MAHASUKHLAL LAXMICHAND SHETH, MUMBAI V. ITO 14(2)(4), MUMBAI

ITA 208/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2617 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 21-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 09-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS KUSUM BANSAL
• Assessee Lawyers: KESHAV B BHUJLE
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H ,MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4497/MUM/2012 (ASSESSMENT YEAR : 2004-05) M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D VS. ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) ITA NO.5747/MUM/2012 (ASSESSMENT YEAR : 2004-05) ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. VS. M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D (APPELLANT) (RESPONDENT) ITA NO.208/MUM/2015 (ASSESSMENT YEAR : 2005-2006) M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D VS. ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) ITA NO.541 /MUM/2015 (ASSESSMENT YEAR : 2005-06) 2 ITA NOS. 208/MUM/2015 & ORS. ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. VS. M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D (APPELLANT) (RESPONDENT) ITA NO. 5265 /MUM/2014 (ASSESSMENT YEAR : 2006-07) M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D VS. ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) ITA NO.5604/ MUM/2014 (ASSESSMENT YEAR : 2006-07) ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. VS. M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D (APPELLANT) (RESPONDENT) ITA NO. 5266/MUM/2014 (ASSESSMENT YEAR : 2007-08) M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D VS. ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) ITA NO.5605/ MUM/2014 3 ITA NOS. 208/MUM/2015 & ORS. (ASSESSMENT YEAR : 2007-08) ITO -14(2)(4), 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021. VS. M/S MAHASUKHLAL LAXMICHAND SHETH, 59/60/61 KRISHNA GALLI, SWADESHI MAKET, KALBADEVI ROAD, MUMBAI-400092. PAN: AAAFM2568D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KESHAV B. BH UJLE (AR) REVENUE BY : MRS. KUSUM BANSAL (DR) DATE OF HEARING : 04.10.2016 DATE OF PRONOUNCEMENT : 07.10.2016 O R D E R PER BENCH; 1. THESE EIGHT APPEALS U/S 253 OF THE INCOME-TAX ACT A RE DIRECTED AGAINST THE ORDER FOR THE ASSESSMENT YEARS (AYS) 2004-05 TO 2007-08 I N THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE ACT. AS IN ALL APPEALS, THE COMMON GROUNDS OF APPEAL ARE RAISED BY ASSESSEE AS WELL AS BY REVE NUE. HENCE, ALL THE APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE BEING DECIDED BY A CONSOLIDATED ORDER TO AVOID CONFLICTING DECISION. FOR APPRECIATION OF FAC T, FIRST, WE ARE TAKING THE ITA NO. 4497 & 5747/MUM/2012 FOR ASSESSMENT YEAR (AY) 2 004-05. 2. IN BRIEF THE FACTS OF THE CASE AS REFERRED IN ASSES SMENT ORDER ARE THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF DEALING IN CLOTHE S FOR RELEVANT AY, THE ASSESSEE FILED RETURN OF INCOME ON 18.08.2005 DECLA RING TOTAL INCOME AT RS. 5,50,560/-. THE CASE WAS RE-OPENED U/S 147 OF THE A CT. ACCORDINGLY, NOTICE U/S 148 DATED 30.03.2011 WAS ISSUED ON THE ASSESSEE. IN THE RE-ASSESSMENT ORDER PASSED U/S143(3), THE AO MADE THE ADDITION OF RS. 5 1,09,995/- U/S 69. THE AO MADE THE ADDITION THAT THE ASSESSEE MADE PURCHASES FROM THE PERSONS WHOSE NAME WERE LISTED IN THE NAME OF HAWALA DEALER IN TH E RECORD OF SALES