VIJENDRA S. ANJURE, MUMBAI V. ITO 22(2)(2), MUMBAI

ITA 2979/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1733 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.2979/MUM/2016 (ASSESSMENT YEAR 2010-11) MR. VIJENDRA ANJURE, SHANKAR DEVOL, LAXMINAGAR SOCIETY, OPP. BPCL, NORTHGATE, CHEMBUR, MUMBAI 400074 PAN: ABMPA2088H ...... APPELLA NT VS. THE INCOME TAX OFFICER 22(2)(2), MUMBAI .... R ESPONDENT APPELLANT BY : SHRI KULDIP MEHTA RESPONDENT BY : MS. BEENA DATE OF HEARING : 06/12/2016 DATE OF PRONOUNCEMENT : 09/12/2016 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-25, MUMBAI DATED 16/01/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) DATED 28/03/2013. 2. IN THIS APPEAL, ALTHOUGH THE ASSESSEE HAS RAISE D MULTIPLE GROUNDS OF APPEAL, BUT THE ONLY POINT SUBSTANTIVELY ARGUED AT THE TIME OF HEARING IS AGAINST THE ACTION OF THE CIT(A) IN HOLDING THAT PROFIT ELE MENT IN RELATION TO UNPROVED PURCHASES OF RS.2,28,00,000/- BE BROUGHT TO TAX @10 % AS AGAINST ADDITION 2 ITA NO.2979/MUM/2016 (ASSESSMENT YEAR 2010-11) MADE BY THE ASSESSING OFFICER OF RS.37,80,155/- BAS ED ON THE PEAK CREDIT BALANCE. 3. AT THE TIME OF HEARING, LD. REPRESENTATIVE FOR T HE ASSESSEE POINTED OUT THAT THE CIT(A) HAD MADE ESTIMATE OF PROFIT @ 10%, WHICH IS OVER AND ABOVE THE DECLARED PROFIT, AND THE SAME WAS QUITE EXCESSI VE CONSIDERING THAT THE ASSESSEE HAS DECLARED NET PROFIT OF 6.5%. THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE APPELLANT ASSESSEE IS A PROPRIETOR OF M/S.SHRINATHJI ENTERPRISES, WHICH IS ENGAGED IN THE BUSINESS OF TRADING AND PROCESSING OF BITUMEN AND M/S. SHRINATHJI ROADLINE S, WHICH IS ENGAGED IN THE BUSINESS OF TRANSPORTATION. IT HAS ALSO BEEN POIN TED OUT THAT THE RELEVANT PURCHASES, WHICH ARE IN DISPUTE ARE ON ACCOUNT OF P URCHASE OF LIGHT DIESEL OIL(LOD) FROM M/S.RUMEET ENTERPRISES. THE LD. REPR ESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THOUGH THE PURCHASES HAVE BEEN TAKEN AT THE FIGURE OF RS.2,28,00,000/-, BUT THE SAME INCLUDES TAX ELEM ENT ALSO, WHEREAS THE ACTUAL PURCHASE IS ONLY OF RS.1,93,75,528/-, AS CAN BE SEEN FROM THE ASSESSMENT ORDER AS WELL AS FROM THE COPY OF THE P& L ACCOUNT OF M/S. SHRINATHJI ENTERPRISES, PLACED AT PAGES 1 & 2 OF TH E PAPER BOOK. REFERENCE HAS ALSO BEEN MADE TO PAGE -11 OF THE PAPER BOOK, WHERE IN IS PLACED THE DETAILS OF PURCHASES. IT WAS THEREFORE, CONTENDED THAT BOTH T HE RATE OF PROFIT ELEMENT AS WELL AS PURCHASES HAVE BEEN TAKEN AT EXCESSIVE FIGU RES. 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS CONTENDED THAT THE ADDITION IS BASED ON AN ADHOC ESTIMATION OF PR OFIT AND THAT IN VIEW OF THE PURCHASES HAVING BEEN FOUND UNPROVED, CERTAIN PROFI T PERCENTAGE OVER AND ABOVE THAT DECLARED BY THE ASSESSEE SHOULD BE ASSES SED AS INCOME ON THIS COUNT. 3 ITA NO.2979/MUM/2016 (ASSESSMENT YEAR 2010-11) 5. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN MY CONSIDERED OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ESTIMATION OF PROFIT MADE BY THE CIT(A) IS REDUCED BY 50% AND THE ASSESSING OFFI CER IS FURTHER DIRECTED TO APPLY THE REDUCED RATE ON THE PURCHASES OF RS.1,93 ,75,528/-, AS EXPLAINED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER I S DIRECTED TO REWORK THE ADDITION ON ACCOUNT OF UNPROVED PURCHASES OF M/S. S HRINATHJI ENTERPRISES. AT THIS STAGE, IT IS TO BE PUT ON RECORD THAT AT THE T IME OF HEARING NOTHING HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT THE REVENUE HAS P REFERRED ANY APPEAL AGAINST THE PARTIAL RELIEF ALLOWED BY THE CIT(A). BE THAT AS IT MAY, THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE ADDITION AS AB OVE AND ALLOW THE CONSEQUENTIAL RELIEF TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 09/12/2016 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 09/12/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI