MR.M.K.BINDROO,MUMBAI vs. ITO 24 (2)(4), MUMBAI

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ITA 5597/MUM/2018Status: DisposedITAT Mumbai02 June 2021AY 2012-133 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee offered income on a presumptive basis, which was accepted by the AO, the penalty could not be levied. The Tribunal relied on a precedent where penalty was not leviable when income was determined on an estimation basis.

What were the facts?

The assessee, a dealer of Kashmiri Shawls, claimed a business loss but failed to provide supporting evidence. The Assessing Officer disallowed the loss and computed income on a presumptive basis under Section 44AD, leading to a penalty. The CIT(A) confirmed this penalty.

What were the issues?

The primary issue was whether a penalty under Section 271(1)(c) could be levied when the assessee's income was determined on a presumptive basis after initial disallowance of claimed expenses.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 44AD,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Shri Bharat Andhale– Ld. Sr. DR

Mahavir Singh (Vice President)

1.

In this appeal for Assessment Year (AY) 2012-13, the assessee is aggrieved by confirmation of penalty of Rs.1,55,766/- u/s 271(1)(c) by Ld. Commissioner of Income-Tax (Appeals)-36, Mumbai, [in short referred to as ‘CIT(A)’] vide impugned order dated 21/05/2018. The assessment for the year was framed by Ld. Assessing Officer (AO) u/s 143(3) on 27/03/2015 determining the income at Rs.16.41 Lacs as against returned income of Rs.10.89 Lacs.

2.

During hearing, none appeared for assessee. However, the material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for dismissal of the appeal.

3.

Facts leading to levy of penalty are that the assessee is a dealer of Kashmiri Shawls and it reflected business loss of Rs.4.90 Lacs. However, since no supporting evidences were furnished towards claim of expenditure, the loss was disallowed and the income was computed on presumptive basis u/s 44AD. Consequently, the assessee was saddled with impugned penalty of Rs.1.55 Lacs u/s 271(1)(c) vide order dated 28/09/2015. The penalty, upon confirmation by Ld. CIT(A), is in further challenge before us.

4.

After going through the factual matrix, we find that the assessee had furnished its revised computation of income and offered the income on presumptive basis @8% during assessment proceedings. The same has ultimately been accepted by Ld.AO. Under these circumstances, the penalty could not be levied as held by Amritsar Tribunal in M/s Roop Sons & Co. V/s ITO (ITA No.683/Asr/2013 dated 26/02/2014), the copy of which is on record. The bench, under identical factual matrix, noted that penalty would not be leviable since income was determined purely on estimation basis. We concur with the same and accordingly, delete the penalty as levied by Ld. AO.

5.

The appeal stands allowed. Order pronounced on 02nd June, 2021. 3 (Manoj Kumar Aggarwal) (Mahavir Singh) लेखा दस्य / Accountant Member उपाध्यक्ष / Vice President मुिंबई Mumbai; सदनािंक Dated : 02/06/2021 Sr.PS, Jaisy Varghese आदेशकीप्रधिधलधपअग्रेधर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) आयकरआयुक्त/ CIT– concerned 4. सवभागीयप्रसतसनसध, आयकरअपीलीयअसधकरण, मुिंबई/ DR, ITAT, Mumbai 5. 6. गार्डफाईल / Guard File

आदेशाि सार/ BY ORDER,

उप/सहायक पुंजीकार (Dy./Asstt.

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