VIJAYAN P.MEPARAMBA,MUMBAI vs. ITO- 26(3)(4), MUMBAI

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ITA 1844/MUM/2019Status: DisposedITAT Mumbai15 June 2020AY 2009-105 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 the Assessing Officer levied penalty merely on suspicion and failed to prove that the assessee furnished inaccurate particulars of income. Therefore, the penalty under Section 271(1)(c) could not be imposed.

What were the facts?

The assessee declared purchases from a party, providing documentary evidence including account payee cheques. However, the Assessing Officer added the purchases to income and initiated penalty proceedings due to a lack of transportation details.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied solely on suspicion without proving furnishing of inaccurate particulars of income.

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, “SMC” BENCH, MUMBAI

Hearing: 15.06.2020Pronounced: 15.06.2020

आदेश / O R D E R महावीर स िंह, उपाध्यक्ष / PER MAHAVIR SINGH, VP: These appeals of assessee are arising out of the orders of Commissioner of Income Tax (Appeals)- 38, Mumbai in Appeal Nos. CIT(A)-38/ITO-26(3)(4)/IT-367&501/2015-16 & 2016-17 dated 29.11.2018 & 22.10.2018. The penalties were levied by & 1845/Mum/2019 Page | 2 ITO ward 26(3)(4) under section 271(1)(c) of the Act vide order dated 22.09.2015 & 25.04.2016.

1.

2. The only common issue in these appeals of assessee is as regards to the order of CIT(A) confirming the levy of penalty under section 271(1)(c) of the Act for furnishing of inaccurate particulars of income amounting to ` 98,00,000/- in Assessment Year 2009-10 and `70,000/- in Assessment Year 2010-11. The identical grounds were raised in both the years. Hence, we will take the facts from Assessment Year 2009-10. The grounds raised

in Assessment Year 2009-10 in read as under: -

1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the penalty under section 271(1)(c) of ` 98,000/- for furnishing inaccurate details of income.

2.

On the facts and circumstances of the case and in law, the learned CIT(A) failed to appreciate that:

-the appellant offered the amount to tax in the course of assessment proceedings under section 140(3) r.w.s 147 to avoid litigation.

-Addition made in the assessment order u/s 143(3) r.w.s 147 is an adhoc and estimated addition.” & 1845/Mum/2019 Page | 3 3. We have heard the learned Departmental Representative and gone through the facts and circumstances of the case. We noted that the Assessing Officer received information from Sale Tax Department of Maharashtra that the assessee is one of the beneficiaries and received accommodation entries of bogus purchases during the Financial year 2008-09 relevant to this Assessment Year 2009-10 from M/s Baba Steel amounting to ₹3,69,207/-. The Assessing Officer noticed that assessee replied that it has made purchases and recorded the purchases in the books of accounts, entered into stock register and also filed statement of bank account of the hawala parties as well as the assessee wherein it is clearly depicted that the payments for these purchases are made by account payee cheques but according to Assessing Officer there is no details in regard to transportation of the goods and no transportation charges are recorded in the books of accounts. Hence, the Assessing Officer added the entire bogus purchases of ₹3,69,207/- and added to the total income of the assessee and also initiated the penalty proceeding under section 271(1)(c) of the Act. Accordingly, the Assessing Officer levied under section 271(1)(c) of the Act on the amount of ₹3,69,207/- for furnishing the inaccurate particulars of income and accordingly, imposed minimum penalty under section 271(1)(c) of the Act at ₹97,397/-. Aggrieved, assessee preferred the appeal before CIT(A) who also confirmed the action of the Assessing Officer. Aggrieved, assessee came in appeal before Tribunal.

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