M/S SHER MOHAMMED & CO, MUMBAI v. ACIT WARD-26(3), MUMBAI, MUMBAI

ITA 5986/MUM/2019 | 2009-2010
Pronouncement Date: 21-05-2021 | Result: Allowed

Appeal Details

RSA Number 598619914 RSA 2019
Assessee PAN AASFS7479M
Bench Mumbai
Appeal Number ITA 5986/MUM/2019
Duration Of Justice 1 year(s) 8 month(s) 2 day(s)
Appellant M/S SHER MOHAMMED & CO, MUMBAI
Respondent ACIT WARD-26(3), MUMBAI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 21-05-2021
Last Hearing Date 18-03-2021
First Hearing Date 18-03-2021
Assessment Year 2009-2010
Appeal Filed On 19-09-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI $ BEFORE SHRI VIKAS AWASTHY JUDICIAL MEMBER AND SHRI M. BALAGANESH ACCOUNTANT MEMBER . 5986 //2019 (. . 2009-10 ) ITA NO.5986/MUM/2019 (A.Y.2009-10) M/S. SHER MOHAMMED & CO. FLAT NO. 23 6A TAXI MEN COLONY LBS MARG KURLA (WEST) MUMBAI-400070. PAN: AASFS7479M ...... - / APPELLANT VS. ACIT- WARD (26(3) C-11 5 TH FLOOR R.NO. 501 PRATYAKSHAKAR BHAVAN BKC BANDRA (E) MUMBAI-400051. ..... .0/ RESPONDENT - 1/ APPELLANT BY : NONE .0 1/ RESPONDENT BY : MS. BHARTI SINGH 2 / DATE OF HEARING : 18/03/2021 2 / DATE OF PRONOUNCEMENT : 21/05/2021 / ORDER PER VIKAS AWASTHY J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-38 MUMBAI [HEREINAFTER REF ERRED TO AS THE CIT(A)] DATED 21.05.2019 FOR THE ASSESSMENT YEAR (AY) 2009- 10 CONFIRMING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 . 5986 //201 9 (. .2009-10 ) ITA NO.5986/MUM/2019 (A.Y.2009-10) 2. THE NOTICE OF APPEAL WAS SENT TO THE ASSESSEE TH ROUGH RPAD ON 19.02.2021 FOR APPEARANCE ON 18.03.2021. AS PER THE ACKNOWLEDG EMENT AVAILABLE ON RECORD THE NOTICE WAS DULY SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE NEITHER THE ASSESSEE/APPELLANT NOR ANY AUTHORISED REPRESENTATIV E (AR) OF THE ASSESSEE HAS APPEARED IN THE COURT. NO REQUEST SEEKING ADJOURNME NT HAS EITHER BEEN RECEIVED. IT APPEARS THAT THE ASSESSEE IS NO KEEN TO PURSUE H IS APPEAL BEFORE THE TRIBUNAL. THEREFORE THE APPEAL IS TAKEN UP FOR HEARING WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD. 3. MS. BHARTI SINGH REPRESENTING THE DEPARTMENT VEH EMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE PURCHASES AND THE DEALERS FROM W HOM BOGUS PURCHASE BILLS WERE PROCURED BY THE ASSESSEE. THE CIT(A) HAS RIGHT LY REJECTED VARIOUS CONTENTIONS RAISED BY THE ASSESSEE INCLUDING LEVY O F PENALTY ON ESTIMATED ADDITIONS. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DR AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. UNDISPUTEDLY THE ADDI TION IN THE CASE OF ASESSEE WAS MADE BY THE AO ON ACCOUNT OF ALLEGED BOGUS PURCHASE S FROM HAWALA DEALERS. THE AO DISALLOWED 12.5% OF TOTAL PURCHASES AND MADE ADD ITION OF RS. 19 00 771/-. THE ASSESSEE ASSAILED THE ADDITION BEFORE THE CIT(A). T HE CIT(A) RESTRICTED THE ADDITION TO RS. 12 16 494/- BY ESTIMATING GROSS PROFIT (GP) AT THE RATE OF 8%. THE AO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE E STIMATED ADDITION CONFIRMED BY CIT(A). THE AO VIDE ORDER DATED 21.03.2018 LEVIED PENALTY OF R. 3 75 897/-. 3 . 