PRITHVIRAJ J. JAIN, MUMBAI V. ITO 19(2)(5), MUMBAI

ITA 3215/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6823 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Tangible material; Reason to believe
• Section: 133(6); 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 3215 / MUM . /2018 ( ASSESSMENT YEAR : 20 11 12 ) PRITHVIRAJ J. JAIN SHOP NO.9, R.K. WADI BUILDING 2 ND PARSIWADA LANE, MUMBAI 400 004 PAN AFIPJ4139C . APPELLANT V/S INCOME TAX OFFICER WARD 19 ( 2 )( 5 ), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH DATE OF HEARING 28 . 0 2 .201 9 DATE OF ORDER 28.02.2019 O R D E R THE A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING ORDER DATED 16 TH JANUARY 201 8 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 54, MUMBAI, FOR THE ASSESSMENT YEAR 2015 16 . 2 . WHEN TH E APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE IN SPITE OF SERVICE OF HEARING NOTICE WHICH IS EVIDENT FROM THE POSTAL ACKNOWLEDGE KEPT ON RECORD. EVEN, NO 2 PRITHVIRAJ J. JAIN APPLICATION HAS BEEN FILED BY THE ASSESSEE SEEKING ADJOURNMENT OF THE APPEAL. IN VIEW OF THE AFORESAID, I PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 . T HE ONLY ISSUE INVOLVED IN THE APPEAL RELATES TO THE ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4 . BRIEF FACTS, MORE OR LESS COMMON IN ALL THE APPEALS ARE, THE ASSESSEE , AN INDIVIDUAL , CARRIES ON BUSINESS OF TRADING IN FERROUS AND NON FERROUS METALS THROUGH HIS PROPRIETARY CONCERN M/S. MANGAL IMPEX . FOR THE ASSESSMENT YEAR UNDER DISPUTE , THE ASSESSEE FILED HIS RETURN OF INCOME ON 13 SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 2, 81,220 . SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT (INV.), MUMBAI, AND SALES TAX DEPARTMENT, MAHARASHTRA GOVERNMENT, THAT PURCHASES OF ` .1,44,77,724 CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE FROM GAURAV STEEL INDIA IS NON GENUINE, SINCE THE SAID PARTY IS A HAWALA OPERATOR PROVIDING ACCOMMODATION BILLS WITHOUT ACTUAL SALE TRANSACTION. ON THE BASIS OF SUCH INFORM ATION, THE ASSESSING OFFICER HAVING REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT ON ACCOUNT OF SUCH NON GENUINE PURCHASES RE O PENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASE BY 3 PRITHVIRAJ J. JAIN FURNISHING EVIDENCED SUCH BILLS AND VOUCHERS, NAME OF SELLER, PLACE OF DISPATCH O F GOODS MODE OF TRANSPORTATION, DELIVERY CHALLAN, ETC. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF TRANSACTION, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEAL E R CALLING FOR INFORMATION. HOW E VER, THE NOTICE ISSUED BY THE ASSESSING OFFICER RETURNED BACK UN SERVED. AS ALLEGED BY THE ASSESSING OFFICER, EXCEPT FURNISHING THE PURCHASE INVOICES AND BANK STATEMENT, THE ASSESSEE COULD NOT FURNISH ANY OTHER DOCUMENTS INC LUDING TRANSPORT RECEIPTS, DELIVERY CHALLANS, GOODS INWARD REGISTER, ETC. TO PROVE ACTUAL DELIVERY OF GOODS. THEREFORE, THE ASSESSING OFFICER TREATED THE PURCHASES MADE BY THE ASSESSEE NON GENUINE. 5 . HOWEVER, BEING OF THE OPINION THAT THE ASSESSEE HAS ENTER ED INTO SUCH NON GENUINE TRANSACTION TO SUPPRESS ITS TRUE PROFIT AND REDUCE THE TAX LIABILITY , THE ASSESSING OFFICER P ROCEEDED TO ESTIMATE PROFIT @ 12.5 % OF THE NON GENUINE PURCHASES MADE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THOUGH, THE ASSESSEE C HALLENGED THE ADDITION MADE BY THE ASSESSING OFFICER BEFORE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY DIRECTING THE ASSESSING OFFICER TO REDUCE THE GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE. 6 . I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT , ON THE 4 PRITHVIRAJ J. JAIN BASIS OF SPECIFIC INFORMATION AND TANGIBLE MATERIAL IN HIS POSSESSION, THE ASSESSING OFFICER HAD CALLED UP O N THE ASSESSEE TO FURNISH VARIOUS DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF PURCHASES MADE BY HIM I N THE AFORESAID ASSESSMENT YEAR . HOWEVER, EXCEPT FUR N ISHING THE PURCHASE INVOICES AND PAYMENT DETAILS ASSESSEE COULD NOT FURNISH ANY OTHER DOCUMENTARY EVIDENCE TO PROVE TRANS PORTATION AND ACTUAL DELIVERY OF GOODS. FURTHER, THE ASSESSEE FAILED TO PRODUCE EITHER THE SELLING PARTY OR EVEN CONFIRMATION CONFIRMING THE SALE TRANSACTION. IN THESE CIRCUMSTANCES, I DO NOT FIND ANY FAULT WITH THE CONCLUSION DRAWN BY THE DEPARTMENTAL AUT HORITIES THAT THE PURCHASES MADE BY THE ASSESSEE ARE NON GENUINE. AS REGARDS THE ESTIMATION OF PROFIT @ 12.5% , THE ASSESSEE HAS NEITHER APPEARED NOR FURNISHED ANY EVIDENCE TO DEMONSTRATE THAT THE PROFIT RATE ADOPTED OF 12.5% IS EITHER HIGH OR UNREASONABLE. MOREOVER, LEARNED COMMISSIONER (APPEALS) HAS GRANTED FURTHER RELIEF TO THE ASSESSEE BY REDUCING THE GROSS PROFIT ALREADY DECLARED. IN VIEW OF THE AFORESAID, I UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) . 7 . IN THE RESULT, ASSESSEE S APPEAL IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28.02.2019 5 PRITHVIRAJ J. JAIN 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