DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE vs. HANUMANT SAHEBRAO PANSARE, PUNE

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ITA 85/PUN/2021Status: DisposedITAT Pune16 November 2022AY 2010-114 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) is not sustainable when it pertains only to a gross profit estimation disallowance, not the entire bogus purchase amount.

What were the facts?

The Assessing Officer disallowed bogus purchases for lack of supporting documents like delivery challans. The disallowance was later restricted to 10% of the gross profit element by the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on a disallowance restricted to gross profit estimation rather than the full quantum of alleged bogus purchases.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A”

Before: SHRI S.S.GODARA & SHRI INTURI RAMA RAO

For Appellant: Shri Kishor B Phadke – AR
For Respondent: Shri Ramnath P Murkunde – DR
Hearing: 07/09/2022Pronounced: 16/11/2022

ORDER

Per S.S.Godara, JM:

1.

This Revenue’s appeal for Assessment Year 2010-11 is directed against the Commissioner of Income Tax(Appeal)-6, Pune’s in case no.PN/CIT(A)-6/10022/2018-19 dated 27.08.2020, in proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short “the Act”]. Heard both the parties. Case file perused.

2.

It emerges at the outset that the relevant facts regarding correctness of the impugned penalty in issue of Rs.4,08,420/- pertaining to quantum disallowance(s) of bogus purchases to the tune of Rs.12,01,591/- are in a very narrow compass. The Assessing

A.Y. 2010-11 (R) Shri Hanuman Sahebrao Pansare Officer’s assessment order dated 03.12.2012 states that although the assessee had shown purchases M/s.Vidhi and Vrushti Trade Private Limited and supported the same by way of purchase bills, but he could not produce the other supportive material in the nature of delivery challans, weighing slips and transportation bills. Rather the department had admittedly come across sufficient material that the assessee’s above stated supplier had defaulted in paying VAT bills as per sales tax department’s intimation. This resulted in the impugned bogus purchase disallowance of Rs.12,01,591/- which ultimately stood restricted @10% of the gross profit element in assessee’s quantum appeal decided on 09.07.2019 in this tribunal.

3.

We now advert to the impugned penalty proceedings wherein both the learned lower authorities hold the assessee to have furnished inaccurate particulars of income. Mr.Murkund could hardly dispute that what remains before us is sec 271(1)(c) penalty regarding only the gross profit estimation disallowance than the entire bogus purchases as per the tribunal’s order (supra).

4.

Faced with this situation, we find merit in assessee’s vehement arguments that such a penalty is not sustainable in an instance involving gross profit estimation. The same is directed to be deleted therefore.

A.Y. 2010-11 (R) Shri Hanuman Sahebrao Pansare

5.

This assessee’s appeal is allowed.

Order pronounced in the open Court on 16th November, 2022.

Sd/- Sd/- (INTURI RAMA RAO) (S.S.GODARA) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 16th Nov, 2022/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, पुणे / DR, ITAT, “A” Bench, Pune. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.

A.Y. 2010-11 (R) Shri Hanuman Sahebrao Pansare

आयकर अपीलीय अिधकरण “ए” �ायपीठ पुणे म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / Assessment Year : 2010-11 The DCIT, Circle-8, Vs Shri Hanumant Sahebrao Pansare, Pune. . Plot No.15B/1, C-1 Block, MIDC, Chinchwade, Pune – 411019. PAN: AANPP 9376 K Appellant/ Revenue Respondent / Assessee CORRIGENDUM This corrigendum is being issued to correct the typographical error in Para No.5 of the order of Tribunal dated 17-11-2022. It is mentioned at the Para No.7 as “5. This assessee’s appeal is allowed.” instead of “5. This Revenue’s appeal is dismissed.” Therefore, the same may be read as “5.This Revenue’s appeal is dismissed.”

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