R.M.MEHTA & CO.,MUMBAI vs. ACIT 2, MUMBAI

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ITA 200/MUM/2019Status: DisposedITAT Mumbai05 February 2020AY 2009-104 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 penalty was not automatic and could not be imposed solely because quantum additions were accepted. The assessee had provided sufficient documentary evidence to support the purchase transactions.

What were the facts?

The assessee's purchases were deemed suspicious by the Sales Tax Department, leading to reassessment. Despite providing purchase bills, payment proofs, and other supporting documents, the assessee could not produce the supplier for verification.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the assessee provides substantial documentary evidence for purchases, even if the supplier cannot be produced for verification.

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, “D” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Ashok Mehta- Ld. AR
For Respondent: Ms. Jothilakshmi Nayak-Ld.DR

आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2009-10) M/s. R.M. Mehta & Co. ACIT-2 New Trombay Road Piramal Chambers बनाम/ Opp. Godrej Foods Ltd. Lalbaugh Vs. Opp. Castrol Depot, Mumbai – 400013. Wadala(W), Mumbai – 400037. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAAFR-1399-D (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Shri Ashok Mehta- Ld. AR Revenue by : Ms. Jothilakshmi Nayak-Ld.DR सुनवाई की तारीख/ : 28/01/2020 Date of Hearing घोषणा की तारीख / : 05/02/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [in short referred to as ‘AY’] 2009-10 contest the order of Ld. Commissioner of Income-Tax (Appeals)-48, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-48/IT-380/ACIT-21(3)/2018-19 dated 13/11/2018 on following grounds of appeal: -

1. The Learned Assessing Officer erred in levying penalty of Rs. 4,77,244/- under section 271(1)(c) & CIT Appeal – 48 erred in confirming the same.

2 R.M. Mehta & Co. Assessment Year :2009-10 2. The Learned Assessing Officer and CIT Appeal – 48 erred in confirming penalty without appreciating that the addition is made on account of estimation and probability without any evidence against the assessee.

3.

The Learned Assessing Officer erred in levying penalty without considering the fact that the assessee had provided all the evidences including truck nos in which the delivery was made to the assessee and further sold the goods & the CIT Appeal – 48 erred in confirming the same.

4.

The assessee craves leave to add/alter/amend/delete any of the above grounds of appeal

. As evident from ground of appeal, the assessee is aggrieved by confirmation of penalty u/s 271(1)(c) for Rs.4.77 Lacs.

2. The Ld. Authorized Representative for Assessee (AR) submitted that penalty has been levied on estimated additions on account of alleged bogus purchases. The Ld. AR submitted that additions made merely on estimated basis would not justify penalty u/s 271(1)(c). Au Contraire, Ld. DR pointed out that the assessee miserably failed to substantiate the purchase transactions and therefore, the levy of penalty was justified. 3.1 Facts on record would reveal that the assessee was assessed for year under consideration u/s 143(3) r.w.s. 147 on 30/03/2014. The reassessment proceedings were triggered pursuant to receipt of certain information from Sales Tax Department that the assessee obtained fictitious purchases bills for Rs.123.55 Lacs from an entity namely M/s Raj Traders. Although the assessee produced copies of challans and bills of supplier along with evidence of payment through banking channels but failed to produce the supplier for verification of purchases. Consequently, Ld. AO made estimated additions of 25% against such purchases and initiated penalty proceedings for furnishing of inaccurate

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