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TMI Blog2018 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... order for the deletion of the penalty as levied by the AO which was later confirmed by learned CIT(A). - Decided in favour of assessee. - I.T.A. No. 7643/Mum/2016 - - - Dated:- 3-1-2018 - SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri. Snehal Shah For The Revenue : Shri. Rajat Mittal ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 7643/Mum/2016 for assessment year 2010-11 is directed against the appellate order dated 02.09.2016 passed by learned Commissioner of Income-tax (Appeals)-52, Mumbai (hereinafter called the CIT(A) ) for assessment year 2010-11, appellate proceedings had arisen before learned CIT(A) from the penalty order passed by learned Assessing Officer (hereinafter called the AO ) u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the tribunal ) read as under:- The appellant objects to the order dated 24/11/2015 issued by the DCIT, Central Circle 4(3), CR-4, Mumbai, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate Limited was under control namely its Director Shri. Jagdish Mundra was also searched by Revenue u/s 132(1) being part of the search on Balaji group and gave statement on oath u/s. 132(4) on 13.05.2013, wherein in response to question no. 9, he stated on oath as under:- Sir, as stated in response to previous question, all these companies were either incorporated or purchased by Shri Ritesh Burad who then lends these concerns to me. These ore basically shell/paper/bogus concerns through which I give accommodation entries pertaining to sale and purchase of textile to various genuine concerns. No genuine business activity is carried out in any of the 17 concerns mentioned in response to question no. 9. The said concern Somu Textile Private Limited was registered at the residential address of the said Mr. Jagdish Mundra, Director of Somu Textile Private Limited. As per the AO, the assessee was not able to bring on record any evidence to demonstrate the genuineness of the transaction for the alleged purchases, and hence the A.O brought to tax by making an addition of a sum of ₹ 2,16,441/- as bogus purchases being unexplained expenses / accommodation entries, vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and held that M/s. Somu Textile Pvt. Ltd. is bogus concern which is indulging in providing accommodation entries. The AO observed that it was admitted by Shri. Jagdish Mundra, Director of Somu Textile Private Limited in an statement recorded on oath u/s 132(4) that no genuine business activity was carried out by this entity. It was observed by the AO that the assessee was found to have availed the benefits of accommodation entry to the tune of ₹ 2,16,441/- and the assessee is not able to bring evidence on record to prove genuineness of the transaction and hence there is a conscious concealment of income by the assessee. The AO levied penalty of ₹ 65,130/- u/s. 271(1)(c) for concealing the particulars of income and furnishing of inaccurate particulars of income vide penalty order dated 23-11-2015 passed by the AO u/s 271(1)(c). 4. The assessee filed first appeal before the learned CIT-A. The learned CIT(A) invoked explanation (1) r.w. explanation 5A to Section 271(1)(c) of the Act, and confirmed the penalty. However, it is observed by us on being pointed out by learned counsel for the assessee before us that learned CIT-A has confirmed the penalty of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder for the impugned A.Y and he submitted that assessee has made disclosure of ₹ 4 lacs for A.Y 2013-14 and ld. Counsel for the assessee brought to our notice page 4 of the assessment order wherein details of the voluntary disclosure of income made by the assessee was mentioned by the AO. The said assessment order dated 19-05-2015 passed by the AO u/s 143(3) r.w.s. 153A is placed in the file. It was submitted that it was a different company namely Balaji Telefilms Limited which made the voluntarily disclosure of ₹ 10.64 crores from AY 2007-08 to AY 2013-14 with respect to the bogus purchases including purchases made from M/s. Somu Textile Pvt. Ltd..Our attention was drawn to page 4 of the assessment order wherein details of the surrender/voluntary disclosure of income made by Balaji Telefilms Limited found mentioned. It was submitted that the assessee has duly purchases cloth from Somu Textile Private Limited and duly submitted supporting documents like bill, delivery challans, lorry receipt, entries in inward/ outward register lying at Godown. It was submitted that the assessee did not filed any appeal against the quantum order of the assessment passed by the AO keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries in inward/outward register lying at godown etc were submitted. It is also been shown before us that voluntarily surrender has been made by another group concern namely Balaji Telefilms Ltd. of ₹ 10,64,34,202/- on account of alleged bogus purchases from the period F.Y 2006-07 to 2012-13 through statement recorded on oath of Smt. Shobha Ravi Kapoor u/s 132(4) before Revenue on 02-05-2013.It is also demonstrated that no such voluntary disclosure was made by the assessee w.r.t. alleged bogus purchases. The Director of M/s Somu Textiles Private Limited Sh Jagdish C. Mundra was also searched on 30-04-2013 as part of the same search conducted by Revenue u/s 132(1). The Director of Somu Textiles Private Limited Sh. Jagdish C Mundra in his statement recorded on oath u/s 132(4) on 13-05-2013 admitted before Revenue that his concerns were engaged in providing accommodation entries of bogus purchases without supplying any material, as under : Sir, as stated in response to previous question, all these companies were either incorporated or purchased by Shri Ritesh Burad who then lends these concerns to me. These ore basically shell/paper/bogus concerns through which I give ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breached the principles of natural justice. The decision of Hon ble Supreme Court in the case of Andaman Timber Industries v. CCE in civil appeal no. 4228 of 2006 vide orders dated 02-09-2015 becomes relevant and applicable. We have also observed that Revenue is under mistaken belief that the assessee has made disclosure w.r.t. bogus purchases, while the fact of the matter is that it is another group company i.e. Balaji Telefilms Ltd. which made disclosures of ₹ 10.64 crores w.r.t. bogus purchases. The Revenue cannot extend the said voluntary disclosure made by another group concern namely Balaji Telefilms Limited w.r.t. bogus purchases for making additions in the hands of the assessee. If Revenue wanted to include the purchases of ₹ 2,16,441/- made by the assessee from Somu Textiles Private Limited being part of the voluntary disclosure u/s 132(4) to make additions in the hands of the assessee, it should have included the same being part of disclosure by the assessee in the statement recorded on oath u/s 132(4) of the said Smt Shobha Ravi Kapoor and in absence thereof the said disclosure as was made by said Smt. Shobha Ravi Kapoor is not sufficient to levy penalty as w ..... 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