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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEYAND SHRI RAJESH KUMAR
Date of Hearing – 08.01.2020 Date of Order – 15.01.2020
O R D E R PER SAKTIJIT DEY, J.M.
The captioned appeal by the Revenue is directed against the order dated 18th July 2018, passed by the learned Commissioner of Income Tax (Appeals)–12, Mumbai, deleting the penalty of ` 3,37,257, imposed under section 271(1)(c) of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2011–12.
When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case. There is no application
2 Dinshaw R. Homavazir & Sons P. Ltd. for adjournment of hearing either. Therefore, we proceed to dispose off the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.
Brief facts are, the assessee, a resident company, is engaged in the business of construction work. For the assessment year under consideration, the assessee filed its return of income on 29th September 2011, declaring total income of ` 1,17,84,714. Subsequently, on the basis of information received from the Sales Tax Department, Government of Maharashtra, through the office of the DGIT (Inv.), Mumbai, that purchases worth ` 87,31,585, claimed to have been made by the assessee during the year from eight parties are non–genuine as the concerned selling dealers have been identified by the Sales Tax Department, Government of Maharashtra as hawala operators providing accommodation bills, the Assessing Officer re– opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of purchases of ` 87,31,585. Not being satisfied with the submissions made by the assessee and the evidences produced, the Assessing Officer treated the purchases as bogus and disallowed ` 10,91,448, being 12.5% of such purchases and added back to the income of the assessee. On the basis of such 3 Dinshaw R. Homavazir & Sons P. Ltd.
addition, the Assessing Officer initiated proceedings under section 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income and ultimately passed an order on 30th March 2017, imposing penalty of ` 3,37,257. Against the penalty order so passed, the assessee preferred appeal before the first appellate authority.
Learned Commissioner (Appeals) being convinced with the submissions of the assessee, deleted the penalty imposed under section 271(1)(c) of the Act.
We have heard the learned Departmental Representative and perused the material on record. As could be seen from the facts on record, the Assessing Officer has only doubted/disputed the source of purchases and has observed that the assessee has not purchased the goods from the declared source, but, from the grey market. For this reason alone, he has not disallowed the entire purchases, but, has restricted the addition to the profit element embedded in such purchases by estimating it at 12.5%. Appreciating the aforesaid fact, learned Commissioner (Appeals) has concluded that there is no justification for imposing penalty under section 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income. While coming to such conclusion, learned Commissioner (Appeals) has also relied upon the decisions of the Tribunal on identical issue. Having considered the facts of the present appeal, we do not find any infirmity in the order of 4 Dinshaw R. Homavazir & Sons P. Ltd.
learned Commissioner (Appeals) as it is an accepted fact that the disputed purchases have not only been recorded in the books of account, but corresponding sales have been made. Dispute is only with regard to the source of such purchases and the addition on the basis of which penalty has been imposed is also on estimate basis. In the aforesaid facts and circumstances of the case, we do not find any valid reason to differ with the view expressed by learned Commissioner (Appeals). Grounds are dismissed.
In the result, appeal is dismissed. Order pronounced in the open Court on 15.01.2020