TRIUM INFO SOLUTIONS PVT. LTD., MUMBAI V. INCOME TAX OFFICER 13(3)(2), MUMBAI

ITA 2884/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3632 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP GANDHI
• Section: 11; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO S . 2883 & 2884 /MUM/201 8 (A.Y S : 2010 - 11 & 2011 - 12) M/S. TRIUM INFO SOLUTIONS PVT. LTD., 602, QUATU M TOWER, RAM BAUG, NEW CHINCHOLI PHATAK, S.V. ROAD, MALAD (W) MUMBAI 400 064 PAN: AACCT 6673 K V. COMMISSIONER OF INCOME TAX (APPEALS) 21 MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANDEEP GANDHI DEPARTMENT BY : SHRI RAJESH OJHA DATE OF HEARING : 2 4 .01.2019 DATE OF PRONOUNCEMENT : 20 .02 .2019 O R D E R PER C. N. PRASAD (JM) 1. THESE TWO APPEAL S ARE FILED BY THE ASSESSEE AGAINST DIFFERENT ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER IN SHORT LD.CIT(A)] FOR THE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12. 2. FIRST WE TAKE UP THE APPEAL FOR THE A .Y. 2011 - 12. THE FIRST ISSUE IN THE GROUNDS OF APPEAL IS RELATING TO ESTIMATING THE PROFIT ELEMENT FROM PURCHASES AT 12.5% AS A GAINST 25% MADE BY THE ASSESSING OFFICER. 2 ITA NOS. 2883 & 2884/MUM/2018 M/S. TRIUM INFO SOLUTIONS PVT. LTD., 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT , ASSESSEE IS INTO TRADING IN COMPUTERS AND PURCHASES ARE GENUINE , ALL THE INFORMATION HAS BEEN FILE D . THEREFORE, THERE IS NO JUSTIFICATION IN TREATING T HE PROFIT ELEMENT @12.5% FROM THE PURCHASES. IT IS SUBMITTED THAT THE GROSS PROFIT RATIO FOR TH E PAST FOUR YEARS IS LESS THAN 1 % , T HEREFORE 12.5% ESTIMATION IS NOT JUSTIFIED. 4. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSI ONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THIS ASPECT O F THE MATTER HAS BEEN CONSIDERED BY THE LD. CIT(A) WITH REFERENCE TO THE INFORMATION FURNISHED BY THE ASSESSEE AS WELL AS THE AVERMENTS OF THE ASSESSING OFFICER AND CONCLUDED THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER @ 25% IS EXCESSIVE AND T HEREFORE, THE SAME IS REDUCED TO 12.5%. IT IS ALSO THE OBSERVATION OF THE LOWER AUTHORITIES THAT NOTICE ISSUED U/S. 133(6) HAVE BEEN RETURNED UNSERVED AND ASSESSEE COULD NOT PROVE THE GENUINE NESS OF THE PURCHASES. TAKING THE TOTALITY OF FACTS AND CIRCUMSTANCES INTO CONSIDERATION, WE ARE OF THE VIEW THAT THE ESTIMATION OF THE PROFIT ELEMENT AT 12.5% IS EXCESSIVE AN D T HEREFORE WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 8% A ND COMPUTE THE INCOME ACCORDINGLY. 6. SECOND ISSUE IN THE GROUNDS OF APPEAL IS IN RESPECT OF ADDITION OF . 16,600/ - MADE FROM FIXED ASSETS . 3 ITA NOS. 2883 & 2884/MUM/2018 M/S. TRIUM INFO SOLUTIONS PVT. LTD., 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT , ASSESSEE HAS PRODUCED THE BILLS BEFORE THE LD. CIT(A) WHICH ARE PLACED IN PAPER BOOK AT PAGE NO S . 126 & 127 AND THIS WAS NOT CONSIDERED BY THE LD. CIT(A) , S INCE THE BILLS ARE AVAILABLE AND NO DISALLOWANCE CAN BE MADE. IT IS FURTHER SUBMITTED THAT , THE ONLY ALLEGATION BY THE ASSESSING OFFICER IS THAT THE ASSESSEE COULD NOT PROVE THE PURCHASES OF THE MACHINERY , SINCE BILLS ARE AVAILABLE IT IS PRAYED THAT THE ADDITION BE DELETED. CONSIDERING THE SUBMISSIONS AND O N A PERUSAL OF THE INVOICES , WE FIND THAT SINCE THESE BILLS ARE NOT AVAILABLE WITH THE ASSESSIN G OFFICER THIS MATTER HAS TO GO BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION. THUS , WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE BILLS AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 8. LAST AND THE THIRD ISSUE IN APPEAL OF THE ASSESS EE IS ADHOC DISALLOWANCE OF 10% OF THE ADMINISTRATIVE EXPENSES FOR WANT OF DOCUMENTARY EVIDENCES, WHICH W AS SUSTAINED BY THE LD. CIT(A). 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT , BEFORE THE LD. CIT(A) MAJOR PART OF THE BILLS FOR EXPENSES HAVE BEEN SUBMI TTED AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING THE 10% OF THE ENTIRE PURCHASES WITHOUT LOOKING INTO THE NATURE OF EXPENSES. IT IS SUBMITTED THAT FOR SOME OF THE SMALL EXPENSES LIKE TEA A ND COFFE E THERE WILL N OT BE ANY BILLS. CONSID ERING T HE SUBMISSIONS OF THE ASSESSEE AND PERUSAL OF THE 4 ITA NOS. 2883 & 2884/MUM/2018 M/S. TRIUM INFO SOLUTIONS PVT. LTD., ORDERS OF THE AUTHORITIES BELOW , WE FIND THAT THERE IS NO SPECIFIC DEFECT POINTED BY THE ASSESSING OFFICER IN MAKING DISALLOWANCE . IT IS ONLY A GENERAL REMARK THAT IN THE ABSENCE OF DOCUMENTARY EVIDENCES T HE EXPENSES WERE DISALLOWED. NO SPECIFIC FINDING BY THE ASSESSING OFFICER IN WHICH PART OF THE EXPENSES IS LACKING DOCUMENTARY EVIDENCES. THEREFORE, ADHOC DISALLOWANCE OF 10% MADE ASSESSING OFFICER IS NOT JUSTIFIED. THIS GROU ND IS ALLOWED. ITA.NO. 2883/MUM/2018 (A.Y. 2010 - 11) 10. COMING TO THE APPEAL FO R THE A .Y. 2010 - 11 , GROUND NO. (A) IS IN RESPECT OF ESTIMATION OF PROFIT ELEMENT ON PURCHASES , A S WE HELD FOR THE A .Y. 2011 - 12 THAT THE ESTIMATION OF PROFIT ON PURCHASES SHALL BE MADE @8% THE ASSESSING OFFICER IS DIRECTED TO RE STRICT THE DISALLOWANCE TO 8%. 11. GROUND NO. (B) OF GROUNDS OF APPEAL IS SIMILAR TO THE GROUND RAISED BY THE ASSESSEE IN A .Y. 2011 - 12 , WHERE DISALLO WANCE W A S MAD E IN RESPECT OF FIXED ASSETS FOR WANT OF BILLS. ASSESSEE PRODUCED BILLS FOR PURCHASE OF ASSETS WHICH IS AT PAGE NO. 52 OF THE PAPER BOOK, IN VIEW OF THE SAME , WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CONSIDER THE B ILLS FOR PURCHASE OF ASSET S AN D DECIDE THE ISSUE ACCORDINGLY. 5 ITA NOS. 2883 & 2884/MUM/2018 M/S. TRIUM INFO SOLUTIONS PVT. LTD., 12. THE THIRD ISSUE IN APPEAL FOR THE A .Y. 2010 - 11 IS WITH RESPECT TO ADDITION MADE TOWARDS CASH DEPOSIT. IT IS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT , THIS CASH DEPOSITS WERE MADE FROM OUT OF THE CASH RECEIVED FROM THE PARTIES ON ACCOUNT OF BOUNCING OF CHEQUES. SINCE THE CHEQUES WERE BOUNCED CASH W AS RECEIVED FROM THE PARTIES AND THE SAME WERE DEPOSITED INTO BANK ACCOUNT. THEREFORE, THIS CANNOT BE TREATED AS UNEXPLAINED CASH DEPOSIT. REFERENCE WAS MADE TO THE PAPER BOOK AT PAGE NO . 89 SHOWING THE STATEMENT AND THE LEDGER ACCOUNTS GIVING EXPLANATION FOR MAKING THE CASH DEPOSITS . IN VIEW OF THE SUBMISSIONS OF THE ASSESSEE, WE FIND THAT THIS ISSUE HAS TO BE EXAMINED BY TH E ASSESSING OFFICER AFRESH AND T HEREFORE WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO EXAMINATION AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 13. IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 20 TH FEBRUARY , 2019 SD/ - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 20/ 0 2 / 201 9 GIRIDHAR , S R. PS 6 ITA NOS. 2883 & 2884/MUM/2018 M/S. TRIUM INFO SOLUTIONS PVT. LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM