DCIT CIRCLE 5(2)(1), MUMBAI vs. M/S JMS INTERIORS PVT. LTD., MUMBAI

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ITA 572/MUM/2019Status: DisposedITAT Mumbai29 October 2020AY 2009-104 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 cannot be levied on estimated additions. Additionally, the appeal was dismissed as the penalty amount was below the monetary threshold specified in the CBDT's low tax effect circular.

What were the facts?

The revenue appealed against the deletion of penalty levied on disallowance of bogus purchases. The Assessing Officer made additions based on suspicious purchases from entities listed by the Sales Tax Department, to which the assessee provided documentary evidence and banking transaction proofs.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable on estimated additions and if the revenue's appeal is maintainable based on the tax effect.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

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

For Respondent: Ms. Samatha Mullamudi - Ld.Sr. DR

आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2009-10) DCIT-Circle-5(2)(1) M/s. JMS Interiors Private Ltd. बनाम/ Room No.525, Aaykar Bhavan, 31, Navyug, Bldg. No.02 M.K. Road, Mumbai-400 020 Forjet Hill Road Vs. Tardeo, Mumbai-400 051. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACJ-7307-C (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : None Revenue by : Ms. Samatha Mullamudi - Ld.Sr. DR सुनवाई की तारीख/ : 29/10/2020 Date of Hearing घोषणा की तारीख / : 29/10/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2009-10 contest the order of Ld. Commissioner of Income- Tax (Appeals)-10, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-10/DC-5(2)91)/426/2015-16 dated 30/10/2018 on following grounds: - 2 M/s. JMS Interiors Private Limited Assessment Year :2009-10 ''Whether on the facts and in the circumstance of the case and in law the Ld.CIT(A) erred in deleting the penalty levied on disallowance made on account of bogus purchases without appreciating that the assessee has failed to establish genuineness of the purchases especially when notice u/s 133(6) issued by the A.O. was received un-served and therefore it is clear case of furnishing inaccurate particulars of income within the meaning of section 271(l)(c ) of the lT Act 1961."

As evident, the revenue is aggrieved by the deletion of penalty of Rs.1,82,348/- as levied by Ld. Assessing Officer [AO] u/s. 271(1)(c) vide order dated 23/09/2015. Although none appeared for assessee during hearing before us, however, the material on record is quite sufficient to dispose-off the appeal and therefore, we proceed to adjudicate the same after hearing Ld. Sr. DR. who pleaded for confirmation of penalty as levied by the Ld. AO.

2.

Facts on record would reveal that an assessment was framed against the assessee for the year under consideration on 27/03/2015 u/s. 143(3) r.w.s. 147 r.w.s. 254 wherein the assessee was saddled with estimated addition of Rs.5.52 Lacs u/s. 69C, being 12.5% of certain suspicious purchases stated to be made by the assessee from two entities. These entities were listed as suspicious dealers by Sales tax Department, Maharashtra. Notices issued u/s. 133(6) to confirm the transactions elicited no response. Although, in support of purchase transactions, the assessee filed various documentary evidences like purchase bills etc. and submitted that the payment to suppliers were through banking channels, however, the submissions could not find favor with Ld. AO who estimated additions of 12.5% against these purchases. The assessee has not contested the quantum additions any further.

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