DCIT - 19 (1), MUMBAI V. AAKASH DEVELOPERS, THANE

ITA 2279/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1243 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 2279 /MUM. /201 9 ( ASSESSMENT YEAR : 20 10 11 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 19(1), MUMBAI . APPELLANT V/S AAKASH DEVELOPERS SHOP NO.7, 8, 9, GAGAN SOLITAIRE VIVA JANGID HOUSING COMPLEX MANVEL PADA ROAD, VIRAR (E) THANE 401 305 PAN AAKFA8603R . RESPONDENT REVENUE BY : SHRI BRAJENDRA KUMAR ASSESSEE BY : NONE DATE OF HEARING 01 .1 2 .2020 DATE OF ORDER 14.12.2020 O R D E R PER SAKTIJIT DEY. J.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 31 ST JANUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 18 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010 11. 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE RESPONDENT ASSESSEE TO REPRESENT THE CASE. THERE IS NO 2 AAKASH DEVELOPERS APPLICATION SEEKING ADJOURNMENT EITHER. CONSIDERING THE NATURE OF DISP UTE, WE 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. 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS) WITH REGARD TO ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN THE BUSINESS OF BUILDING CONSTRUCTION ACTIVITY. FOR THE ASSESSMENT YEAR UNDER DISPUTE , THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 52,32,960. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WHILE VERIFYING THE RETURN OF INCOME FILED BY THE ASSESSEE NOTICED THAT THE ASSESSEE HAS SHOWN CONSTRUCTION EXPENDITURE OF ` 2,23,86, 834. AFTER CALLING FOR NECESSARY DETAILS RELATING TO THE CLAIM HE FOUND THAT THE ASSESSEE HAS SHOWN PURCHASES WORTH ` 16,92,976, FROM 57 PARTIES. TO VERIFY GENUINENESS OF PURCHASES CLAIMED TO HAVE BEEN MADE, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO 11 PARTIES ON RANDOM BASIS. AS OBSERVED BY THE ASSESSING OFFICER, OUT OF 11 PARTIES, TWO OF THE PARTIES COMPLIED WITH THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT. HOWEVER, THE NOTI CES ISSUED TO THE REST OF THE PARTIES RETURNED BACK UN SERVED. THEREFORE, THE ASSESSING OFFICER 3 AAKASH DEVELOPERS CALLED UPON THE ASSESSEE TO FURNISH LEDG ER COPY OF THE PARTIES WITH VAT/ TIN DETAILS, COPY OF BILLS, DELIVERY CHALLAN S , PROOF OF PAYMENT OF TRANSPORTATION EXPENS ES, ETC. IN RESPONSE TO THE QUERY RAISED, THE ASSESSEE FURNISHED SOME OF THE EVIDENCES. HOWEVER , AS NOTED BY THE ASSESSING OFFICER, THE ASSESSEE COULD NOT FURNISH PROOF FOR EXPENSES, GOODS RECEIVED NOTE, ETC. FURTHER, HE OBSERVED THAT AS PER THE INFORMATIO N RECEIVED FROM THE SALES TAX DEPARTMENT, SIX OF THE PARTIES HAVE BEEN IDENTIFIED AS SUSPICIOUS DEALER S . THUS, HE CALLED UPON THE ASSESSE E TO PRODUCE THE CONCERNED PARTIES. AS T HE ASSESSEE WAS UNABLE TO PRODUCE THE CONCERNED PARTIES, THE ASSESSING OFFICER TREATED PURCHASES WORTH ` 17,25,699, AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. AGGRIEVED WITH SUCH ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CO NTEXT OF FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE IMPUGN ED ASSESSMENT ORDER, OUT OF THE TOTAL PURCHASES OF ` 1,62,92, 976 MADE FROM 57 PARTIES, THE ASSESSING OFFICER HAS ULTIMATELY DOUBTED/ DISBELIEVE D THE PURCHASES FROM SIX PARTIES AMOUNTING TO ` 17,25,619. IT IS FURTHER REVEALED THAT THE DOUBT/ SUSPICION OF THE 4 AAKASH DEVELOPERS ASSESSING OFFICER ON THESE PURCHASES IS PRIMARILY DUE TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT. AS IT APPEARS, SINCE THE ASSESSEE WAS UNABLE TO PRODUCE THE CONCERNED PARTIES AND FURTHER , FAILED TO FURNISH SOME DOCUMENTARY EVIDENCES LIKE TR ANSPORTATION BILLS, GOODS RECEIVED NOTE, ETC., THE ASSESSING OFFICER HAS TREATED THE PURCHASES MADE FROM THE SIX PARTIES AS NON GENUINE. IT IS CLEAR FROM THE ASSESSMENT ORDER, THE ASSESSING OFF ICER HAS NOT DOUBTED THE SALES TURNOVER OF THE ASSESSEE. THUS, THE ISSUE WHICH REMAINS INCONCLUSIVE IS THE SOURCE OF PURCHASE. IN SUCH SITUATION, THE ENTIRE PURCHASES CANNOT BE DISALLOWED, BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR DISALLOWANCE. THAT BEING THE CASE, IN OUR CONSIDERED OPINION, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURCHASES BY ESTIMATING IT @ 12.5%. ACCORDINGLY, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) BY DISMISS ING THE GROUND S RAISED BY THE REVENUE. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2020 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 14.12.2020 5 AAKASH DEVELOPERS 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