ITO-5(2)(3), MUMBAI v. M/S MOKALSAR STEEL PVT. LTD., MUMBAI

ITA 5211/MUM/2019 | 2011-2012
Pronouncement Date: 12-03-2021 | Result: Dismissed

Appeal Details

RSA Number 521119914 RSA 2019
Assessee PAN AACCM4584A
Bench Mumbai
Appeal Number ITA 5211/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 3 day(s)
Appellant ITO-5(2)(3), MUMBAI
Respondent M/S MOKALSAR STEEL PVT. LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 12-03-2021
Last Hearing Date 11-03-2021
First Hearing Date 11-03-2021
Assessment Year 2011-2012
Appeal Filed On 08-08-2019
Judgment Text
THE INCOME TAX APPELLATE TRIBUNAL D BENCH MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 5211/MUM/2019 (ASSESSMENT YEAR 2011-12) ITO-5(2)(3) ROOM NO. 566 AAYAKAR BHAVAN M.K. ROAD CHURCHGATE MUMBAI-400 020. VS. M/S. MOKALSAR STEEL PRIVATE LIMITED 104 1 ST FLOOR KANDOORI BUILDING 215 PANJRAPOLIE ROAD MUMBAI-400 004. PAN : AACCM4584A (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI BHARAT ANDHLE DATE OF HEARING 09.03.2021 DATE OF PRONOUNCEMENT 12.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDE RS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEAR NED CIT(A)] DATED 10.5.2019 WHEREIN FOLLOWING PENALTY UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT HAS BEEN DELETED. ASSESSMENT YEAR AMOUNT OF PENALTY 2011-12 RS. 73 532/- 2. BRIEF FACTS OF THE CASE LEADING TO THE LEVY OF P ENALTY ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN BUSINESS OF TRADING IN FERR OUS METALS. FOR AY 2011- 12 THE ASSESSEE HAD E-FILED A RETURN OF INCOME ON 26.07.2011 DECLARING TOTAL INCOME AT RS.1 07 201/-. SUBSEQUENTLY THE CASE WAS REOPENED BY ISSUE OF NOTICE U/S. 148 OF THE ACT ON THE BASIS OF THE INF ORMATION RECEIVED FROM THE DGIT(INVESTIGATION) MUMBAI THAT THE ASSESSEE IS A BENEFICIARY OF THE ACCOMMODATION ENTRIES PROVIDED BY SOME OF THE MVAT [MAHARASHTRA VALUE ADDED TAX] DEALERS WHO HAVE INDULGED IN ISSUING BO GUS SALE/PURCHASE BILLS M/S. MOKALSAR STEEL PRIVATE LIMITED 2 WITHOUT GIVING ACTUAL DELIVERY OF GOODS AND MATERIA LS FROM THE HAWALA DEALERS. AN ASSESSMENT U/S 143(3) R.W.S. 147 DETERMINING AN INCOME AT RS. 20 11 308/- WAS CONCLUDED ON 18.01.2016. IN THE ASS ESSMENT ORDER THE AO MADE AN ADDITION OF RS. 19 03 778/- TO THE TOTAL IN COME OF THE ASSESSEE BY DISALLOWING THE EXPENSES CLAIMED BY THE ASSESSEE CO MPANY ON ACCOUNT OF ACCOMMODATION ENTRIES OF BOGUS PURCHASES. THE ASSES SEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO CONFIRMED THE ADDITION HOWEVER THE HON'BLE ITAT MUMBAI RESTRICTED THE ADDITION TO RS. 2 37 972/- ES TIMATED @ 12.5% OF THE BOGUS PURCHASE OF RS. 19 03 778/-. THE AO WHO HAD I NITIATED PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS O F INCOME EARLIER LEVIED A PENALTY OF RS. 73 532/- U/S 271(1)(C) OF THE ACT VI DE ORDER DATED 30.11.2018. 3. UPON ASSESSEES APPEAL LEARNED CIT(A) DELETED TH E PENALTY HOLDING THAT ADDITION IS ONLY ON ESTIMATE BASIS HENCE PENALTY I S NOT SUSTAINABLE. HE ALSO REFERRED TO SEVERAL CASE LAWS. 4. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD LD DR AND PERUSED THE RECORDS. AS CLEAR FROM THE FACTS RECORDED ABOVE THE DISALLOWANCE HAS BEEN MADE ON AN ESTIMATED BASIS ON ACCOUNT OF THE NON-PRODUCTION OF SUPPLIERS BEFORE T HE ASSESSING OFFICER. THE PURCHASE VOUCHERS WERE DULY PRODUCED AND THE PAYMEN TS WERE THROUGH BANKING CHANNEL. IN THESE BACKGROUNDS IN OUR CONSID ERED OPINION ASSESSEE CANNOT BE VISITED WITH THE REGOURS OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AS A MATTER OF FACT ON MANY OCCASIONS ON SIMILAR C IRCUMSTANCES IN QUANTUM PROCEEDINGS THE DISALLOWANCE ITSELF HAS BEEN DELETE D. IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE ASSESSEE CANNOT BE SAID TO HAVE BEEN GUILTY OF CONCEALMENT OR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME. IN THIS REGARD WE DRAW SUPPORT FROM THE DECISION OF A LARGER BENCH OF THE HONOURABLE SUPREME COURT IN THE CASE OF HINDUSTAN S TEELS LTD. VS. STATE OF ORISSA (83 ITR 26) WHERE IN IT WAS HELD THAT THE AU THORITY MAY NOT LEVY THE PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. M/S. MOKALSAR STEEL PRIVATE LIMITED 3 6. WE FURTHER NOTE THAT TAX EFFECT IN THIS CASE IS BELOW THE LIMIT FIXED BY CBDT FOR FILING APPEALS BEFORE ITAT. THE REVENUE HA S TRIED TO MAKE OUT A CASE THAT SINCE THE ADDITION WAS MADE PURSUANT TO INFORM ATION FROM SALES TAX DEPARTMENT THIS PENALTY APPEAL FALLS IN THE EXCEPT ION CARVED OUT IN THE CBDT CIRCULAR REGARDING APPEALS ARISING OUT OF ADDITIONS MADE PURSUANT TO INFORMATION FROM OUTSIDE AGENCIES. WE ARE OF THE OP INION THAT THIS PLEA IS NOT TENABLE INASMUCH AS ONCE REVENUE ACCEPTS THAT PENAL TY IS LEVIED ON OUTSIDE AGENCY INFORMATION THE PENALTY LEVIED WILL HAVE NO LEGS TO STAND. 7. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PR ECEDENT WE UPHOLD THE ORDER'S OF LD CIT(A) AND DELETE THE LEVY OF PENALTY . 8. IN THE RESULT REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 12.03.2021. SD/- SD/- (RAMLAL NEGI) (SHAMIM YA HYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 12/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT MUMBAI