INCOME TAX OFFICER 29(3)(3), MUMBAI vs. SMT.SEEMA R SINGH, MUMBAI

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ITA 5531/MUM/2018Status: DisposedITAT Mumbai10 December 2019AY 2010-114 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 when the income of the assessee is estimated. Therefore, the deletion of penalty by the CIT(A) was justified.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of penalty. The Assessing Officer had made additions on account of bogus purchases and levied penalty. The CIT(A) deleted the penalty relying on previous tribunal decisions.

What were the issues?

Whether penalty can be levied on estimated income arising from bogus purchases. Whether the deletion of penalty by the CIT(A) was justified.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI S RIFAUR RAHMAN & SHRI RAVISH SOOD

Hearing: 28/11/2019Pronounced: 10.12.2019

आदेश / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER): Both the appeals are filed by the revenue against the order of the Ld. CIT(A)-40, Mumbai dated 28.06.2018 for the A.Ys 2010-11 & 2011-12. 2. Brief facts of the case are that that assessee filed her return of income for the A.Y 2010-11 on 24.09.2010, ITA No. 5531 & 5532//Mum/2018. Smt. Seema R. Singh, Mumbai. - 2 - declaring total income of Rs. 3,71,322/- which were 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 from Hawala entry providers. Accordingly, the assessments were reopened, the reassessment was completed vide order dated 29.01.2016 by determining the total income at Rs. 18,90,620/-. In the above assessment A.O estimated the gross profit @ 12.5% on sales made by the assessee and made addition of Rs. 15,19,293/- on account of suppression of gross profit through bogus purchases. The A.O also initiated penalty proceedings u/s 271(c) of the Act by issue notice u/s 274 of the Act and levied penalty of Rs. 4,69,462/- vide order dated 26.07.2016.

3.

Aggrieved with the order of the A.O the assessee preferred an appeal before the CIT(A).

4.

After considering the submissions of the assessee and by relying on the decision of the Coordinate Bench of this Tribunal in the case of ITO Vs. ETCO Telecom Ltd., in 5998 & 5999/Mum/2012 and in the case of ACIT Vs. M/s Balaji constructions in ITA No. 217/Mum/2015 ITA No. 5531 & 5532//Mum/2018. Smt. Seema R. Singh, Mumbai. - 3 - has deleted the penalty levied by the A.O. Aggrieved with the above order the revenue is in appeal before us.

5.

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.

6.

The facts in ITA No. 5532/Mum/2018 are also similar to the above case except variants in figures. Accordingly, the appeal of the revenue is dismissed.

7.

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

This Order pronounced in Open Court on 10/12/2019.

1.

Sd/- Sd/- (S RIFAUR RAHMAN ) (RAVISH SOOD) (JUDICIAL MEMBER) ACCOUNTANT MEMBER & 5532//Mum/2018. Smt. Seema R. Singh, Mumbai. - 4 - Mumbai, Dated 10/12/2019 KRK, PS आदेश की प्रनिलिपि अग्रेपर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant प्रत्यथी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. ववभागीय प्रतततनधि, आयकर अपीलीय अधिकरण, अहमदाबाद / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशधिुसधर/ BY ORDER, सत्यावपत प्रतत //True Copy// 1. उि/सहधयक िंजीकधर ( Asst. Registrar) आयकर अिीिीय अधर्करण, अहमदधबधद / ITAT, Mumbai

6. Date

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