ITO - WARD - 3 (1), THANE V. NILESH DHANJI NAGDA, THANE

ITA 2235/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4698 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAYA BHASKAR JAKKA
• Keywords: Corroborative evidences
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE S HRI S AKTIJIT DEY (J M) ITA NO. 2235 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 THE INCOME TAX OFFICER 3 (1), ROOM NO. 3, 6 TH FLOOR, B - WING, ASHAR IT PARK, ROAD NO. 16Z, WAGLE INDUSTRIAL EST ATE, THANE (W) - 400604 VS. SHRI NILESH DHANJI NAGDA, PROP. SUBODH ASSOCIATES, GALA NO. 2, PLOT NO. A65, ROAD NO. 21, WAGLE ESTATE, THANE - 400604 PAN: ADGPN1427R (APPELLANT) (RESPONDENT) REVENUE BY : SHRI UDAYA BHASKAR JAKKA ( 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 THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 01.02.2019 OF LEARNED COMMIS SI ONER OF INCOME TAX (APPEALS) - 2 , THANE PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 . 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 O F THE APPEAL EX - PARTE QUA T HE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APP EALS) IN THE MATTER OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE , THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSINESS AS A RESELLER OF BUILDING MATERIAL S. F OR TH E ASSESSMENT YEAR UNDER D ISPUTE, T HE ASSESSEE FILED HIS RETURN OF INCOME ON 31.09.2011 DECLARING TOTAL 2 ITA NO. 2 235 / MUM/2019 ASSESSMENT YEAR: 2 010 - 1 1 INCOME OF RS. 2,28,090/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143 (1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED F ROM THE SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY WAY OF NON GENUINE PURCHASES WORTH RS. 10,81,740/ - FROM ONE PARTY, T HE ASSESSING OFF ICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT . I N COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES THROUGH SUPPORTING EVIDENCE. IN RESPONSE TO THE QUERY RAISED , THE ASSESSEE FURNISHED VARIOUS DETAILS INCLUDING PURCHASE/ SALE REGISTER, BANK STATEMENT, PARTY WISE SALES/PURCHASES ETC. THE ASSESSING OFFICER HOWEVER WAS NOT FULLY SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE . TO I NDEPENDENTLY VERIFY THE GENUINENESS OF THE AFORESAID PURCHASES, THE ASSESSING OFFICER ISS UED NOTICE UNDER SECTION 133 (6) OF THE ACT TO THE SELLING DEALER. AS OBSERVED BY THE ASSESSI NG OFFICER, THE SAID NOTICE RETURN ED BACK UNSERVED. KEEPING IN VIEW THE AFORESAID FACTS , THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT THE PURCHASES ARE NON - GENUI NE . ACCORDINGLY, DISALLOWING SUCH PURCHASES HE ADDED BACK THE AMOUNT OF RS. 10,81,740/ - TO THE INCOME OF THE ASSESSEE . THE ASSESSEE CHALLENGED THE A FORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE I N THE CONTEXT OF FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 10.28% OF THE ALLEGED NON - GENUINE PURCHASES , WHICH WORKED OUT TO RS. 1,11,203/ - . 5. I HAV E CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPARTMEN TAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, IN COURSE OF ASSESSMENT PROCEEDINGS, AS PER THE ASSESSING OFFICER S O W N ADMISSION THE ASSESSEE FURNISHED HIS BOOKS OF ACCOUNT WITH AUDITED FINANCIAL STATEMENT S, BANK STATEMENTS, PURCHASE AND SALE REGISTER, PARTY WISE DETAILS OF SALES ETC. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY IN THE EVIDENCES FURNISHED. APART FROM THE INFORMATION RECEIVED FROM THE SALES T AX DEPARTMENT, THE OTHER REASONS FOR WHICH THE ASSESSING OFFICER DISALLOWED THE PURCHASES ARE , FIRSTLY , NOTICE ISSUED UNDER SECTION 133 (6) 3 ITA NO. 2 235 / MUM/2019 ASSESSMENT YEAR: 2 010 - 1 1 OF THE ACT RETURN ED BACK UNSERVED AND ON PHYSICAL ENQUIRY THE CONCERNED PARTY WAS FOUND TO BE UNTRACEABLE. FURTHER, THE ASSESSEE FAILED TO PRODUCE THE CON CERNED PARTIES BEFORE THE ASSESSING OFFICER. THESE REASONS LED THE ASSESSING OF FICER TO TREAT THE PURCHASES AS NON - GENUINE AND MAKE DISALLOWANCE OF SUCH PURCHASES. HOWEVER, FACT REMAINS , BEFORE THE ASSESSING OFFICER THE ASSESSEE HAD FURNISHED PARTY WISE DE TAILS OF SALES AND PURCHASES . IT IS ALSO A FACT THAT SALES E FFECTED BY THE ASSESSEE HAVE NOT BEEN DOUBTED. THE AFORESAID FACTORS PROVE THAT THE ASSESSEE MUST HAVE PURCHASED THE GOODS , THOUGH , MAY BE FROM UNVERIFIED SOURCES. IN SUCH CIRCUMSTANCES, ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR ADDITION. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFIRMITY IN THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO ONLY THE PROFIT ELEMENT WHICH HAS BEEN ESTIMATE D AT 10.28%. ACCORDINGLY, I UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) BY DISMISSED THE GROUNDS. 6. IN THE RESULT APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRON O UNCED IN THE OPEN COURT ON 15 TH OCTOBE R , 2020 . SD/ - S AKTIJIT DEY ( JUDICIAL MEMBER ) MUMBAI ; DATED: 15 / 10/2020 ALINDRA , PS 4 ITA NO. 2 235 / MUM/2019 ASSESSMENT YEAR: 2 010 - 1 1 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, I TAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGIS TRAR) , / ITAT, MUMBAI