TAX /VAT DEPARTMENT OF GOVERNMENT OF MAHARASHTRA. THE ASSESS EE CARRIED THE MATTER IN APPEAL. BEFORE THE CIT(A) WHEREIN THE ASSESSEE CHAL LENGED THE VALIDITY OF RE- 4 ITA NOS. 208/MUM/2015 & ORS. OPENING AND THE ADDITION MADE IN THE ASSESSMENT ORD ER. IN THE APPEAL THE LD. CIT(A) UPHELD THE RE-OPENING OF ASSESSMENT. AND ON THE ADDITION IN THE QUANTUM ASSESSMENT, THE LD. CIT(A) RESTRICTED THE A DDITION @ 10% OF DISPUTED PURCHASES. THUS, FEELING AGGRIEVED THE ASSESSEE HAS CHALLENGED THE SUSTAINING OF 10% OF DISPUTED PURCHASES AND VALIDITY OF RE-OPENIN G. ON THE OTHER HAND, THE REVENUE HAS CHALLENGED BEFORE US THE DELETION OF 90 % OF THE ADDITION MADE BY AO. 3. WE HAVE HEARD THE LD. AR FOR THE ASSESSEE AND THE L D. DR FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR FOR THE ASSESSEE ARGUED THAT THE AO NOWHERE MENTIONED THAT THAT THE GOODS WERE A CTUALLY NOT PURCHASED AND SUBSEQUENTLY NOT SOLD. THE LD AR FOR ASSESSEE INVIT ED OUR ATTENTION TO VARIOUS DOCUMENTS RELATED WITH THE ACTUAL PURCHASES WHICH W AS PLACED ON RECORD BEFORE THE AO. THE LD AR FOR ASSESSEE FURTHER RELIED UPON THE DECISION OF BOMBAY HIGH COURT IN CIT VS NIKUNJ EXIMP ENTERPRISES. ON T HE OTHER HAND THE LD DR FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF THE AO AND CONTENDED THAT THE ASSESSEE COULD NOT PROVE THE GENUINENITY OF THE PUR CHASE AND WOULD ARGUE THAT ENTIRE ADDITION MADE BY AO BE UPHELD. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE LD AR FOR THE ASS ESSEE NOT ARGUED ANYTHING AGAINST THE VALIDITY OF THE REOPENING OF THE ASSESS MENT, THUS THE LEGAL GROUND RAISED IN THE APPEAL IS CONSIDERED AS NOT PRESSED A ND THE SAME IS DISMISSED. WE HAVE SEEN THAT THE AO MADE THE ADDITION ON THE BASI S THAT THE NAME OF THE DEALER FROM THE GOODS WERE PURCHASED APPEARED IN THE WEBSI TE OF THE SALE TAX DEPARTMENT OF MAHARASHTRA. THE SAID LIST WAS ISSUED ON THE BASIS OF THE DEFAULT IN NONPAYMENT OF VAT TO THE STATE GOVERNMENT. THIS FACT ITSELF DOES NOT PROVE THAT THOSE DEALERS WERE NOT MADE ANY SALE. WE HAVE FURTHER SEEN THAT WHILE CONSIDERING THE CONTENTION OF THE ASSESSEE THE LD CIT(A) CONSIDERED ALL THE FACT AND CONCLUDED THAT UNDER INCOME TAX ACT ONLY REAL I NCOME CAN BE TAXED. IT WAS FURTHER CONCLUDED THAT EVEN IF THE TRANSACTION IS N OT VERIFIABLE, THE ONLY TAXABLE IS THE TAXABLE INCOME COMPONENT AND NOT THE ENTIRE TRA NSACTION. AND CONSIDERING THE REASONABLE PERCENTAGE OF SUCH PURCHASES IN ORDE R TO FULFILL THE GAP OF REVENUE 5 ITA NOS. 208/MUM/2015 & ORS. LEAKAGE THE ADDITIONS WAS RESTRICTED TO 10% OF THE IMPUGNED PURCHASES. DURING THE COURSE OF HEARING NEITHER THE LD AR FOR THE ASS ESSEE NOR THE LD DR FOR THE REVENUE COULD SUBSTANTIATE AS TO HOW THE ORDER OF L D CIT(A) IS ERRONEOUS. THE ORDER OF THE LD CIT (A) IS BASED ON COGENT REASONIN G AND WE DO NOT FIND ANY INFIRMITY FOR OUR INTERFERENCE. THUS BOTH THE APPE AL BEING ITA NO. 4497/M2012 FILED BY ASSESSEE AND APPEAL ITA NO. 5747/MUM/2012 FILED BY REVENUE FOR ASSESSMENT YEAR (AY) 2004-05 ARE DISMISSED. 5. THE ASSESSEE AND THE REVENUE HAVE RAISED IDENTICAL GROUNDS OF APPEAL FOR AY 2005-06, 2006-07 AND FOR 2007-08, HENCE ALL THE APP EALS OF ASSESSEE AS WELL AS REVENUE ARE DISMISSED. NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH OCTOBER, 2016. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 07/10/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/