Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
आदेश / O R D E R भहावीय स िंह, उऩाध्मक्ष / PER MAHAVIR SINGH, VP: These appeals of Revenue are arising out of the orders of the Commissioner of Income Tax (Appeals)]-1, Mumbai, [in short CIT(A)], in & 375/2014-15 even date & 1333/Mum/2019 Laxman B Nankar. Page | 2 05.12.2018. The assessment was framed by the Assessing Officer (in short ACIT/ITO/ AO) for A.Ys. 2010-11 and 2011-12 under section 143(3) read with section 147 of the Income-tax Act, 1961 (hereinafter ‘the Act’). The penalties were levied by Income Tax Officer, Ward 3(1), under section 271(1)(c) of the Act vide orders dated 21.05.2014.
The only issue in these appeals of Revenue are against the orders of CIT(A) deleting the penalties levied by AO under section 271(1)(c) of the Act on the basis that the addition was made on account of bogus purchases thereby the assessee has furnished inaccurate particulars of income. For this, Revenue has raised identical grounds in both the assessment years i.e. Assessment Years 2010-11 and 2011-12 except quantum, which are argumentative in nature. Hence, I will take the facts from Assessment Year 2010-11 in and will decide the ground.
Brief facts are that the AO received information from Sales Tax Authorities that the assessee was engaged in obtaining bogus bills without actually purchases and taking delivery of goods. The assessee made bogus purchases from Laxmi Trading Company amounting to ₹2,05,306/- and AO estimated the whole amount on such bogus purchases and made addition of Rs. 2,05,306/-. The AO initiated the penalty proceedings and levied the penalty by observing that the assessee claimed bogus purchases amounting to ₹2,05,306/- and accordingly, assessee & 1333/Mum/2019 Laxman B Nankar. Page | 3 furnished inaccurate particulars of income and thereby, he levied the penalty under section 271(1)(c) of the Act on the addition amount of ₹2,05,306/-, thereby levied the minimum penalty amounting to ₹63,440/-under section 271(1)(c) of the Act. Aggrieved, assessee preferred the appeal before CIT(A), who deleted the penalty by observing in para 8 as under: -
“8. The levy of penalty is merely on disallowance of purchases and not finding of concealment of any particular or mala- fide intention to reduce taxable income. Addition made on account of disallowance of purchases as bogus automatically cannot justify the penalty levied u/s 271(1)(c) of the Act. Accordingly, the penalty of Rs. 63,440/-, imposed u/s 271(1)(c) of the I.T. Act, by the AO, is hereby deleted and the grounds of appeal, raised as above, are allowed.”
Aggrieved, now Revenue is in appeal before Tribunal.
I have heard the learned Sr. Departmental Representative. There is none present from the assessee’s side. I have gone through the facts and circumstances of the case and noted that the assessee before AO submitted various evidences like ledger account of the purchasers, copies of invoices, delivery challans, bank statements duly reflecting payment made by account
ITA Nos. 1332 & 1333/Mum/2019 Laxman B Nankar. Page | 4 payee cheques etc. But these were not disapproved by Assessing Officer. I noted that the CIT(A) exactly on the same finding deleted the penalty that this is merely estimated addition by estimating the bogus purchases and applying the profit rate at 12.5% of the bogus purchase. I noted that this issue is squarely covered in vide order dated 16.05.2019, wherein it is held as under: -
“3. Upon careful consideration, upon perusal of assessee’s submissions during appellate proceedings, we find that the assessee’s plea revolve around the fact that the purchases were made under bona-fide belief and in good faith that the suppliers were genuine. The suppliers used to visit assessee’s shop to supply the material as per routine practice. The TIN of the suppliers was found active at the time of purchase of goods. We find the explanation to be plausible one and the overall conduct of the assessee do not inspire us to confirm the penalty. By deleting the same, we allow ground nos. 1 & 2. ……………..”
& 1333/Mum/2019 Laxman B Nankar. Page | 5 5. As the issue is covered, I find that no infirmity in the order of CIT(A) deleting the penalty. Hence, I confirm deletion of the penalty and confirm the order of CIT(A).
Similar are the facts in Assessment Year 2011-12, hence taking a consistent view in this year also, I delete the penalty in this year also and confirm the order of CIT(A).
In the Result, the appeals of Revenue are dismissed. Order pronounced in the open court on 01.06.2020 Sd/- (महावीर स िंह /MAHAVIR SINGH) (उऩाध्मक्ष / VICE PRESIDENT) म िंबई, ददनािंक/ Mumbai, Dated: 01.06.2020 ुदीऩ यकाय, व. ननजी चिव/ Sudip Sarkar, Sr.PS आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A) 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननचध, आमकय अऩीरीम अचधकयण, भुिंफई / DR, ITAT, Mumbai 6. गार्ा पाईर / Guard file. आदेशान सार/ BY ORDER, त्मावऩत प्रनत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुिंफई / ITAT, Mumbai & 1333/Mum/2019 Laxman B Nankar. Page | 6 Sr. Details Date Initi Designa No. als tion 1 Draft dictate on webex 15.06.20 Sr.PS/PS 2 Draft Placed before author /20 Sr.PS/PS 3 Draft proposed & placed before the JM/AM Second Member 4 Draft discussed/approved by Second JM/AM Member 5 Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6 Kept for pronouncement Sr.PS/PS 7 File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date on which file goes to the AR 10 Date of Dispatch of order 11 Draft dictation sheets is enclosed Yes/No