ITO 17(1)(2), MUMBAI V. SHRI. ASHOKBHAI P CHAUDHARI, MUMBAI

ITA 26/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8778 (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: misc
• Appeal Filed On: 02-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Section: 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 26 / MUM . /201 9 ( ASSESSMENT YEAR : 20 09 10 ) INCOME TAX OFFICER WARD 17(1) (2), MUMBAI . APPELLANT V/S SHRI ASHOKBHAI P. CHAUDHARI 91, MAPLA HOUSE, 1 ST FLOOR MODI STREET, FORT, MUMBAI 400 001 PAN ACHPC5129M . RESPONDENT REVENUE BY : S HRI R. BHOOPATHI ASSESSEE BY : NONE DATE OF HEARING 0 9 .01.20 20 DATE OF ORDER 17.01.2020 O R D E R PER SAKTIJIT DEY. J.M. THE C APTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 9 TH OCTOBER 201 8 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 55 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 09 10. 2. THE DISPUTE IN THE PRE SENT APPEAL IS CONFINED TO THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN REDUCING THE DISALLOWANCE ON 2 SHRI ASHOKBHAI P. CHAUDHARI ACCOUNT OF NON GENUINE PURCHASES TO 8% AS AGAINST 12.5% OF MADE BY THE ASSESSING OFFICER. 3. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL AND IS ENGA GED IN THE BUSINESS OF TRADING IN OFFICE AND GENERAL STATIONE RY AND PRINTING ITEMS. FOR THE ASSESSMENT YEAR UNDER C ONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME ON 29 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 4,64,227. SUBSEQUENT L Y, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TA X DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH THE OFFICE OF THE DGIT (INV.), MUMBAI , THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN ENTITIES IDENTIFIED BY THE SALES TAX DEPART MENT AS HAWALA OPERATOR S , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURC HASES OF ` 17,37,554 , CLAIMED TO HAVE BEEN MADE FROM VARIOUS PARTIES . IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES WHICH WERE NOT TO THE SATISFACT ION OF THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE , 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 ACCOMMODATION BILLS. ACCORDINGLY, HE CONCLUDED THAT THE PURCHASES 3 SHRI ASHOKBHAI P. CHAUDHARI MADE BY THE ASSESSEE ARE NON GENUINE. HOWEVER, CONSIDERING THE FACTS OF THE CASE, THE ASSESSING OFFICER PROCEEDED TO ADD THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASE BY ESTIMATING @ 12.5%. ACCORDINGLY, HE MADE ADDITION OF ` 2, 17,194. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APP EALS) RESTRICTED THE ADDITION TO 8% OF THE NON GENUINE PURCHASES. 5. WHEN THE APPEAL WA S CALLED FOR HEARING, NEITHER THE ASSESSEE NOR ANY ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. EVEN , THERE IS NO APPLICATION FILED BY THE ASSESSEE SEEKING ADJOURNMENT . IN SUCH CIRCUMSTANCES, WE CONSIDER IT APPROPRIATE TO DISPOSE OF TH E APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. THOUGH, IT MAY BE A FACT THAT THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE TO PROVE THE DISPUTED PURCHASES, HOWEVER, HE HAS ACCEPTED THAT THE PURCHASES WER E MADE BY THE ASSESSEE FROM UN KNOWN SOURCES. FOR THESE REASONS ALONE, HE HAS NOT ADDED THE ENTIRE PURCHASES, BUT 4 SHRI ASHOKBHAI P. CHAUDHARI RESTRICTED THE ADDITION TO THE PROFIT ELEMENT BEING ESTIMATED AT 12.5%, WHICH HAS BEEN REDUCED TO 8% BY THE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE AND OVER ALL FACTS AN D CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE TO 8% OF THE NON GENUINE PURCHASES IS REASONABLE, HENCE, NEEDS NO INTERFERENCE. 7. 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 MUMB AI, 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