ITO - 12(3)(3) , Mumbai v. LA CERA MALL PRIVATE LIMITED, Mumbai

ITA 5810/MUM/2019 | 2009-2010
Pronouncement Date: 31-03-2021 | Result: Dismissed

Appeal Details

RSA Number 581019914 RSA 2019
Assessee PAN AAACL9996K
Bench Mumbai
Appeal Number ITA 5810/MUM/2019
Duration Of Justice 1 year(s) 6 month(s) 21 day(s)
Appellant ITO - 12(3)(3) , Mumbai
Respondent LA CERA MALL PRIVATE LIMITED, Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-03-2021
Last Hearing Date 30-03-2021
First Hearing Date 30-03-2021
Assessment Year 2009-2010
Appeal Filed On 09-09-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUMBAI BEFORE SHRI SHAMIM YAHYA ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE JUDICIAL MEMBER ITA NO. 5810/MUM/2019 (A.Y: 2009-10) ITO 12(3)(3) RNO. 224 2 ND FLOOR AAYAKAR BHAVAN MK ROAD MUMBAI 400020 VS. LA CERA MALL PVT LTD. PLOT NO. 44/A GOVT INDUSTRIAL ESTATE OPP PCA LABORATORY MG ROAD CHARKOP KANDIVALI(W) MUMBAI 400067. ./ ./ PAN/GIR NO. : AAACL9996K APPELLANT .. RESPONDENT APPELLANT BY : SHRI AJAY PRATAP SINGH DR RESPONDENT BY : NONE DATE OF HEARING 30 .0 3 .2021 DATE OF PRONOUNCEMENT 01 .0 4 .2021 / O R D E R PER PAVAN KUMAR GADALE JM: THE APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 MUMBAI PASSED U/S. 271(1)(C) AND 250 OF THE INCOME TAX ACT 1961. ITA NO 581 0/MUM/2019 LA CERA MALL PVT LTD MUMBAI - 2 - AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE AND WE HEARD THE LD.DR. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE 14. CIT (A) ERRED IN DELETING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT 1961 OF RS.32 052/- WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE CLAIMED BOGUS PURCHASES IN ITS RETURN OF I NCOME AND THUS FURNISHED INACCURATE PARTICULARS OF INCOME WIT HIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT 1961'. 2 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE HON'BLE ITAT IS REQUESTED TO ENTERTAIN THIS APPEAL THOUGH THE TAX E FFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN THE CBDTS CIRCULAR NO. 17/2019 DATED 08.08.2019 READ WITH CIRCULAR NO.3/2018 DATED 11.07 .2018 AS AMENDED ON 20.08.2018 AS THE CASE FALLS IN THE EXCE PTION PROVIDED IN PARA 10(E) OF THE SAID INSTRUCTION IN AS MUCH AS TH E ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN TH E NATURE OF LAW ENFORCEMENT AGENCIES NAMELY SALES TAX AUTHORITIES '. 3 'THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED'. 4 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY'. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF DEALERSHIP O F TILES SANITARY WARE BATHROOM FITTINGS ACCESSORIE S AND BUILDING MATERIALS AND FILED THE RETURN OF INCO ME ELECTRONICALLY FOR THE A.Y 2009-10 ON 28.09.2009 DISCLOSING THE TOTAL INCOME OF RS. 2 26 680/- AND T HE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE AC T. ITA NO 581 0/MUM/2019 LA CERA MALL PVT LTD MUMBAI - 3 - SUBSEQUENTLY THE CASE WAS RE-OPENED U/S 147 OF THE ACT THE A.O. HAS RECEIVED THE INFORMATION FROM THE SALES TAX & DGIT (INV) WING MUMBAI THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS FROM M/S . AKSHATA ENTERPRISES AGGREGATING TO RS. 4 14 909/.- THEREFORE THE A.O HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND ISSUED NOTICE U/S 148 OF THE ACT. SUBSEQUENTLY THE NOTICE U/S 142(1) OF THE ACT WAS ISSUED. IN COMPLIANCE THE LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED THE DETAILS. THE A.O CONSIDERED THE MATERIAL ON RECORD AND OBSERVED THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE TRANSACTION OF PURCHASES. FURTHER THE A.O HAS ISSUED NOTICE U/S 133(6) OF THE ACT ON THE PARTY TO CROSS VERIFY THE CLAIM OF THE ASSESSEE. BUT THE SAID NOTICE WAS RETURNED US-SERVED WITH REMARK NOT KNOWN BY THE POSTAL AUTHORITIES. HENCE THE A.O DEALT ON THE DISPUTED ISSUE AND MADE ADDITION OF THE BOGUS PURCHASES OF RS.4 14 907/- AND ASSESSED THE TOTAL INCOME OF RS.6 41 590/-AND PASSED THE ORDER U/S 143(3) R.W.S 147 OF THE ACT ON 24.02.2015 SUBSEQUENTLY THE A.O HAS INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE A.O RELIE D ON ITA NO 581 0/MUM/2019 LA CERA MALL PVT LTD MUMBAI - 4 - THE FINDINGS IN THE SCRUTINY ASSESSMENT AND THE SUBMISSIONS MADE BY THE ASSESSEE IN THE COURSE OF HEARING AND IT WAS MENTIONED THAT IN QUANTUM APPEAL AGAINST THE ADDITION OF BOGUS PURCHASES OF RS4 14 907/-THE CIT(A) HAS RESTRICTED THE DISALLOWANCE TO THE EXTENT OF GROSS PROFIT @25% WHI CH WORK OUT TO RD1 03 727/-.ON PERUSAL OF THE FACTS AN D EXPLANATIONS THE A.O WAS NOT SATISFIED WITH THE RE PLY AS THE ASSESSEE HAS INDULGED IN OBTAINING THE BOGUS PURCHASE BILLS AND THEREFORE LEVIED PENALTY OF RS.32 052/-AND PASSED ORDER U/S 271(1)(C) OF THE AC T DATED 31.03.2018. 3. AGGRIEVED BY THE PENALTY ORDER THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A) THE CIT(A) CONSIDE RED THE GROUNDS OF APPEAL FINDINGS OF THE A.O AND THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE A.O HAS MADE ADDITION OF 100% BOGUS PURCHASES IN THE SCRUTINY ASSESSMENT U/SEC143(3) R.W.S SEC147 OF THE ACT AND WHEREAS THE LD.CIT(A) HAS RESTRICTED THE ADDITION BY ESTIMATING GROSS PROFIT/INCOME @25%.BU T THE A.O HAS LEVIED THE PENALTY U/SEC 271(1)(C) OF T HE ACT ON ESTIMATED INCOME. THE CIT(A) DEALT ON THE PROVISIONS OF SEC. 271(1)(C) OF THE ACT AND RELIED ON ITA NO 581 0/MUM/2019 LA CERA MALL PVT LTD MUMBAI - 5 - THE COORDINATE BENCH OF HONBLE TRIBUNAL AND THE HONBLE HIGH COURT DECISIONS AND OBSERVED THAT NO PENALTY CAN BE LEVIED ON ESTIMATED INCOME AND DIRECTED THE A.O TO DELETE THE PENALTY AND ALLOWED THE ASSESSEES APPEAL. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE HAS FILED AN APPEAL WITH THE HONBLE TRIBUNAL. 4. AT THE TIME OF HEARING THE LD. DR SUBMITTED THA T THE CIT(A) ERRED IN DELETING THE PENALTY WHEREAS T HE A.O HAS RECEIVED THE INFORMATION THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AND THE SAME COULD NOT BE OVERLOOKED AND PRAYED FOR ALLOWING THE REVENUES APPEAL. NONE APPEARED ON BEHALF OF THE ASSESSEE. 5. WE HEARD THE LD.DR SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED ISSUE AS ENVISAGED BY THE LD. DR THAT THE CIT(A) HA S ERRED IN DELETING THE PENALTY OVERLOOKING THE FACTS OF BOGUS PURCHASES. WHEREAS THE LD.CIT(A) CONSIDERING THE FACTS AND CIRCUMSTANCES OBSERVED THAT THE PENAL TY CANNOT BE LEVIED ON ESTIMATED INCOME. WE FIND THAT THE CIT(A) HAS ESTIMATED INCOME/ GROSS PROFIT@25% ON BOGUS PURCHASES. WE ARE OF THE OPINION THAT WHEN ITA NO 581 0/MUM/2019 LA CERA MALL PVT LTD MUMBAI - 6 - THE ADDITION IS ON ESTIMATED BASIS PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED ON SUCH ADHOC ESTIMATED INCOME. THE LD.DR COULD NOT CONTROVERT TH E FINDINGS OF THE CIT(A) WITH ANY NEW COGENT EVIDENCE S OR INFORMATION. ACCORDINGLY WE ARE NOT INCLINED T O INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND UPHEL D THE SAME AND DISMISS THE GROUNDS OF APPEAL OF THE REVENUE . 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.04.2021 SD/- SD/- (SHAMIM YAHYA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 01.04.2021 KRK PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. '#$%&&' )* / DR ITAT MUMBAI 6. %-./0 / GUARD FILE. / BY ORDER '& //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT MUMBA I