases, penalty initiated by the ld. AO was has dropped by him. In any case, it cannot be a case of furnishing of inaccurate particulars of income as held by ITA No.6022 ^ 6023/Mum/2024 Om Sai Traders 3 the ld. AO, because all the particulars of purchases have been shown in the books alongwith corresponding sale. Accordingly, penalty levied by the ld. AO and sustained by the ld. CIT (A) is deleted in both the appeals. 5. In the result, both the appeals of the assessee are allowed. Order pronounced on 9th January,2025. Sd/- (RENU JAUHRI) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 09/01/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "