MIHIR AGENCIES P.LTD,MUMBAI vs. DCIT CC (46), MUMBAI

The issue raised by the ld. Commissioner of Income Tax (Appeals) erred in confirming the levy of penalty amounting to Rs.25,11,000/-.

Brief facts of the case are that the concerns were floated and run by Shri Mukesh Choksi. After search and seizure action, the concern was held to be the (A.Y. 2010-11) M/s. Mihir Agencies Pvt. Ltd. vs. Dy. CIT accommodation entry provider. The Assessing Officer rejected the books of account and estimated the total income @ net commission of 2% of the total receipts shown in the bank account. The assessee contested the same and requested the same to be made at 0.15% in view of the ITAT decision in the assessee’s own case. However, the ld. Commissioner of Income Tax (Appeals) did not find the facts identical and confirmed the action of the Assessing Officer. On this account, penalty action was initiated and penalty was levied. The ld. Commissioner of Income Tax (Appeals) has confirmed the levy of penalty.

Against this order, the assessee is in appeal before the ITAT.

The ld. Counsel of the assessee contended that in identical situation in assessee’s own case, the ITAT has determined income @ 0.15% of the net receipt.

Further, the ld. Counsel of the assessee submitted that in assessee’s own case as well as in assessee’s group cases, penalty similarly levied were deleted by the ITAT in the following cases:

He submitted that the tribunal had referred to Hon’ble Calcutta High Court decision in the case of Durga Kamal Rice Mills vs. CIT [2004] 265 ITR 25 (Calcutta) for the following proposition:

Since facts are identical, and on similar facts ITAT has in assessee’s own case deleted the penalty and the Revenue has not submitted that the Hon'ble jurisdictional High Court has reversed the said decision, we follow the precedent and delete the levy of penalty.