SHRI SURESH N. BHANSALI (HUF), MUMBAI V. INCOME TAX OFFICER 19(3)(4), MUMBAI

ITA 2218/MUM/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9140 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Corroborative evidences; Accommodation entries
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 2218/MUM./2018 ( ASSESSMENT YEAR : 20 09 10 ) SHRI SURESH N. BHANSALI (HUF) 138/130, 2 ND FLOOR 3 RD KUMBHARWADA M.G. MAHIMTURA MARG MUMBAI 400 004 PAN AAPHS3063J . APPELLANT V/S INCOME TAX OFFICER WARD 19(3)(4), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : S.K. BEPARI DATE OF HEARING 04 . 12 .2018 DATE OF ORDER 14.12.2018 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 20 TH DECEMBER 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 52, MUMBAI, FOR THE ASSESSMENT YEAR 2009 10. 2 . WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. AS SEEN FROM THE RECORD, THE NOTICE OF HEARING ISSUED PER REGISTERED POST TO THE ASSESSEE HAS RETURNED BACK UN SERVED WITH THE POSTAL REMARK LEFT . IN VIEW OF THE 2 SHRI SURESH N. BHANSALI (HUF) AFOR ESAID, WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE QUA THE ASS ESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 . BRIEF FACTS ARE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING FERROUS AND NON FERROUS METAL S . FOR THE AS SESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 27 TH AUGUST 2009, DECLARING TOTAL INCOME OF ` 2,95,660. THOUGH, INITIALLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) ACCEPTING THE INCOME RETURNED, HOWEVER, SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AS WELL AS SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, REVEALING THAT PURCHASES WORTH ` 81,82,530, SHOWN TO HAVE BEEN MADE FROM SEVEN PARTIES ARE NOT GEN UINE AS SUCH PARTIES ARE HAWALA OPERATORS PROVIDING ACCOMMODATION ENTRIES ONLY, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF THE ASSESSMENT PROCEEDINGS, TO VERIFY TH E GENUINENESS OF PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE AFORESAID SEVEN PARTIES, THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT. HOWEVER, AS OBSERVED BY THE ASSESSING OFFICER, ALL SUCH NOTICES RETURNED BACK UN SERVED BY THE POST AL AUTHORITIES. THEREFOR E , THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCES TO PROVE GENUINENESS OF PURCHASES MADE. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, EXCEPT 3 SHRI SURESH N. BHANSALI (HUF) PRODUCING LEDGER ACCOUNTS , PURCHASE BILLS AND DETAILS OF PAYMENT, THE ASSESSEE DID NOT PRODUCE DELIVERY CHALLANS, LORRY RECEIPTS, TRANSPORTATION DETAILS TO PROVE ACTUAL DELIVERY OF GOODS. THEREFORE, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE CONCERNED PARTIES ARE NOT GE NUINE. HOWEVER, SINCE THE ASSESSEE HAD FURNISHED THE STOCK STATEMENT AND HAD MADE ENTRIES IN THE BOOKS OF ACCOUNT RECORDING THE PURCHASES, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE MUST HAVE PURCHASED THE GOODS FROM OPEN MARKET AND NOT FROM T HE DECLARED SOURCE. THUS, THE ASSESSING OFFICER PROCEEDED TO ESTIMATE THE PROFIT ELEMENT ON THE NON GENUINE PURCHASE OF ` 81,53,530 AT THE RATE OF 12.5% WHICH WORKED OUT TO ` 10,19,191. THE PROFIT SO ESTIMATED WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED WITH THE ADDITION MADE , THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 . AS COULD BE SEEN FROM THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE DID NOT APPEAR BEFORE THE LEARNED COMMISSIONER (APPEALS) BUT ONLY FILED WRITTEN SUBMISSIONS. ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, THOUGH, THE LEARNED COMMISSIONER (APPEALS) AGREED WITH THE ASSESSING OFFI CER THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PURCHASES MADE, HOWEVER, HE SUSTAINED THE ADDITION @ 9% OF THE NON GENUINE PURCHASES. 4 SHRI SURESH N. BHANSALI (HUF) 5 . WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE RESPECTIVE ORDERS PASSED BY THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PURCHASES MADE FROM THE DECLARED SOURCE BY FURNISHING COGENT EVIDENCE TO DEMONSTRATE ACTUAL DELIVER Y OF GOODS. THEREFORE, IN THESE CIRCUMSTANCES, THE PURCHASES MADE BY THE ASSESSEE CANNOT BE CONSIDERED TO BE GENUINE IN VIEW OF THE SPECIFIC INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT TH E CONCERNED PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE PURCHASED GOODS ARE HAWALA OPERATORS. THE ONUS WAS ENTIRELY UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES MADE THROUGH PROPER DOCUMENTARY EVIDENCES. THE ASSESSEE HAVING FAILED TO DO SO, T HE ASSESSEES CLAIM THAT PURCHASES MADE ARE GENUINE CANNOT BE ACCEPTED. THEREFORE, CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS). GROUNDS RAISED ARE DISMISSED 6 . IN THE RESULT, ASSESS EES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2018 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 14.12.2018 5 SHRI SURESH N. BHANSALI (HUF) 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 (ASSTT. REGISTRAR/SR.P.S) ITAT, MUMBAI