ACIT 21(3), MUMBAI vs. MS.VEENA VASANT SHAH (PROP.M/S.BHAGAT JEWELLERS), MUMBAI

The present two Appeals have been filed by the revenue against the separate order of Commissioner of Income Tax ITA No. 5886/Mum/2018 A.Ys 2009-10 & 2010-11 Ms. Veena Vasant Shah Prop: M/s. Bhagat Jewellrs - 2 - (Appeals)-33, Mumbai, both dated 24-07-2018 for the Assessment Years ( in short, ‘A.Y) 2009-10 & 2010-11 respectively, whereby the Ld. CIT(A) allowed both the appeals filed by the assessee against the penalty orders passed u/s 271 (1) (c) of the Income Tax Act, 1961 (for short the ‘Act’) by deleting the same. .

Since the issues raised in both the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed of by this consolidated order. Firstly, we are taking AY 2009- 10 filed by the revenue. ITA No. 5889/Mum/2018 for AY 2009-10 3. Brief facts of the case are that that assessee filed her return of income for the A.Y 2009-10 on 30.09.2009, declaring total income of Rs. 69,41,460/- which was processed/ accepted u/s 143(1) of the Act. Subsequently information received from sales tax department and DGIT (Inv.) Mumbai informing that assessee has made purchases ITA No. 5889/Mum/18 ITA No. 5886/Mum/2018 A.Ys 2009-10 & 2010-11 Ms. Veena Vasant Shah Prop: M/s. Bhagat Jewellrs - 3 - from Hawala entry provider. Accordingly, the assessment was reopened, the reassessment was completed vide order dated 12-02-2015 by determining the total income at Rs. 72,73,280/-. In the above assessment A.O estimated the gross profit on such alleged transaction @ 12.5% made by the assessee and made addition of Rs. 3,31,819/- on account of bogus purchase transaction. The A.O also initiated penalty proceedings u/s 271(1)(c) of the Act by issuing of notice u/s 274 of the Act and levied penalty of Rs. 1,12,785/- (A.Y 2009-10) and Rs. 62,029/- (AY 2010-11) u/s. 271(1) ( c) of the Act vide order dated 14-08-2015/18-08-2015. 4. Aggrieved with the orders of the A.O the assessee preferred appeals before the CIT(A). 5. After considering the submissions of the assessee and by relying on the decisions of the Coordinate Bench of this Tribunal in the case of ITO Vs. ETCO Telecom Ltd., in ITA No. 5243, 5998 & 5999/Mum/2012 and in the case of ACIT Vs. M/s Balaji constructions in ITA No. 217/Mum/2015 and ITA Nos. 5531, 5532/Mum/2018 in the case of ITO Vs. Smt. Seeman R. Singh, order dt. 10-12-2019 has deleted the ITA No. 5889/Mum/18 A.Ys 2009-10 & 2010-11 Ms. Veena Vasant Shah Prop: M/s. Bhagat Jewellrs - 4 - penalty levied by the A.O. Aggrieved with the above order the revenue is in appeal before us.

At the time of hearing, it is brought to our notice that the penalty was levied on the alleged bogus purchases and the income was estimated, the same was also confirmed by the Ld. DR. Therefore, in our considered view and in the catena of cases the Courts have held that the penalty cannot be levied when the income of the assessee is estimated. Therefore, the penalty deleted by the CIT(A) is justified and proper. Accordingly the appeal of the revenue is dismissed.

The facts in ITA Nos. 5531 & 5532/Mum/2018 order dt. 10-12-2019 are also similar to the above case except variants in figures. Accordingly, the appeal of the revenue is dismissed.

The facts in AY 2010-11 (ITA No. 5886/Mum/18) are similar to A.Y 2009-10 (ITA No. 5889/Mum/18), therefore, the findings as given in are ITA No. 5889/Mum/18 ITA No. 5886/Mum/2018 A.Ys 2009-10 & 2010-11 Ms. Veena Vasant Shah Prop: M/s. Bhagat Jewellrs - 5 - applicable to this AY also. Accordingly, the grounds raised by the revenue in its both the appeals are dismissed.

In the result, the appeals filed by the revenue are dismissed.