ITO 26 (1)(1), Mumbai V. AMARNATH MANJAYA SHETTY, Mumbai

ITA 1988/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4183 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UDAYA BHASKAR JAKKE
• Keywords: Corroborative evidences
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC ' BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 198 8 /MUM. /2019 ( ASSESSMENT YEAR : 20 11 12 ) INCOME TAX OFFICER WARD 26(1)(1), MUMBAI . APPELLANT V/S AMARNATH MANJAYA SHETTY C 407, ASHOK NAGAR SAROVAR CHS LTD. MILITARY ROAD, ANDHERI (EAST) MUMBAI 400 072 PAN AHZPS4865R . RESPONDENT REVENUE BY : SHRI UDAYA BHASKAR JAKKE ASSESSEE BY : NONE DATE OF HEARING 05 . 10 .2020 DATE OF ORDER 08.10.2020 O R D E R THE AFORESAID APPEAL HA S BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 26 TH OCTOBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 38 , MUMBAI , PERTAINING TO THE ASSESSMENT YEAR 20 09 10 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON GENUINE PURCHASES. 2 AMARNATH MANJAYA SHETTY 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE RESPONDENT ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OFF THE APPEALS EX PARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSINESS OF MANUFACTURING AIR CONDITIONING AND REFRIGERATOR EQU IPMENT THROUGH HIS PROPRIET ARY CONCERN SUJATA ENTERPRISES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 29 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 5,61,700. THE RETURN OF INCOME SO FILED BY THE ASSESSEE WAS INITIA LLY PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH DGIT (INV.), MUMBAI, THAT PURCHASES WORTH ` 16,72,709, CLAIMED TO HAVE BEEN MADE DURING THE YEAR F ROM RAJESHWARI METAL INDUSTRIES ARE NON GENUINE AS THE CONCERNED PARTY WAS IDENTIFIED AS A HAWALA OPERATOR, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED U PON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH PURCHASES THROUGH SUPPORTING EVIDENCE. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING 3 AMARNATH MANJAYA SHETTY OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTY . HOWEVER , AS ALLEGED BY THE ASSESSING OFFICER, NO REPLY WAS RECEIVED FROM THE PARTY CONCERN ED IN RESPONSE TO SUCH NOTICE. NOT BEING SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT THE PURCHASES ARE NON GENUIN E. HOWEVER, THE ASSESSING OFFICER ULTIMATELY DISALLOWED 25% OUT OF SUCH PURCHASES WORKING OUT TO ` 4,18,177, AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF THE FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 15.74% OF THE ALLEGED NON GENUINE PURCHASES. 6. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT , THE DOUBT REGARDING THE GENU INENESS OF THE DISPUTED PURCHAS ES WAS ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHAR ASHTRA. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THE FACT THA T THE ASSESSEE HAS PRODUCED SOME SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES. THE ONLY REASON FOR WHICH HE DID NOT ACCEPT THE PURCHASES TO BE GENUINE IS , THE ASSESSEE NEITHER COU LD PRODUCE THE CONCERNED PARTIES NOR COULD FURNISH TRANSPORTATION BILLS, WEIGHMENT BILLS, ETC. 4 AMARNATH MANJAYA SHETTY HOWEVER, THE VERY FACT THAT THE ASSESSING OFFICER DID NOT DISALLOW THE ENTIRE PURCHASE BUT HAS RESTRICTED THE DISALLOWANCE TO 25% OF THE ALLEGED NON GENUINE PURC HASES INDICATES THAT THE ASSESSING OFFICER ALSO BELIEVES THAT THE ASSESSEE HAD PURCHASED THE GOODS , THOUGH , MAY NOT BE FROM THE DECLARED SOURCE. THEREFORE, HE HAS PROCEEDED TO ADD THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. HOWEVER, THE ESTIMATION OF PR OFIT @ 25% IN MY VIEW IS ON MUCH HIGHER SIDE. THEREFORE, I FULLY AGREE WITH L EARNED COMMISSIONER (APPEALS) IN RESTRICT THE DISALLOWANCE TO 15.74% OF THE NON GENUINE PURCHASES. ACCORDINGLY, THE ORDER OF LEARNED COMMISSIONER (APPEALS) IS UPHELD BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED THROUGH NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, ON 08.10.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 08.10.2020 5 AMARNATH MANJAYA SHETTY COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, 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