5986 //201 9 (. .2009-10 ) ITA NO.5986/MUM/2019 (A.Y.2009-10) 5. ON PERUSAL OF PENALTY ORDER DATED 21.03.2018 WE FIND THAT THE ASSESSEE HAD MADE A CATEGORIC SUBMISSION THAT NO PENALTY UND ER SECTION 271(1)(C) OF THE ACT IS TO BE IMPOSED ON ESTIMATED ADDITIONS. TO SUP PORT THIS CONTENTION RELIANCE WAS PLACED ON FOLLOWING DECISIONS: (1) CIT V/S HARPARSHAD & CO. LTD. [328 ITR 53 (DEL. )] (2) VIDYA SAGAR OSWAL V/S CIT [108 ITR 861 (P&H)]. (3) SAMUNDAR BHAN SADH V/S CIT [188 ITR 638 (P&H)] (4) CIT V/S MD. WARASAT HUSSAIN [171 ITR 405 (PATN A)] THE CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE AND UPHELD LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE A DDITIONS MADE BY AO BY ESTIMATING GP ON BOGUS PURCHASES. THE CIT(A) TO SUP PORT HIS DECISION RELIED ON FOLLOWING DECISIONS: (1) KALPAK BAZAR V/S CIT [1 TAXMANN.COM 215 (KARALA )] (2) CIT V/S HARPARSHAD & CO. LTD. [328 ITR 53 (DEL. )] (3) ITO V/S BHANSALI TRADING CORPORATION [2016] 69 TAXMANN.COM 60 (JAIPUR TRIB.) (4) NITESH G. THAKKAR (ITA NO. 215/AHD/2015 IN A.Y 2008-09. 6. UNDISPUTEDLY IN THE PRESENT CASE ADDITION WAS M ADE ON ESTIMATION OF GP ON BOGUS PURCHASES THERE ARE SEVERAL DECISIONS BY HONBLE HIGH COURTS IN SUPPORT OF THE VIEW THAT NO PENALTY UNDER SECTION 271(1)(C) IS TO BE LEVIED WHERE ADDITION IS MADE ON ESTIMATION BASIS. 7. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AERO TRADERS PVT. LTD. REPORTED AS 322 ITR 326 HAS HELD THAT NO PENALTY UN DER SECTION 271(1)(C) OF THE ACT CAN BE IMPOSED WHERE THE INCOME IS DETERMINED O N ESTIMATE BASIS. PENALTY 4 . 5986 //201 9 (. .2009-10 ) ITA NO.5986/MUM/2019 (A.Y.2009-10) BEING QUASI CRIMINAL PROCEEDINGS DUTY IS CAST UPON THE AO TO ESTABLISH GUILT OF THE ASSESSEE IN CONCEALING THE INCOME OR FURNISHING INA CCURATE PARTICULARS OF SUCH INCOME. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SUBHAS TRADING CO. REPORTED AS 221 ITR 110 HAS HELD THAT WHERE THE AO AFTER REJECTING ACCOUNTS OF THE ASESSEE HAS ASSESSED THE INCOME BY APPLYING EST IMATED GROSS PROFIT (GP) RATE NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. SIM ILAR VIEW HAS BEEN TAKEN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. S .P. BHATT REPORTED AS 97 ITR 440. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF CIT VS. SANGRUR VANASPATI MILLS LTD. REPORTED AS 303 ITR 53 HAS HEL D THAT WHERE AN ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATES AND NO CONCRETE EVIDENCE OF CONCEALMENT IS ESTABLISHED PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. 8. THERE ARE OTHER CATINA OF JUDGMENTS BY VARIOUS H ONBLE HIGH COURTS IN SUPPORT OF THE VIEW THAT NO PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT CAN BE LEVIED ON ESTIMATED ADDITIONS. THE CIT(A) HAS RELIE D ON SOME OF THE DECISIONS OF THE HONBLE HIGH COURTS WHERE CONTRARY VIEW HAS BEE N TAKEN. NO JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE HAS BEEN BROUGHT TO OUR NOTICE. UNDER SUCH CIRCUMSTANCES THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF K. SUBRAMANIAN V/S SIEMENS INDIA LTD. REPORTED AS 156 ITR 11 HAS HELD THAT WHEN TWO CONFLICTING DECISIONS OF NON-JURISDICTIONAL HIG H COURTS ARE AVAILABLE THE VIEW THAT FAVOURS THE ASSESSEE IS TO BE PREFERRED. 9. THUS IN THE LIGHT OF DECISIONS DISCUSSED ABOVE AND THE FACTS OF THE CASE WE REVERSE THE FINDINGS OF THE CIT(A) AND DELETE PENAL TY LEVIED UNDER SECTION 5 . 5986 //201 9 (. .2009-10 ) ITA NO.5986/MUM/2019 (A.Y.2009-10) 271(1)(C) OF THE ACT. THE IMPUGNED ORDER IS SET-ASI DE AND THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 21 ST DAY OF MAY 2021. SD/- SD/- ( M. BALAGANESH) (VIKAS AWASTHY) /ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI 6/ DATED: 21/05/2021 SK PS . 7 . 7 . 7 . 7 COPY OF THE ORDER FORWARDED TO : 1. - / THE APPELLANT 2. .0 / THE RESPONDENT. 3. 8 ( )/ THE CIT(A)- 4. 8 CIT 5. . . . . / DR ITAT MUMBAI 6. ; / GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI