Income Tax Appellate Tribunal - Mumbai
Techno Process Equipments (I) Private ... vs Dcit 15(3)(1), Mumbai on 27 February, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM
आयकर अपील सं / I.T.A. No. 6375/Mum/2017
(निर्धारण वर्ा / Assessment Year: 2011-12)
M/s. Techno Process बिधम/ DCIT, Circle-15(3)(1)
Equipments (India) Pvt. Ltd. Vs. Aayakar Bhavan, 4th Floor,
215/219, 2nd Floor, Ashok Room No. 451, M.K. Road,
Industrial Premises, L.B.S. Mumbai-400020.
Marg, Bhandup (W),
Mumbai-400078.
स्थायी लेखा सं ./जीआइआर सं ./PAN/GIR No. : AABCT2398C
(अपीलाथी /Appellant) .. (प्रत्यथी / Respondent)
Assessee by: Shri Minhazali N. Ladiwala
Revenue by: Shri Chaudhary Arun Kumar
Singh (DR)
सुनवाई की तारीख / Date of Hearing: 21.02.2019
घोषणा की तारीख /Date of Pronouncement: 27.02.2019
आदे श / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 21.08.2017 passed by the Commissioner of Income Tax (Appeals)-24, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the A.Y. 2011-12.
2. The assessee has raised the following grounds: -
"1 The Ld. CIT(A) has erred in confirming the levy of penalty of Rs.35,000/- under section 271(1)(c) of the I.T. act, 1961 by ITA. No.6375/M/2017 A.Y. 2011-12 dismissing the appeal petition of the appellant and not considering the submission made by the appellant.
2. Your appellant craves liberty to add, amend, alter, substitute, or delete any or all of the foregoing grounds of appeal before or during the hearing of the appeal."
4. The brief facts of the case are that the assessee filed its return of income on 30.09.2011 declaring total income to the tune of Rs.3,16,07,183/-. The assessee made the purchases from alleged bogus hawala dealers amounting to Rs.97,263/-. Therefore, the assessment of the assessee was reopened u/s 148 of the Act and necessary notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. Thereafter, the assessment u/s 143(3) r.w.s. 147 of the Act was completed on 23.02.2015 raising the addition of bogus purchase in sum of Rs.97,263/-. Thereafter, the penalty proceeding was initiated on account of bogus purchase in sum of Rs.97,263/-. After giving notice, the AO levied the penalty in sum of Rs.35,000/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the order, therefore, the assessee has filed the present appeal before us.
5. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. Under these issues the assessee has challenged the confirmation of the penalty by the CIT(A) in sum of Rs.97,263/- levied by the AO. The Ld. Representative of the assessee has argued that the penalty has been levied by the AO on account of the estimation of profit upon the 2 ITA. No.6375/M/2017 A.Y. 2011-12 alleged bogus purchase which is not justifiable, therefore, the penalty is not liable to be sustainable in view of the law settled in Gujarat High Court in the case titled as National Textiles Vs. CIT 2001 164 CTR 2009 (Guj). However, on the other hand, the Ld. Representative of the Department has refuted the said contention. Taking into account, all the facts and circumstances and perusing the record, we find that the case of the assessee was reopened u/s 148 of the Act on the basis of the information received from the DGIT (Inv.), Mumbai in which it was conveyed that the Sales Tax Department has informed about the bogus purchase of the assessee. The bogus purchase total in sum of Rs.97,263/- was added to the income of the assessee. Books of account of the assessee has not been rejected. The factual situation nowhere leads to concealment of income or furnishing the inaccurate particulars of income. It is not a ground to levy the penalty. Moreover, it is a case where the explanation of the assessee was not accepted and to levy of penalty merely on account of disallowance of expenses is not liable to be considered as concealment of any particulars of income or concealment of income or mala-fide intention to reduce the taxable income. The Hon'ble Gujarat High Court in the case of Gujarat High Court in the case titled as National Textiles Vs. CIT 2001 164 CTR 2009 (Guj) has held that the Section 68 of the Act permits the AO to treat the unexplained cash credit as income of the assessee by making certain addition if any, if there is failure of the assessee to give any explanation then the 3 ITA. No.6375/M/2017 A.Y. 2011-12 addition made on this account automatically cannot be a justifiable ground to levy the penalty u/s 271(1)(c) of the Act. Accordingly, in view of the law settled by Hon'ble Gujarat High Court in the case of National Textiles (supra), we are of the view that the penalty on account of sustaining the addition u/s 68 of the Act of bogus purchase is not justifiable, therefore, we set aside the finding of the CIT(A) on these issues and delete the penalty. Accordingly, we decide these issues in favour of the assessee against the revenue.
7. In the result, the appeals filed by the assessee are hereby ordered to be allowed.
Order pronounced in the open court on 27.02.2019.
Sd/- Sd/-
(SHAMIM YAHYA) (AMARJIT SINGH)
ले खध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER
मुंबई Mumbai; दिनां क Dated : 27.02.2019.
Vijay
आदे श की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयु क्त(अपील) / The CIT(A)-
4. आयकर आयु क्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai 4