ITO-17(1)(1), MUMBAI V. MR. ABHAY KANTILAL SHAH, MUMBAI

ITA 1561/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6164 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 15-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1561 /MUM/201 9 ASSESSMENT YEAR: 20 1 1 - 12 ITO - 17(1)(1) ROOM NO.115, 1 ST FLOOR AAYKAR BHAWAN M.K.ROAD MUMBAI - 400 020 VS. MR. ABHAY KANTILAL SHAH 501, GIRIRAJ BUILDING SANT TUKARAM ROAD MUMBAI - 400 009 PAN NO. AA GPS3930H APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI UODAL RAJ SINGH (DR) DATE OF HEARING : 21/09 /2020 DATE OF PRONOUNCEMENT : 24 /09/2020 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE . THE RELEVANT ASSESSMENT YEAR IS 20 1 1 - 12 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 55 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT. 1961 (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 21/09/2020, NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE (AR) APPEARED BEFORE THE TRIBUNAL ON THE ABOVE DATE. AS THERE IS NON - COMPLIANCE BY THE ASSESSE E, WE ARE PROCEEDING TO DISPOSE - O FF THIS APPEAL AFTER EXAMIN ING THE MATERIALS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (DR). 2 ITA NO. 1561 /MUM/201 9 SHRI ABHAY KANTILAL SHAH 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2011 - 12 ON 28/09/2011, DECLARING TOTAL INCOME OF RS.3,09,5 41/ - . THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RESALE OF IRON & STEEL AND HE IS THE SOLE PROPRIETOR OF ABHAY K.SHAH & CO. THE ASSESSING OFFICER (AO) RECEIVED INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX (INV.), MUMBAI THAT THE ASSESSEE HAD MADE BO GUS PURCHASES FROM THE FOLLOWING HAWALA PARTIES DURING THE FY 2010 - 11 RELEVANT TO THE AY 2011 - 12 SR.NO. NAME OF THE HAWALA PARTIES AMOUNT (RS.) 1 DAKSHA ENTERPRISES 82,825 2 PAYAL ENTERPRISES 4,54,287 TOTAL 5,37,112 ON THE BASIS OF THE ABOVE INFORMATION , THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S.148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, IN RESPONSE TO THE NOTICE U/S.143(2) & 142(1), THE ASSESSEE FILED BEFORE THE AO COPIES OF (I) BANK STATEMENTS FOR THE FINANCIAL YEAR 2010 - 11, EVIDENCING THE PAYMENTS MADE TO THESE PARTIES; (II) LEDGER ACCOUNT OF ALL THE PARTIES; (III) PURCHASE INVOICES FROM THESE PARTIES AND (IV) SALE INVOICES AS ISSUED BY THE ASSESSEE AGAINST THE PURCHASES MADE. HOWEVER, THE AO WAS NOT CONVINCE D WITH THE ABOVE EXPLANATION /REPLY OF THE ASSESSEE FOR THE REASON THAT NO DIRECT EVIDENCE LIKE STOCK REGISTER, JOURNAL ETC., AND INDIRECT EVIDENCE SUCH AS DELIVERY CHALLANS, LORRY RECEIPTS, OCTROI PAYMENT, QUANTITY TALLY, CONFIRMATION FROM TRANSPORT OPERA TOR, GODOWN RENT, BANK ACCOUNT CLEARANCE CERTIFICATE ETC., WERE PRODUCED. CONSIDERING THE ABOVE FACTS, THE AO MADE AN ADDITION OF RS.5,37,112/ - . 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A). WE FIND THAT VIDE ORDER DATED 13/12/2018, THE LD.CIT(A) BY 3 ITA NO. 1561 /MUM/201 9 SHRI ABHAY KANTILAL SHAH FOLLOWING THE DECISION IN CIT VS. BHOLANATH POLY FAB (P.) LTD . (2013) 355 ITR 290 (GUJ.) DIRECTED THE AO TO ESTIMATE PROFIT @12.5% ON THE DISPUTED PURCHASES OF RS.5,37,112/ - . 4. BEFORE US, THE LD. DR SUBMITS THA T AS THE ASSESSEE FAILED TO FILE BEFORE THE A O STOCK REGISTER, DELIVERY CHALLANS, LORRY RECEIPTS, OCTROI PAYMENT, QUANTITY TALLY, THERE WAS NO SUFFICIENT COMPLIANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, IT IS STATED BY HIM THAT THE FULL ADDITION OF RS. 5,37,112/ - MADE BY THE AO BE CONFIRMED. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IN INSTANT CASE, AS MENTIONED EARLIER, THE ASSESSEE HAS FILED BEFORE THE AO COPIES OF (I) BANK STATEMENTS FOR THE F INANCIAL YEAR 2010 - 11, EVIDENCING THE PAYMENTS MADE TO THESE PARTIES; (II) LEDGER ACCOUNT OF ALL THE PARTIES; (III) PURCHASE INVOICES FROM THESE PARTIES AND (IV) SALE INVOICES AS ISSUED BY THE ASSESSEE AGAINST THE PURCHASES MADE. IN SUCH A SITUATION, THE AO COULD HAVE MADE FURTHER VERIFICATIONS /ENQUIRIES. HOWEVER, WITHOUT MAKING ANY VERIFICATION /ENQUIRY, THE AO HAS MADE THE FULL ADDITION OF RS.5,37,112/ - . IN SUCH A SITUATION LIKE THE ABOVE ONE, THE LD.CIT(A) HAS RIGHTLY RELIED ON THE JUDGMENT OF THE HON BLE GUJARAT HIGH COURT IN BHOLONATH POLY FAB (P) LTD . (SUPRA) AND DIRECTED THE AO TO ESTIMATE THE PROFIT @ 12.5% EMBEDDED IN THE DISPUTED PURCHASES OF RS.5,37,112/ - . IN VIEW OF THE ABOVE FACTS, WE UPHOLD THE ORDER OF THE LD.CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 4 ITA NO. 1561 /MUM/201 9 SHRI ABHAY KANTILAL SHAH ORDER PRONOUNCED THROUGH NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/ - SD/ - ( SAKTIJIT DEY ) (N.K. PRADHAN) JUDI CIAL MEMBER ACCOUNTANT MEMBER MUMBAI : DATED: 24 /09/2020 THIRUMALESH , SR.PS 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI