NAVAZISH J. VIRANI, MUMBAI V. ACIT 20(2), MUMBAI

ITA 2631/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48862 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: M P MAKHIJA
• Keywords: Business income
• Section: 69C; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI T R SOOD, ACCOUNTANT MEMBER I T A NO: 2631/MUM/2010 (ASSESSMENT YEAR: 2006-07) SHRI NAVAZISH J VIRANI, MUMBAI APPELLANT (PAN: AABPV0084A) VS ASSISTANT COMMISSIONER OF INCOME TAX RESPONDENT 20(2), MUMBAI APPELLANT BY: MR M P MAKHIJA RESPONDENT BY: MS ASHIMA GUPTA O R D E R R V EASWAR, PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGIN G THE ADDITION OF ` 2,93,280/- TO THE BUSINESS INCOME ON ACCOUNT OF BOG US PURCHASES, INVOKING SECTION 69C OF THE INCOME TAX A CT, 1961. 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE PUR CHASE AND SALE OF OIL USED IN THE MANUFACTURE OF SOAP. IN RE SPECT OF THE ASSESSMENT YEAR 2006-07, HE FILED RETURN OF INCOME DECLARING INCOME OF ` 19,44,804/- ALONG WITH THE PROFIT & LOSS ACCOUNT, BALANCE SHEET, AUDIT REPORT, ETC. THE RETURN WAS F IRST PROCESSED UNDER SECTION 143(1) BUT LATER NOTICE WAS ISSUED UN DER SECTION 143(2) OF THE ACT TO SCRUTINIZE THE SAME. IN THE C OURSE OF THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER SENT NOT ICE UNDER SECTION 133(6) TO M/S MAHAVIR FOODS & FATS OF MASJI D BUNDER, ONE ITA NO: 2631/MUM/2010 2 OF THE PARTIES FROM WHOM THE ASSESSEE MADE PURCHASE OF OIL, IN ORDER TO VERIFY THE GENUINENESS OF THE PURCHASES OF ` 2,93,280/- MADE BY THE ASSESSEE FROM THE SAID PARTY. THE NOTI CE CAME BACK UNSERVED. THE ASSESSEE HOWEVER FILED A CONFIRMATIO N LETTER FROM M/S MAHAVIR FOODS & FATS. THE ASSESSING OFFICER NO TED THAT THE ADDRESS SHOWN THEREIN WAS DIFFERENT FROM THE ONE TO WHICH HE HAD ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT. HE THEREFORE SENT ANOTHER NOTICE TO THE ADDRESS SHOWN IN THE CONFIRMA TION LETTER BUT THAT NOTICE ALSO CAME BACK UNSERVED. THE ASSESSING OFFICER THEREFORE DEPUTED THE INSPECTOR TO MAKE ENQUIRIES. THE INSPECTOR VISITED THE ADDRESS SHOWN IN THE NOTICE ISSUED UNDE R SECTION 133(6) BUT THE PREMISES WERE FOUND LOCKED. HE FOUND THAT SOMEBODY ELSES NAME APPEARED OUTSIDE THE DOOR. HE ACCORDIN GLY WENT TO THE OTHER ADDRESS, NAMELY, THE ONE SHOWN IN THE CONFIRM ATION LETTER. THERE ALSO SOME OTHER PERSONS WERE WORKING AND NOT THE SAID M/S MAHAVIR FOODS & FATS. THOUGH TWO OF THOSE PERSONS WERE IN THE BUSINESS OF SUPPLYING OIL, NONE OF THEM ANSWERED TO THE NAME OF M/S MAHAVIR FOODS & FATS. 3. ON THE ABOVE FACTS THE ASSESSING OFFICER ASKED T HE ASSESSEE TO PRODUCE THE SUPPLIER OF OIL. THE ASSES SEE COULD NOT COMPLY WITH THE SAME. THE ASSESSING OFFICER ACCORD INGLY DISALLOWED AND ADDED BACK THE PURCHASES OF ` 2,93,280/- BY INVOKING SECTION 69C OF THE ACT. 4. THE ABOVE HAVING BEEN CONFIRMED