SANJAY A SHAH, MUMBAI V. ITO 33(3)(3), MUMBAI

ITA 3099/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7248 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWA
• Assessee Lawyers: SAGAR P BADANI
• Keywords: Accommodation entries
• Section: 143(3); 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 3099 / MUM . /2017 ( ASSESSMENT YEAR : 20 0 9 10 ) SANJAY A. SHAH B 801, GOKUL APARTMENT OPP. DEV NAGAR NEW SAI BABA NAGAR KANDIVALI (W), MUMBAI 400 067 PAN AAZPS8709F . APPELLANT V/S INCOME TAX OFFICER WARD 33(3)(3), MUMBAI . RESPONDENT ASSESSEE BY : SHRI SAGAR P. BADANI REVENUE BY : SHRI SWAPAN KUMAR BEPARI DATE OF HEARING 25.09.2018 DATE OF ORDER 2 8 .09.2018 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 6 TH MAY 2015 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 45 , MUMBAI, FOR THE ASSESSMENT YEAR 20 09 10 . 2 . T HE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE ADDITION OF ` 10,60,437, MADE ON ACCOUNT OF NON GENUINE PURCHASE. 3 . BRIEF FACTS ARE, THE ASSESSEE AN INDIVIDUAL IS ENGAGED IN TRADING OF TAILORING MATERIAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE 2 SANJAY A. SHAH ASSE SSEE FILED HIS RETURN OF INCOME ON 17 TH AUGUST 2009, DECLARING TOTAL INCOME OF ` 3,67,430. ASSESSMENT IN CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ), VIDE ORDER DATED 17 TH NOVEMBER 2011. SUBSEQU ENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM DGIT (INV.), MUMBAI, AS WELL AS SALES TAX DEPART MENT, GOVERNMENT OF MAHARASHTRA THAT PURCHASES OF ` 1,18,30,514, MADE FROM 30 ENTITIES ARE NOT GENUINE AS THEY ARE IDENTIFIED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT AND ARE ONLY PROVIDING ACCOMMODATION ENTRIES , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, TO ASCERTAIN THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER ISSUED NOTICES UND ER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES CALLING FOR CERTAIN INFORMATION. AS OBSERVED BY THE ASSESSING OFFICER, NONE OF THE NOTICES WERE COMPLIED WITH DUE TO THE REASONS MENTIONED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER CALL ED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES BY PRODUCING STOCK REGISTER, LORRY RECEIPT WITH DELIVERY CHALLAN, ETC. FURTHER, THE ASSESSING OFFICER ALSO DIRECTED THE ASSESSEE TO PRODUCE THE CONCERNED SELLING PARTIES BEFORE HIM. AS ALLEGED BY T HE ASSESSING OFFICER, THE ASSESSEE NEITHER PRODUCED THE DOCUMENTS CALLED FOR NOR PRODUCED THE PARTIES BEFORE HIM. ACCORDINGLY, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND PROCEEDED TO HOLD THE PURCHASES MADE TO BE NON GENUINE. H OWEVER, INSTEAD OF 3 SANJAY A. SHAH DISALLOWING THE ENTIRE NON GENUINE PURCHASES, THE ASSESSING OFFICER RESTRICTED THE ADDITION BY ESTIMATING THE GROSS PROFIT @ 14.75% OF THE NON GENUINE PURCHASES. THIS RESULTED IN ADDITION OF ` 10,60,437. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS). HOWEVER, HE ALSO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 4 . THE ONLY SUBMISSIONS MADE BEFORE ME BY THE LEARNED AUTHORISED REPRESE NTATIVE IS , ESTIMATION OF PROFIT OF 14.75% IS ON THE HIGHER SIDE, HENCE, SHOULD BE REDUCED TO 12.5%. WHEREAS, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS). 5 . I HAVE CONSIDERED RIVAL SUBMISSIONS A ND PERUSED MATERIALS ON RECORD. ON EXAMINING THE FACTS AND MATERIAL ON RECORD, I AM OF THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF DISPUTED PURCHASES. IN FACT, BEFORE ME, THE ASSESSEE HAS ONLY DISPUTED THE ESTIMATION OF PROFIT @ 14.75 %. AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE, I AM OF THE VIEW THAT ESTIMATION OF PROFIT @ 12.5% OF THE NON GENUINE PURCHASES WOULD BE REASONABLE. ACCORDINGLY, I DIRECT TH E ASSESSING OFFICER TO RESTRICT THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. GROUNDS RAISED ARE PARTLY ALLOWED. 4 SANJAY A. SHAH 6 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.09.2018 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28.09.2018 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 (SR. PRIVATE SECRETARY) ITAT, MUMBAI