ITO - 13(3)(3), MUMBAI vs. VIVA COMPOSITE PANEL PVT. LTD., MUMBAI

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ITA 5709/MUM/2018Status: DisposedITAT Mumbai27 October 2020AY 2011-124 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 upheld the deletion of penalty, stating that penalty cannot be levied on estimated additions. Additionally, the revenue's appeal was dismissed on the ground of low tax effect as per CBDT circular.

What were the facts?

The revenue appealed against the deletion of penalty levied under Section 271(1)(c) for assessment years 2010-11 and 2011-12. The penalty was imposed due to the assessee's failure to prove the genuineness of certain purchases, leading to estimated additions.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on estimated additions and if the revenue's appeal is maintainable due to low tax effect.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAVISH SOOD, JM

For Appellant: Shri Vallabh Parmar – Ld. AR
For Respondent: Ms. Samatha Mullamudi-Ld. Sr. DR

Heard together (2 matters)

I.T.A. No.5708/Mum/2018
I.T.A. No.5709/Mum/2018

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R Per Bench 1. Aforesaid appeals by revenue for Assessment Years [in short referred to as ‘AY’] 2010-11 & 2011-12 contest separate orders of Ld. Commissioner of Income Tax (Appeals)-21, Mumbai [CIT(A)] qua deletion of certain penalty u/s 271(1)(c). In the said orders, Ld. CIT(A) has deleted penalty of Rs.1 Lac & Rs.0.87 Lac for AYs 2010-11 & 2011- M/s Viva Composite Panel Private Limited Assessment Years :2010-11 & 2011-12 12 respectively. The facts as well as grounds raised

in both the years are identical and adjudication in any year shall equally apply to the other year also. The grounds for AY 2010-11 reads as under: -

1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied without appreciating the facts that the assessee has failed to prove the genuineness of transaction of the purchases.

2. The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. We have carefully heard the arguments advanced by both the sides. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

2. While framing assessment for AY 2010-11, the assessee was saddled with estimated addition of Rs.3.24 Lacs which was nothing but estimated addition of 12.5% against certain suspicious purchases since the assessee failed to discharge the onus of establishing the genuineness of purchases. Consequently, a penalty of Rs.1 Lac was levied by Ld. AO u/s 271(1)(c) vide order dated 06/12/2017.

3. The Ld. CIT(A) deleted the same by observing that the penalty could not be levied where the additions were made on estimated basis. For the said proposition, reliance was placed, inter-alia, on the binding decision of Hon’ble Punjab & Haryana High Court in Harigopal Singh V/s CIT 258 ITR 85 and Hon’ble Gujarat High Court in CIT V/s Subhash Trading Co. 221 ITR 110 besides host of various Tribunal decisions which are already enumerated in the impugned order. Therefore, the penalty was deleted. Aggrieved, the revenue is in further appeal before us.

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