ASHOK MEHTA HUF, MUMBAI V. ITO 22(1)(2), MUMBAI

ITA 3040/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9294 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: R C JAIN
• Section: 69C; 148

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 3040 /MUM/ 2017 (ASSESSMENT YEAR 20 1 1 - 1 2 ) SHRI ASHOK MEHTA ( HUF ) 41, GAUTAM APARTMENT JUHU ROAD, SANTACRUZ W MUMBAI - 400 054. PAN :AAIHA3361C VS. ITO 22(1) (2) ROOM NO. 313 PIRAMAL CHAMBERS MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI R.C. JAIN DEPARTMENT BY SHRI RAM TIWARI DATE OF HEARING 20 .9. 201 7 DATE OF PRONOUNCEMENT 20 . 9 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER DATED 21 - 02 - 2017 PASSED BY LD CIT(A) - 34, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2011 - 12. 2. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN CHEMICALS AND SOLVENT S. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT CERTAIN PARTIES ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIALS AND UPON NOTICING THAT THE ASSESSEE HAS PURCHASED GOODS FROM SOME OF SUCH PARTIES IN THE YEAR UNDER CONSIDERATION, THE AO REOPENED THE ASSESSMENT OF THIS YEAR BY ISSUING NOTICE U/S 148 OF THE ACT. SINCE, THE ASSESSEE COULD CORRELATE THE PURCHASES WITH SALES, THE ASSESSING OFFICER ADDED 12.50% OF THE VALUE OF PURCHA SES MADE FROM THE SUSPICIOUS DEALERS AS PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. THE LD CIT(A) ALSO CONFIRMED THE SAME AND STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. SHRI ASHOK MEHTA (HUF) 2 3. THE LD A.R SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION U/S69C OF THE ACT, WHICH IS NOT LEGALLY CORRECT AS THE ASSESSEE HAS DULY ACCOUNTED FOR THE IMPUGNED PURCHASES. HE SUBMITTED THAT THE GOODS PURCHASED FROM THESE PARTIES HAVE BEEN SOLD, MEANING THEREBY, THE PURCHASES CANNOT BE IN DOUBT. HE SUBMITT ED THAT THE DIVISION BENCH OF ITAT, UNDER IDENTICAL SET OF FACTS, HAS SUSTAINED AN ADDITION OF 2% OF THE VALUE OF PURCHASES ONLY. 4. ON THE CONTRARY, THE LD D.R PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF N.K.PRO TEINS (CIVIL APPEAL NO.769/2017) AND SUBMITTED THAT THE ENTIRE AMOUNT OF PURCHASES COULD BE DISALLOWED, BUT THE AO HAS DISALLOWED ONLY 12.50%. 5. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. IN MY VIEW THE DECISION RENDERED IN THE CASE OF N .K.PROTEINS (SUPRA) BY HONBLE SUPREME COURT IS NOT APPLICABLE, SINCE THE SAID DECISION WAS RENDERED ON THE BASIS OF FACTS AVAILABLE IN THAT CASE. I HAVE GONE THROUGH THE FACTS AVAILABLE IN THE CASE OF N.K.PROTEINS LTD (SUPRA) AND NOTICE THAT, IN THAT CASE , THE REVENUE CONDUCTED SEARCH IN THE HANDS OF THAT ASSESSEE AND FOUND THE BLANK SIGNED CHEQUE BOOKS AND VOUCHERS OF NUMBER OF CONCERNS AT ITS PREMISES. THIS FACT, IN MY VIEW, SHOWS THAT THE ASSESSEE BEFORE THE HONBLE SUPREME COURT WAS OPERATING ALL THE ACCOUNTS OF THE CONCERNS, WHICH FACTOR ESTABLISHED BOGUS NATURE OF THE PURCHASES. IN ANY CASE, THE ISSUE AGITATED BEFORE ME WOULD DEPEND UPON THE FACTS PREVAILING IN EACH CASE AND HENCE THE ASSESSEE ALSO, IN MY VIEW, CANNOT TAKE SUPPORT OF THE DECISION R ENDERED IN OTHER CASES. I ALSO NOTICE THAT THE AO HAS NOT MADE ADDITION U/S 69C OF THE ACT AND HENCE I REJECT THE CONTENTIONS OF THE LD A.R URGED IN THAT CONNECTION. 6. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAS MAINTAINED STO CK REGISTER AND HAS PROVED THAT THE PURCHASED GOODS HAVE BEEN SOLD. HENCE SHRI ASHOK MEHTA (HUF) 3 THE AO HAS ESTIMATED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. IN MY VIEW, MERE SUBMISSION OF PURCHASE BILLS AND PAYMENT DETAILS WOULD NOT BE SUFFICIENT, PARTICULARLY WHEN THE SUPPLIERS HAVE BEEN DECLARED AS HAWALA DEALERS. I NOTICE THAT THE ASSESSEE HAS NOT OBTAINED ANY CONFIRMATION LETTER FROM THE SUPPLIERS NOR HE COULD PRODUCE THEM BEFORE THE AO. HENCE, IN MY VIEW, IT CANNOT BE SAID THAT THE ASSESSEE HAS PROVED THE PURCHASE S BEYOND DOUBT. UNDER THESE SET OF FACTS, THE AO WAS JUSTIFIED IN ESTIMATING THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES, WHICH HE HAS ESTIMATED AT 12.50% AND THE SAME HAS BEEN CONFIRMED BY LD CIT(A). IN THE ABSENCE OF ANY OTHER MATERIAL, I DO NOT FIND ANY REASON TO INTERFERE WITH THE VIEW TAKEN BY LD CIT(A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 20 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOU NTANT MEMBER MUMBAI ; DATED : 20 / 9 / 20 1 7 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) PS ITAT, MUMBAI