IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER)

AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT MEMBER)

I.T.A. No.865/Mum/2025 Assessment Year: 2009-10 Pratap Nagnaji Rajgor Vs. ITO 19(3)(1) Mumbai Room No. 94, 2^nd Floor, Matrumandir, Tardeo Badrika Ashram Bldg., 1st Mumbai 40007.

Khetwadi Lane, Mumbai

400004.

PAN: AAAPR7926C (Appellant) (Respondent)

Appellant by Shri. Prakash Pandit Respondent by Shri. Mukesh Thakwani SR. D.R.

Date of Hearing 24.03.2025 Date of Pronouncement 28.03.2025

ORDER

Per: Smt. Beena Pillai, J.M.:

The present penalty appeal filed by the assessee arises out of order dated 18/12/2024 passed by NFAC, Delhi for Assessment Year

2009-10 on following grounds of appeal:

1. “In the facts and circumstances of the case and in law the learned CIT(A) erred in confirming penalty of Rs. 6,17,790/- under section

271(1)(c) of the Act levied by the AO.

2. Reasons given by the CIT(A) for confirming penalty of Rs. 6,17,790/-

under section 271(1)(c) of the Act levied by the AO are wrong,

insufficient, and contrary to the facts and evidence on record.

3. he assessee craves leave to add, amend, alter, modify or omit any of

the aforesaid Grounds of Appeal as occasion may arise of demand.”

Brief facts of the case are as under:

2.The assessee is an individual carrying on business under proprietorship Firm M/s. Popular Metal at 2nd floor, R. No 94, Badrika Ashram Building, 1^st Khetwadi lane, Mumbai 400004. The assessee is a trader in ferrous and nonferrous metal. For A. Y. 2009-10 the assessee filed his return of income of 04/07/2009 disclosing total income of Rs. 2,70,934/-. The said return was processed under section 143(1) of the Act.

2.1. An information received from DGIT Investigation Mumbai, by stating that assessees have taken bogus hawala/accommodation entries from certain parties to inflate their purchases and to reduce taxable profit that surfaced out as per the investigation made by Sales Tax Department Government Of Maharashtra. The said reasons also provided names of the persons who issued alleged accommodation bills.

The Ld. AO observed that, the assessee received accommodation bills to the tune of Rs. 1,59,94,552/- during the year under cancerisation from eight parties. (Subsequently, the assessment was reopened by issuing of notice u/s. 148 r.w.s. 147 of the Act after recording reasons.)

2.2. During the reassessment proceedings, the Ld. AO called upon assessee to provide details of sales and purchases with full details of suppliers and purchasers along with their PAN, description of the goods sold and purchased, quantity, rate and amount, including details of purchases from said eight parties. The assessee provided said details from time to time which include all purchase bills, copy of ledger accounts, copy of bank statement showing that the payments of purchases and sales are by crossed cheques, item wise stock register showing movement of goods with reference to purchases and sales. The assessee also filed list of creditors and debtors.

2.3. The Ld. AO however, rejected assessee’s explanation on the ground that, Sales Tax Department conducted independent enquiry in respect of each of the hawala parties and has conclusively proved that the said parties were engaged in providing accommodation bills. On the basis of the said information from Sales Tax Department, the Ld. A.O. formed his opinion that the said bills produced by the assessee were to inflate the its purchases.

2.4 The Ld. AO thus, placing reliance on various decision observed vide order sheet noting dated 09/03/2015 that the assessee voluntarily agreed for 12.5% of disallowance of non-genuine purchase of Rs.1,59,94,552/-, amounting to Rs.19,99,319/-. The Ld. AO noted that, the assesse agreed to pay the taxes before 31/03/2015. The Ld. AO also initiated proceedings u/s. 271(1)(c) of the Act for filing inaccurate particulars of income in respect of the above.

2.5. Assesse filed appeal before Ld. CIT(A) against this the quantum who co