SHRI KAMLESH P DESAI, MUMBAI V. ITO - 21(2)(1), MUMBAI

ITA 3441/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1233 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO.3441/MUM./2019 ( ASSESSMENT YEAR : 2011 12 ) ITA NO.344 5 /MUM./2019 ( ASSESSMENT YEAR : 20 10 11 ) SHRI KAMLESH P. DESAI 602, KALPANA, BESANT STREET SANTACRUZ (W), MUMBAI 400 054 PAN AABPD6487D . APPELLANT V/S INCOME TAX OFFICER WORD 2 1 ( 2 )( 1 ), MUMBAI . RESPONDENT ITA NO.344 2 /MUM./2019 ( ASSESSMENT YEAR : 2011 12 ) ITA NO.344 4 /MUM./2019 ( ASSESSMENT YEAR : 20 09 10 ) ITA NO.344 6 /MUM./2019 ( ASSESSMENT YEAR : 20 10 11 ) SHRI KAMLESH P. DESAI (HUF) 602, KALPANA, BESANT STREET SANTACRUZ (W), MUMBAI 400 054 PAN AAEHK0558B . APPELLANT V/S INCOME TAX OFFICER WORD 21(2)(1), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : S HRI SANJAY J. SETHI DATE OF HEARING 2 3 .11.2020 DATE OF ORDER 08.12.2020 2 SHRI KAMLESH P. DESAI SHRI KAMLESH P. DESAI (HUF) O R D E R THE AFORESAID APPEAL S HA VE BEEN FILED BY THE ASSESSEE IN INDIVIDUAL AS WELL AS HINDU UNDIVIDED FAMILY (HUF) CAPACITY CHALLENGING TWO SEPARATE ORDER S , BOTH DATE D 5 TH FEBRUARY 2019 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 34 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S 20 09 10, 20 10 11 , 20 11 12, RESPECTIVELY . 2. WHEN THE SE APPEAL S W ERE CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE SE CASE S . THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OFF THE APPEAL S EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. THE ONLY COMMON DISPUTE IN ALL THESE APPEALS RELATE TO DISALLOWANCE MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEF FACTS ARE, BOTH THE SE ASSESSEE S ARE ENGAGED IN THE BUSINESS OF TRADING IN PAPER AND BOARDS . T HE ASSESSEE S FILED RETURNS OF INCOME AS PER THE DETAILS GIVEN BELOW: SL. NO. NAME OF THE ASSESSEE DATE OF FILING OF RETURN OF INCOME AND A.Y. TOTAL INCOME DECLARED 3 SHRI KAMLESH P. DESAI SHRI KAMLESH P. DESAI (HUF) 1. SHRI KAMLESH P. DESAI 29.09.2011 FOR A.Y. 2011 12 ` 1,99,391 2. SHRI KAMLESH P. DESAI (HUF) 27.09.2011 FOR A.Y. 2011 12 ` 1,52,477 3. SHRI KAMLESH P. DESAI (HUF) 29.09.2009 FOR A.Y. 2009 10 ` 2,81,254 4. SHRI KAMLESH P. DESAI 24.01.2011 FOR A.Y. 2010 11 ` 1,45,038 5. SHRI KAMLESH P. DESAI (HUF) 30.09.2011 FOR A.Y. 2010 11 ` 1,43,110 5. THE RETURN S OF INCOME FILED BY THE ASSESSEE S WERE INITIALLY PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THROUGH DGIT (INV.), MUMBAI, IT WAS FOUND THAT CERTAIN PURCHASES CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE S ARE NON GENUINE . T HE REFORE, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE AFORESAID PURCHASES THROUGH SUPPORTING EVIDENC ES. SINCE THE EVIDENCES PRODUCE D BY THE ASSESSEE S WERE NOT TO THE SATISFA CTION OF THE ASSESSING OFFICER, AN D FURTHER, THE NOTICES ISSUED SEEKING INFORMATION FROM THE SELLING DEALERS RETURNED BACK UNSERVED, HE HELD THAT THE PURCHASES ARE NON GENUINE. THEREFORE, RELYING UPON CERTAIN JUDICIAL PRECEDENTS , HE PROCEEDED TO ESTIMATE THE PROFIT ON THE ALLEGED NON GENUI NE PURCHASES BY APPLYING THE RATE OF 4 SHRI KAMLESH P. DESAI SHRI KAMLESH P. DESAI (HUF) 25 %. ACCORDINGLY, HE MADE ADDITION S IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION . LEARNED COMMISSIONER (APPEALS) WHILE DECIDING THE ISSUE, HOWEVER, REDUCED THE ADDITION TO 12.5%. 6. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. ON GOING THROUGH THE ORDERS OF THE DEPARTMENTAL AUTHORITIES, IT IS MANIFEST THAT THERE IS SPECIFIC INFORMATION RECEIVED FROM THE SALES TAX DEPARTME NT TO INDICATE THAT CERTAIN PURCHASES MADE BY THE ASSESSEE S WE RE NON GENUINE AS CONCERNED SELLING DEALERS WERE IDENTIFIED AS HAWALA OPERATOR S BY THE SALES TAX DEPARTMENT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD CALLED UPON THE AS SESSEE TO FURNISH CERTAIN DOCUMENTARY EVIDENCES WHICH COULD NOT BE FURNISHED BY THE ASSESSEE IN ITS ENTIRETY. FURTHER, THE NOTICE S ISSUED UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED SELLING DEALERS RETURNED BACK UNRESERVED. THUS, FROM THE AFORESAID FA CTS, IT IS QUITE CLEAR THAT THE ASSESSEE FAILED TO CONCLUSIVELY PROVE THE FACT THAT THE PURCHASES WERE MADE FROM THE DECLARED SOURCE . HOWEVER, CONSIDERING THE FACT THAT THE ASSESSEE HAS EFFECTED CORRESPONDING SALES, DOUBT WAS ONLY WITH REGARD TO SOURCE OF PURCHASES. FOR THIS REASON ALONE, THE ASSESSING OFFICER H AS ESTIMATED THE PROFIT ELEMENT EMBEDDED IN NON GENUINE PURCHASES @ 25 % WHICH WAS REDUCED TO 12.5% BY LEARNED COMMISSIONER 5 SHRI KAMLESH P. DESAI SHRI KAMLESH P. DESAI (HUF) (APPEALS) . THIS IS SOLELY FOR THE REASON THAT THE ASSESSEE MUST HAVE PURCHA SED TH E GOODS FROM UNVERIFIED SOURCES/ GREY MARKET BY NOT PAYING VAT AND THEREBY SUPPRESSING THE TRUE PROFITS. I DO NOT FIND ANY INFIRMITY IN THE AFORESAID CONCLUSION OF THE DEPARTMENTAL AUTHORITIES. FURTHER , THE DECISION OF LEARNED COMMISSIONER (APPEALS) I N REDUCING THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASES APPEARS TO BE REASONABLE KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN SIMILAR NATURE OF CASES. THEREFORE, I UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE . CONSEQUENTL Y, THE GROUNDS RAISED BY THE ASSESSEE S ARE DISMISSED. 7. IN THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.12.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 08.12.2020 6 SHRI KAMLESH P. DESAI SHRI KAMLESH P. DESAI (HUF) 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 ASSISTANT REGISTRAR ITAT, MUMBAI