ITO 19(3)(2), MUMBAI V. SANKO STAINLESS STEEL, MUMBAI

ITA 24/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8784 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Assessee Lawyers: BHUMIKA
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 24 / MUM . /201 9 ( ASSESSMENT YEAR : 20 11 12 ) INCOME TAX OFFICER WARD 19(3)(2), MUMBAI . APPELLANT V/S SANKO STAINLESS STEEL SHOP NO.2, HAJI KASAM BUILDING 2 ND KHETWADI BACK ROAD MUMBAI 400 004 PAN AAYFS9841H . RESPONDENT REVENUE BY : SHRI R. BHOOPATHI ASSESSEE BY : MS. BHUMIKA DATE OF HEARING 09 .01.2020 DATE OF ORDER 17.01.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 31 ST OCTOBER 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 52 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 11 12 . 2. THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL IS WITH REGARD TO THE PART IAL REDUCTION OF THE ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 2 SANKO STAINLESS STEEL 3. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN TH E BUSINESS OF TRADING IN METAL ITEMS. FOR TH E ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER 2011 DECLARING TOTAL INCOME OF ` 62,846. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH THE OFF ICE OF THE DGIT (INV.), MUMBAI, THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN SUSPICIOUS DEALERS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES WORTH ` 30,79,448, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM THREE PARTIES. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES WHICH WE RE NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. FURTHER , TO INDEPENDENTLY VERIFY THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, ALL SUCH NOTICE S RETURNE D BACK UN SER VED. IN VIEW OF THE AFORESAID, THE ASSESSING OFFICER HELD THAT THE PURCHASES CLAIMED TO HAVE BEEN MADE ARE NOT GENUINE AND IN REALITY, THE ASSESSEE HAS PURCHASED SUCH GOODS FROM GREY MARKET AND TO REGULARIZE SUCH PURCHASES HAS OBTAINED ACCOMMO DATION BILLS. ACCORDINGLY, AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE UNDER SECTION 145(3) OF 3 SANKO STAINLESS STEEL THE ACT, THE ASSESSING OFFICER ESTIMATED THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURC HASES @ 12.5% AND ADDED BACK AN AMOUNT OF ` 3,84,936 . THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD , LEARNED COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW SET OFF OF GROSS PROFIT ALREADY SHOWN BY THE ASSES SEE AGAINST THE PROFIT ELEMENT OF 12.5%. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT, IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED VARIOUS DOCUMENTARY EVIDENCES , SUCH AS , PURCHASE BILLS, LEDGER ACCOUNT COPY, BANK STATEMENT, STOCK STATEMENT WITH QUANTITATIVE DETAI LS OF PURCHASE AND CORRESPONDING SALES, SALE BILLS, ETC. THE ASSESSING OFFICER TREATED THE PURCHASES AS NON GENUINE PRIMARILY FOR THE REASON THAT THE ASSESSEE COULD NOT FURNISH ANY DELIVERY CHALLAN AND TRANSPORTATION RECEIPT. FURTHER, NOTICE S ISSUED UNDER SECTION 133(6) OF THE ACT RETURNED BACK UN SERVED. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THAT THE DISPUTED PURCHASES HAVE BEEN MADE BY THE ASSESSEE , THOUGH , NOT FROM THE DECLARED SOURCE. FOR THIS REASON ALONE, THE ASSESSING OFFICER HAS ADDED ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. WHEREAS, LEARNED 4 SANKO STAINLESS STEEL COMMISSIONER (APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO SET OFF THE GROSS PROFIT ALREADY DECLARED AGAINST THE PROFIT ESTIMATED. IN OUR VIE W, THE AFORESAID DECISION OF LEARNED COMMISSIONER (A PPEALS) IS JUST AND PROPER, HENCE, DOES NOT REQUIRE INTERFERENCE. SINCE , THE ASSESSEE HAS ALREADY INCLUDED THE PURCHASES IN ITS ACCOUNT S AND OFFERED THE PROFIT DERIVED THERE FROM IN NORMAL COURSE, IT HAS TO BE GIVEN SET OFF OF SUCH PROFIT DECLARED AGAINST THE PROFIT ESTIMATED ON THE ALLEGED NON GENUINE PURCHASES. ACCORDINGL Y, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS). GROUNDS RAISED ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 17.01.2020 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.01.2020 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