BY THE CIT(A), T HE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. ITA NO: 2631/MUM/2010 3 5. WE HAVE CAREFULLY CONSIDERED THE FACTS AND THE R IVAL CONTENTIONS. THE ASSESSEE HAS PRODUCED THE BILL OF M/S MAHAVIR FOODS & FATS (PAGE 9 OF THE PAPER BOOK) BEFORE THE ASSESSING OFFICER. IT IS SEEN THAT THE BILL CONTAINS THE BOM BAY AND CENTRAL SALES TAX REGISTRATION NUMBERS. SALES TAX HAS ALSO BEEN COLLECTED BY THE SUPPLIER. THE CONFIRMATION LETTER , A COPY OF WHICH IS AT PAGE 8 OF THE PAPER BOOK, SHOWS THAT M/S MAHAVIR FOODS & FATS SUBMITTED THE COPY OF ACCOUNT OF THE ASSESSEE COMPA NY IN THEIR BOOKS, AS ALSO GAVE THE PERMANENT ACCOUNT NUMBER IN ITS REPLY TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT. AT PAGES 11 TO 13 OF THE PAPER BOOK, THE ASSESSEE HAS ALSO PLACED COPY OF THE ACCOUNTS SENT BY THE ASSESSEE TO M/S MAHAVIR FOODS & FATS FOR CONFIRMATION AND M/S MAHAVIR FOODS & FATS HAVE SIGN ED THE CONFIRMATION AND HAS ALSO GIVEN THE INCOME TAX FILE NUMBER. THE COPY OF THE ACCOUNTS SHOW THAT THERE IS AN OPENING CREDIT BALANCE IN FAVOUR OF THE SUPPLIER ON 01.04.2005 FOR ` 2,81,300/-. FURTHER PURCHASES WERE MADE ON 01.07.2005 FOR ` 2,93,280/- TAKING THE TOTAL CREDIT BALANCE TO ` 5,74,580/- AS ON 31.03.2006. THIS WAS UNPAID AS ON 31.03.2007. HOWEVER, IN THE FINANCIAL YEAR 01.04.2007 TO 31.03.2008 THE ENTIRE CREDIT BALANCE HAS BEEN PAID ON VARIOUS DATES BY CHEQUES AS SHOWN BY THE COPY OF ACCOUNT PLACED AT PAGE 13 OF THE PAPER BOOK. THESE FACTS S HOW THAT THE SUPPLIER OF OIL IS AN EXISTING PARTY WHO IS ALSO BO RNE ON THE RECORD OF THE SALES TAX AUTHORITIES AND THE INCOME TAX AUTHOR ITIES. THE ASSESSEE HAS MADE PAYMENT THROUGH BANK AND IT IS NO BODYS CASE THAT THESE AMOUNTS HAVE COME BACK TO THE ASSESSEE. AT PAGE 10 ITA NO: 2631/MUM/2010 4 OF THE PAPER BOOK, THE ASSESSEE HAS SHOWN THE DETAI LS OF SALES MADE OUT OF THE PURCHASES MADE FROM M/S MAHAVIR FOO DS & FATS. THESE DETAILS SHOW THAT OIL PURCHASED FOR ` 2,93,280/- FROM M/S MAHAVIR FOODS & FATS HAS BEEN SOLD TO FIVE DIFF ERENT PARTIES FOR ` 4,01,306/-. IT HAS BEEN CERTIFIED THAT THESE DETAI LS HAVE BEEN GIVEN BEFORE THE CIT(A). IT THEREFORE SEEMS TO US THAT T HERE IS NO JUSTIFICATION FOR DOUBTING THE GENUINENESS OF THE P URCHASES MADE FROM M/S MAHAVIR FOODS & FATS DURING THE RELEVANT P REVIOUS YEAR. WE THEREFORE DELETE THE DISALLOWANCE OF ` 2,93,280/- AND ALLOW THE APPEAL FILED BY THE ASSESSEE WITH NO ORDER AS TO CO STS. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY 2011. SD/- SD/- (T R SOOD) (R V EASWAR) ACCOUNTANT MEMBER PRESIDE NT MUMBAI, DATED 25 TH MAY 2011 SALDANHA COPY TO: 1. SHRI NAVAZISH J VIRANI A/1 DARUL KARIM, FIDAI BAUG ANDHERI (WEST), MUMBAI 400 058 2. ACIT 20(2), MUMBAI 3. CIT-20, MUMBAI 4. CIT(A)-31, MUMBAI 5. DR B BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI