ITO-20(1)(1), Mumbai V. SHRI. ANOOP OKHIMJI SHETHIA (HUF), Mumbai

ITA 2398/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1245 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 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: 16-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: BRAJENDRA KUMAR
• Keywords: Unexplained expenditure; Corroborative evidences
• Section: 69C; 147

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. 2398 /MUM. /201 9 ( ASSESSMENT YEAR : 20 1 0 11 ) INCOME TAX OFFICER WARD 20(1)(1), MUMBAI . APPELLANT V/S SHRI ANOOP OKHIMJI SHETHIA (HUF) (PROP. M/S. INDO MARINE TRADERS) 206, BOAT HARD ROAD, QUARY STREET DARUKHANA, MUMBAI 400 010 PAN AAAHA4973Q . RESPONDENT REVENUE BY : AJAY SINGH ASSESSEE BY : SHRI BRAJENDRA KUMAR DATE OF HEARING 03.12 .2020 DATE OF ORDER 14.12.2020 O R D E R PER SAKTIJIT DEY. J.M. CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 15 TH FEBRUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 320, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010 11. 2 SHRI ANOOP OKHIMJI SHETHIA (HUF) 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 3. BRIEF FACTS ARE, THE ASSESSEE IS A HINDU UNDIVIDED FAMILY (HUF) AND IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL AS WELL AS MILD STEEL (M.S. ) PLATES . FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 26 TH SEPTEMBER 2010 DECLA RING TOTAL INCOME OF ` 18,97,650. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THROUGH DGIT (INV.), MUMBAI, INDICATING THAT PURCHASES WORTH ` 3 , 01,11,494, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM 10 PARTIES ARE NON GENUINE, AS THE CONCERNED PARTIES HAVE BEEN IDENTIFIED AS HAWALA OPERATOR S BY THE SALES TAX DEPARTMENT AND ARE ONLY PROVIDING ACCOMMODATION BILLS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES BY FURNISHING CERTAIN SUPPORTING EVIDENCES. AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEE WAS UNABLE TO FURNISH ALL THE SUPPORTING EVIDENCES CALLED FOR. THEREFORE , THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT THE PURCHASES MADE BY THE ASSESSEE ARE NON GENUINE. HOWEVER, RELYIN G UPON SOME JUDICIAL PRECEDENTS THE ASSESSING OFFICER DISALLOWED 25% OF THE ALLEGED NON GENUINE PURCHASES AND MADE 3 SHRI ANOOP OKHIMJI SHETHIA (HUF) ADDITION OF ` 75,27,874, AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. THE ASSESSEE CONTESTED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF THE FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO ` 19,87,359, BEING 6.6% OF THE ALLEGED NON GENUINE PURCHASES. 5. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTUAL MATRIX REVEALS THAT , THOUGH , THE ASSESSING OFFI CER HELD CERTAIN PURCHASES CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE AS NON GENUINE, HOWEVER, HE HAS NOT DOUBTED THE SALES TURNOVER SHOWN BY THE ASSESSEE . THIS, IN OTHER WORDS , MEANS THAT THE ASSESSEE HAS EFFECTED CORRESPONDING SALES AGAINST THE PURCHASES TREATED AS NON GENUINE. FOR THIS REASON ALONE, THE ASSESSING OFFICER INSTEAD OF DISALLOWING THE ENTIRE PURCHASES HAS DISALLOWED 25% OU T OF SUCH PURCHASES. L EARNED COMMISSIONER (APPEALS) HAVING FOUND THAT THE VAT RATE ON GOODS PURCHASED BY THE ASSESSEE IS 4 % , WHEREAS , THE ASSESSEE HAS A FALL IN GROSS PROFIT RATE SHOWN AT 5.9% IN THE IMPUGNED ASSESSMENT YEAR COMPARED TO THE PREVIOUS TWO YEARS , HAS RESTRICTED THE DISALLOWANCE TO 6.6% BEING THE DIFFERENCE BETWEEN THE PROFIT ELEMENT GENERALLY ESTIMATED IN CASE O F 4 SHRI ANOOP OKHIMJI SHETHIA (HUF) NON GENUINE PURCHASES @ 1 2.5% AND THE GROSS PROFIT RATE SHOWN BY THE ASSESSEE AT 5.9%. IN OUR VIEW, THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS) IS FAIR AND REASONABLE CONSIDERING THE FACT THAT THE PROFIT RATE AS PER INDUSTRY NORMS IN THE LIN E OF BUSINESS CARRIED ON BY THE ASSESSEE WOULD NOT BE MORE THAN WHAT HAS BEEN ESTIMATED BY THE LEARNED COMMISSIONER (APPEALS). IN VIEW OF THE AFORESAID, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED BY THE REVENU E. 6. 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 SHRI ANOOP OKHIMJI SHETHIA (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 ASSISTANT REGISTRAR ITAT, MUMBAI