ITO 6(3)(1), Mumbai V. FALCON INFOTECH PVT LTD., Mumbai

ITA 2219/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4700 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAYA BHASKAR JAKKE
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE S HRI S AKTIJIT DEY (J M) ITA NO. 2219/MUM/2019 ASSESSMENT Y EAR: 2009 - 10 THE INCOME TAX OFFICER 6(3)(1), 5 TH FLOOR, ROOM NO. 510, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S FALCON INFOTECH PVT. LTD., 6, SUGRA HOUSE, 2 ND FLOOR, ABDUL REHMAN STREET, PYDHONI, MUMBAI - 400003 PAN: AAACF4131A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI UDAYA BHASKAR JAKKE ( D R ) ASSESSEE BY : NONE DATE OF HEARING: 08/10/2020 DATE OF PRONOUNCEMENT: 15 / 10/2020 O R D E R PER S AKTIJIT DEY , JM 1. THIS IS AN APPEAL BY THE REVENUE AGAINST T HE ORDER DATED 10.01.2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 12, MUMBAI PERTAINING TO THE ASSESSMENT YEAR 2009 - 10. 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE APPEARED ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OF THE APPEAL EX - PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND BASED ON MATERIAL AVAILABLE ON RECORD. 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE , THE ASSESSEE , A RESIDENT COMPANY , IS ENGAGED IN THE BUSINESS OF TRADING IN COMPUTER SPARE PARTS. FOR THE ASSESSMENT YEAR 2 ITA NO. 2219/ MUM/2016 ASSESSMENT YEAR: 2009 - 10 UNDER DISPUTE THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.07.2009 DECLARING IN COME OF RS. 1,35,058/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIA LLY PROCESSED UNDER SECTION 143 (1) OF THE ACT. SUBSEQUENTLY, BASED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA AND DGIT (INV.), MUMBAI THAT THE ASSESSE E IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN ENTITIES IDENTIFIED BY SALES TAX DEPARTMENT AS HAWALA OPERATORS, THE ASSESSING OFFICER REOPENED TH E ASSESSMENT U/S 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES WORTH RS. 14,89,624/ - CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM THREE PARTIES. THOUGH, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES, HOWEVER , THE ASSESS ING OFFICER WAS NOT SATISFIED WITH THEM. FURTHER, THE ASSESSING OFFICER ALLEGED THAT THE NOTICES ISSUED BY HIM U/S 133 (6) OF THE ACT TO THE SELLING DEALERS FOR ASCERTAINING THE GENUINENESS OF PURCHASES ALSO RETURN ED BACK UNSERVED. BASED ON THE AFORESAID F ACTS, THE ASSESSING OFFICER ULTIMATELY TREATED THE PURC HASES OF RS. 14,89,624/ - AS NON - GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE . THE ASSESSEE CHALLENGED T HE AFORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) REDUCED THE ADDITION TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 5. I HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERU SED THE MATERIAL ON RECORD. IT IS EVIDENT , RELYING UPON THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, TH E ASSESSING OFFICER HAS TREATED THE PURCH ASE AS BOGUS. IT MAY ALSO BE A FACT THAT THE ASSESSEE FAILED TO FURNISH CERTAIN EVIDENCES CALLED FOR BY T HE ASSESSEE TO CONCLUSIVELY PROVE THE GENUINENESS O F PURCHASES. HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFI CER HAS NOT DISPUTED THE SALES E FFECTED BY THE ASSESSEE . THEREFORE, IN ABSENCE OF PURCHASES OF THE DISPUTED GOO DS THE ASSESSEE COULD NOT HAVE E FFECTED THE CORRESPONDING SALES. THEREFORE, IN 3 ITA NO. 2219/ MUM/2016 ASSESSMENT YEAR: 2009 - 10 SUCH CIRCUMSTANCES THE LOGICAL CONCLUSION WOULD BE, THE ASSESSEE MIGHT HAVE PURCHASED THE GOODS FROM UN - VERIFIED SOURCES TO SUPPRESS THE PROFIT ELEMENT. IN SUCH CIRCUMSTANC ES, THE ENTIRE PURCHASES CANNOT BE DISALLOWED BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED PER ADDITION. IN VIEW OF THE AFORESAID , I N MY CONSIDERED OPINION, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO 12.5% OF THE ALLEGED NON G ENUINE PURCHASES. ACCORDINGLY , I UPHOLD THE ORDER OF LEARNED COMMISSIONER (APPEALS ) BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 6. IN THE RESULT APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER , 2020 . SD/ - S AKTIJIT DEY ( JUDICIAL MEMBER ) MUMBAI ; DATED: 15 / 10/2020 ALINDRA, PS 4 ITA NO. 2219/ MUM/2016 ASSESSMENT YEAR: 2009 - 10 / 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.REG ISTRAR , / ITAT, MUMBAI