ACIT-27(3), MUMBAI V. SANGEET KUMAR PABRA, MUMBAI

ITA 1925/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0310 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVANEESH TIWARI
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC III BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER I TA NO. 1925 /MUM. /2019 ( ASSESSMENT YEAR : 20 09 10 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 27 ( 3 ), MUMBAI . APPELLANT V/S SHRI SANGEET KUMAR PABRA B 3202, IMPERIAL HEIGHTS BEHIND OSHIWARA BUS DEPOT GOREGAON (WEST), MUMBAI 400 104 PAN AFWPP7620Q . RESPONDENT REVENUE BY : S HRI AVANEESH TIWARI ASSESSEE BY : NONE DATE OF HEARING 10 . 0 6 .20 20 DATE OF ORDER 17.06.2020 O R D E R TH E AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 18 TH SEPTEMBER 2009 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 25 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 09 10 . 2. WHEN THE CASE WAS CALLED FOR HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT ASSESSEE. THEREFORE , I PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING THE 2 SHRI SANGEET KUMAR PABRA LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 3. THE ISSUE RAISED BY THE REVENUE IN THE PRESENT APPEAL RELATES TO ADDITION MADE PARTLY SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) ON ACCOUNT OF NON GENUINE PURCHASES BEING PARTLY SUSTAINED BY LEARNED COMMISSIONER (APPEALS) . 4. BRIEF FACTS ARE, THE ASSESSEE , A N INDIVIDUAL , IS ENGAGED IN THE BUSINESS OF WORK S CONTRACTOR. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME IN THE REGULAR COURSE ON 18 TH SEPTEMBER 20 09 , DECLARING TOTAL INCOME OF ` 14,09,620 . SUBSEQUENTLY , ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX AUTHORITIES THROUGH THE INVESTIGATION WING OF THE DEPARTMENT INDICATING THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRIES PROVIDED BY HAWALA OPERATORS THROUGH BOGUS PURCHASE BILLS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES WORTH ` 10,42,218 , CL AIMED TO HAVE BEEN MADE DURING THE YEAR FROM T WO PARTIES. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALERS CALLING FOR 3 SHRI SANGEET KUMAR PABRA CERTAIN INFORMATION . H OWEV ER, ALL SUCH NOTICES RETURNED BACK UNSERVED. FURTHER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE TO ESTABLISH THE GENUINENESS OF PURCHASES. THUS, ULTIMATELY, THE ASSESSING OFFICER TREATED THE PURCHASES WORTH ` 10,42 ,218 , AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED WITH SUCH ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERI AL ON RECORD, THE LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 6. BEFORE ME, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE OBSERVATIONS OF THE ASSES SING OFFICER AND SUBMITTED THAT THE ASSESSEE HAVING FAILED TO PROVE THE GENUINENESS OF PURCHASES, THE ENTIRE AMOUNT REPRESENTING SUCH PURCHASES HAS TO BE ADDED. 7. HAVING CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, I FIND THAT THO UGH THE ASSESSEE MAY NOT HAVE BEEN ABLE TO PROVE THE GENUINENESS OF PURCHASES FROM THE DECLARED SOURCE, HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE ASSESSEE HAS EXECUTED CONTRACT WORK DURING THE YEAR. THEREFORE, IT GOES TO PROVE THAT THE ASSESSEE MUST HAVE PURCHASED 4 SHRI SANGEET KUMAR PABRA GOODS FROM SOME OTHER UNDISCLOSED SOURCE. IN SUCH CIRCUMSTANCES, AS OBSERVE BY THE LEARNED COMMISSIONER (APPEALS), NOT ONLY DIFFERENT HIGH COURTS , EVEN , DIFFERENT BENCHES OF THE TRIBUNAL HA VE HELD THAT THE ENT IRE PURCHASES CANNOT BE DISALLOWED, BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR ADDITION. THEREFORE, KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN IDENTICAL NATURE OF CASES, THE DECISION OF LEARNED COMMISSIONER (APPEALS) TO RESTRICT THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASE IS FAIR AND REASONABLE CONSIDERING THE RATE OF PROFIT ARISING IN SIMILAR NATURE OF BUSINESS. ACCORDINGLY, I UPHOLD THE ORDER OF LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED THROUGH CIRCULATION IN NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX ( APPELLATE TRIBUNAL) RULES, 196 3 . S SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE C I T(A); (4) THE C I T, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI