SHRI MASINGRAM CHOUDHARY , MUMBAI V. INCOME TAX OFFICER 19(2)(3), MUMBAI

ITA 2530/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8016 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHATURVEDI
• Keywords: Reasonable cause; Corroborative evidences
• Section: 147; 133(6); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 2530 / MUM . /2018 ( ASSESSMENT YEAR : 20 09 10 ) SHRI MANSINGRAM CHOUDHARY 39/41, PARNAKUTI, 3 RD FLOOR PRABHU SHREE RAM MANDIR MARG 4 TH KUMBHARWADA, MUMBAI 400 004 PAN ADAPC1740L . APPELLANT V/S INCOME TAX OFFICER WARD 1 9 (2)( 3 ), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI V.K. CHATURVEDI DATE OF HEARING 2 6 . 12 .2018 DATE OF ORDER 02.01.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 2 ND JANUARY 2018 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 53 , MUMBAI, FOR THE ASSESSMENT YEAR 20 09 10 . 2 . WHEN THE APPEAL WAS CALLED FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE . ON EARLIER OCCASION ALSO, WHEN THE APPEAL WAS FIXED FOR HEARING NO ONE APPEARED ON BEHALF OF THE ASSE SSEE. FURTHER, IT IS SEEN FROM RECORD, THE HEARING NOTICE ISSUED BY THE REGISTRY TO THE ASSESSEE I N THE ADDRESS FOR COMMUNICATION FURNISHED IN COL. NO.10 OF 2 SHRI MANSINGRAM CHOUDHARY THE APPEAL MEMO HAS RETURNED BACK UN SERVED BY THE POSTAL AUTHORITY. FROM THE AFORESAID FACTS IT IS VERY MUCH CLEAR , THE ASSESSEE IS NOT DILIGENT IN PURSING THE PRESENT APPEAL. THEREFORE, I PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 3 . THE REGISTRY HAS POINTED OUT A DELAY OF 39 DAYS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAS FILED A N APPLICATION DATED 3 RD APRIL 2018, EXPLAINING THE CAUSE OF DELAY AND SEEKING CONDONATION THEREOF. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE IN THE DELAY CONDONATION APPLICATION AND THE ACCOMPANYING DOCUMENT S , I AM OF THE VIEW THAT THE DELAY I N FILING THE APPEAL WAS DUE TO A REASONABLE CAUSE. ACCORDINGLY, I CONDONE THE DELAY OF 39 DAYS AND ADMIT THE APPEAL FOR HEARING ON MERIT. 4 . THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO ADDITION MADE OF ` 15,51,965, ON ACCOUNT OF NON GENUINE PURCHASES. 5 . BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS CARRYING ON BUSINESS IN FERROUS AND NON FERROUS METAL THROUGH HIS PROPRIETARY CONCERN M/S. CANARA STEEL INDIA. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 11 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 5,92,950. INITIALLY, THE RETURN OF 3 SHRI MANSINGRAM CHOUDHARY INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT AS WELL AS SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH ` 1,24,13,558, CLAIMED TO HAVE BEEN MADE FROM EIGHT PARTIES ARE NOT GENUINE AS SUCH PARTIES HAVE BEEN IDENTIFIED AS HAWALA OPERATORS PROVIDING ACCOMMODATION BI LLS ONLY. ON THE BASIS OF SUCH INFORMATION, 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 GENUINENESS OF PURCHASES THROUGH PROPER DOCUMENTARY EVIDENCES. FURTHER, TO VERIFY THE GENUINENESS OF THE TRANSACTIONS BETWEEN THE PARTIES THE ASSESSING OFFICER CONDUCTED INDEPENDENT ENQUIRY BY ISSUING NOTICES UNDER SECTION 133(6) OF THE ACT. AS OBSERVED BY THE ASS ESSING OFFICER, ALL SUCH NOTICES RETURNED BACK UNSERVED BY THE POSTAL AUTHORITIES. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PRODUCE THE PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE PURCHASED THE GOODS. SINCE THE ASSESSEE WAS UNABLE TO EITHER PRODUCE THE C ONCERNED PARTIES OR ANY SUPPORTING EVIDENCE TO CONCLUSIVELY PROVE THE GENUINENESS OF PURCHASES , THE ASSESSING OFFICER HELD THAT THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE CONCERNED PARTIES ARE NOT GENUINE. ACCORDINGLY, HE REJECTED THE BOOKS OF ACCOUN T OF THE ASSESSEE UNDER SECTION 145(3) OF THE ACT. HAVING DONE SO, THE 4 SHRI MANSINGRAM CHOUDHARY ASSESSING OFFICER RELYING UPON CERTAIN JUDICIAL PRECEDENTS PROCEEDED TO ESTIMATE THE PROFIT @ 12.5% OF THE NON GENUINE PURCHASES WHICH WORKED TO ` 15,51,695. THE ASSESSING OFFICER ADDED BACK THE AFORESAID AMOUNT TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE LEARNED COMMISSIONER (APPEALS). 6 . SINCE THE ASSESSEE DID NOT APPEAR BEFORE THE LEARNED COMMISSIONER (APPEALS) ON THE DATES FIXED FOR HEARING OF APPEAL, LEARNED COMMISSIONER (APPEALS) RELYING UPON THE MATERIALS ON RECORD DISPOSED OFF THE AP PEAL BY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. 7 . I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, THE ASSESSING OFFICER RECEIVED SPECIFIC INFORMATION FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA AS WELL AS INVESTIGATION WING OF THE DEPARTMENT THAT PURCHASES WORTH ` 1,24,13,558, CLAIMED TO HAVE BEEN MADE FROM EIGHT PARTIES ARE NOT GENUINE. IT IS EVIDENT, DURING THE ASSES SMENT PROCEEDINGS THE ASSESSING OFFICER HAS PROVIDED OPPORTUNITY TO THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES BY PRODUCING CONCERNED PARTIES AS WELL AS OTHER DOCUMENTARY EVIDENCES LIKE DELIVERY CHALLAN, TRANSPORT RECEIPT, OCTROI RECEIPT, WEIGHBRIDGE RECEIPT, EXCISE GATE PASS, GOODS INWARD REGISTER, ETC. HOWEVER, THE ASSESSEE HAS FAILED TO COMPLY TO THE 5 SHRI MANSINGRAM CHOUDHARY AFORESAID DIRECTION OF THE ASSESSING OFFIC ER. EVEN , THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES RETURNED BACK UN SERVED. THEREFORE, THE PURCHASES CLAIMED TO HAVE BEEN MADE REMAINED UNVERIFIED. HOWEVER, RELYING UPON CERTAIN DECISIONS, THE ASSESSING OFFICER HAS ADDED BACK THE PROFIT ELEMENT EMBEDDED IN THE B OGUS PURCHASE BY ESTIMATING IT AT 12.5%. IT IS RELEVANT TO OBSERVE , NEITHER BEFORE THE LEARNED COMMI SSIONER (APPEALS) NOR BEFORE ME THE ASSESSEE HAS APPEARED AND PRODUCED ANY SUBSTANTIVE EVIDENCE TO CONTROVERT THE FACTUAL FINDING OF THE ASSESSING OFFICER. KEEPING IN VIEW THE AFORESAID FACTUAL POSITION, I DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE DEPARTMENTAL AUTHORITIES ON THE ISSUE . ACCORDINGLY, GROUNDS ARE DISMISSED. 8 . IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.01.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 02.01.2019 6 SHRI MANSINGRAM CHOUDHARY 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 (SR. PRIVATE SECRETARY) ITAT, MUMBAI