RUPA JAYESH SHAH, MUMBAI V. PR. CIT - 32 , MUMBAI

ITA 3158/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8701 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LA KSHMI U PRASAD
• Assessee Lawyers: KIRIT S SANGHVI
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI RAM LAL NEGI , JM ITA NO. 3158 /MUM/201 9 ( ASSESSMENT YEAR : 2011 - 12 ) SMT. RUPA JAYESH SHAH BLOCK NO.4, SHYAMKUNJ, 2 ND FLOOR, SVP ROAD, BORIVALI (W) MUMBAI - 400 092 VS. PR. COMMISSIONER OF INCOME TAX - 32, MUMBAI C - 11, 2 ND FLOOR, PRATYAKSHA KAR BHAVAN BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 PAN/GIR NO. ARZPS3269F (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI KIRIT S. SANGHVI REVENUE BY SHRI LA KSHMI U PRASAD DATE OF HEARING 29 / 08 /2019 DATE OF PRONOUNCEMENT 11 / 09 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 3158/MUM/2019 FOR A.Y. 2011 - PREFERRED BY THE ORDER AGAINST THE FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER DATED 05/07/2016 U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, HEREINAFTER REFERRED TO AS ACT , 1961 PURSUANT TO THE DIRECTIONS OF THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX - 32, MUMBAI U/S. 263 OF THE ACT DATED 27/03/2019 FOR THE A. Y.2011 - 1 2 ITA NO. 3158/MUM/2019 SMT. RUPA JAYESH SHAH 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT WAS JUSTIFIED IN INVOKING REVISIONARY JURISDICTION U/S.263 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT THE A SSESSEE HAD FILED HIS RETURN OF INCOME IN THE A.Y . 2011 - 12 ON 17/09/2011 DECLARING TOTAL INCOME OF RS.3,20,870/ - . THE SAID RETURN WAS PROCESSED U/S.143( 1 ) OF THE ACT. LATER THE ASSESSMENT WAS SOUGHT TO BE REOPENED AND RE - ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S. 147 OF THE ACT DATED 05/07/2016 WHEREIN DISALLOWANCE ON ACCOUNT OF NON - GENUINE PURCHASES WERE MADE TO THE TUNE OF RS.4,10,110/ - BEING 25% OF PURCHASES OF RS.16,40,439/ - MADE FROM FOUR PARTIES BY THE ASSESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE LD. CIT(A) AND THE LD. CIT(A) IN APPEAL NO. CIT(A) - 44/ITO 3 2(3)(2)/ITA - 335/2016 - 17 DATED 17/04/2018 DISPOSED OFF THE APPEAL OF THE ASSESSEE BY RESTRICTING THE DISALLOWANCE TO 12.5% OF TOTAL PURCHASES OF RS.16,40,439/ - . IN EFFECT , THE DISALLOWA NCE ON ACCOUNT OF NON - GENUINE PURCHASES WAS REDUCED TO RS.2,05,055/ - BY THE LD. CIT(A). WE FIND THE LD. ADMINISTRATIVE CIT HAD SOUGHT TO INVOKE HIS REVISIONARY JURISDICTION U/S.263 OF THE ACT BY TREATING THE ORDER PASSED BY THE LD. AO AS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE ON THE GROUND THAT THE ENTIRE PURCHASES VALUED AT RS.16,40,439/ - SHOULD HAVE BEEN CONSIDERED FOR DISALLOWANCE BY THE LD. AO. THE LD. CIT IN THIS REGARD PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF NK PROTEINS LTD., REPORTED IN 2017 - TIOL - 23 - SC - IT DATED 16/01/2017. WE FIND THAT THE ENTIRE ISSUE OF DISALLOWANCE ON ACCOUNT OF NON - GENUINE PURCHASES HAS BEEN THE SUBJECT MATTER OF THE ADJUDICATION BY THE LD. AO AND BY THE LD. CIT(A) IN THE INSTA NT CASE BY MAKING S O ME ESTIMATION OF DISALLOWANCE. HENCE THE DOCTRINE OF MERGER WOULD DULY GET APPLIED IN THE INSTANT CASE, MEANING THEREBY THE ORDER OF THE LD AO HAD ALREADY MERGED WITH THAT OF THE ORDER OF THE LD CIT(A). THE PROVISIONS OF ITA NO. 3158/MUM/2019 SMT. RUPA JAYESH SHAH 3 SECTION 263(1) EXPLANATION - 1 CLAUSE - C ARE VERY CLEAR THAT THE ISSUE CANNOT BE THE SUBJECT MATTER OF REVISION U/S.263 WHERE THE SAME HAD BEEN THE SUBJECT MATTER OF THE APPEAL AND THE SAME HAD BEEN HEARD AND DECIDED BY THE LD. CIT(A). HENCE, WE HOLD THAT THE LD. CIT GROSS LY ERRED IN INVOKING REVISIONARY JURISDICTION U/S.263 OF THE ACT IN THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE. WE HOLD THAT IN THE INSTANT CASE, WHAT THE LD CIT HAD EFFECTIVELY SOUGHT TO REVISE IS NOT THE ORDER OF THE LD AO (SUBORDINATE AUTHORITY) AN D INSTEAD HAD ONLY SOUGHT TO REVISE THE ORDER PASSED BY AN EQUAL AUTHORITY I.E LD CIT(A), WHICH IS NOT PERMISSIBLE U/S 263 OF THE ACT. HENCE, WE HAVE NO HESITATION IN QUASHING THE REV ISION ORDER PASSED BY THE LD. C IT U/S.263 OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 / 09 /201 9 SD/ - ( RAM LAL NEGI ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 11 / 09 / 2019 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY // ITA NO. 3158/MUM/2019 SMT. RUPA JAYESH SHAH 4