RAHEJA UNIVERSAL P. LTD.,MUMBAI vs. DCIT CENT. CIR. 4(2), MUMBAI

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO levying penalty under section 271(1)(c) of the Act amounting to Rs. 9,399/-.

We have heard the rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that the assessee filed its return of income declaring total income of Rs. 31,97,7,400/-on 30-09-2011 for the AY 2011-12. Original assessment was completed under section 143(3) of the Act on 30-12-2013 by assessing income at Rs. 32,04,21,202/-. Subsequently, the AO received information from the office of the DGIT investigation Mumbai, who in turn received information from Sales Tax Department of Maharashtra that the Raheja Universal P. Ltd. AY:11-12 assessee has made purchase for an amount of Rs. 30,160/- from one hawala dealer indulging in issuing bogus bills without any actual delivery of goods. Accordingly, this amount of Rs. 30,160/- was added to the return of income of the assessee. The penalty proceedings under section 271(1)(c) of the Act was initiated. The AO levied the penalty despite the explanation filed by the assessee that the purchase from Mairu Enterprises was made towards purchases of Artificial Cricket Pitch with Machine and Side Removal Net Ball Pool with Side Effect from them for a sum of Rs. 30,160/- on 06-07-2010 also made payment by account payee cheque No. 375841 dated 06-07-2010. The assessee also enclosed copy of bank statement in support of above payment and claim that the purchase is genuine that the payment has been made by account payee cheque. It was claimed that this item have been purchased by assessee is very much transported by the assessee but the AO levied the penalty for the reason that the assessee has not preferred the appeal against the order of AO and that has become final.

Aggrieved assessee preferred the appeal before CIT(A), who also confirmed the action of the AO with the reason that “in response the assessed stated that these purchases were made towards purchase of a pool table and a table tennis from this party and the payments for the same were paid through cheque and copy of the bank account was also submitted. However, the assessee could not substantiate the above purchases with bill/ voucher, stock register inward register, outward register etc. and accordingly, the AO treated the same as bogus and made an addition of Rs. 30,160/- in the hands of the assessee.”

Aggrieved against the action of the CIT(A), assessee preferred the second appeal before Tribunal. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that one of the addition made to the return of income by an amount of Rs. 36,160/-, which represents payment toward purchases of Artificial Cricket Pitch with Machine and Side Removal Net Ball Pool with Side Effect. The assessee has recorded this purchase made from Mairu Enterprises Mumbai, and payment to them was also by account payee cheque No. 375841 dated 06-07-2010 drawn on HDFC Bank. The seller has also issued bill No. 0287dated 26-04-2010. We find that the assessee find has disclosed an income of Rs. 32.04 crore and it cannot be presumed that he might Page 2 of 3

In the result, the appeal of assessee is allowed. Order pronounced in the open court on 10-04-2017.