CHALLENGER COMPUTERS, Mumbai V. ITO 19(1)(3), Mumbai

ITA 3749/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7675 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHI
• Keywords: Tangible material; Corroborative evidences
• Section: 201; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE S HRI SAKTIJIT DEY , J UDICIAL M EMBER ITA NO. 3749 /MUM/2019 ASSESSMENT Y EAR: 2009 - 10 ITA NO. 3750/MUM/2019 ASSESSMENT Y EAR: 2010 - 11 CHALLENGER COMPUTERS, 17, GANGA BUILDING, 1 ST FLOO R, OPP - POLICE STATION TOPIWALA LANE, MUMBAI - 400007 PAN: AACFC3477B VS. THE ITO 19(1) (3), MATRU MANDIR, TARDEV, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY SETHI (DR ) DATE O F HEARING: 14/12 /202 0 DATE OF PRONOUNCEMENT: 18 / 01 /202 1 O R D E R PER SAKTIJIT DEY , JM THE AFORESAID APPEALS BY THE SAME ASSESSEE ARIS E OUT OF TWO SEPARATE ORDERS , BOTH DATED 08.02.2019 , OF LEARNED COMMISSIONER OF INCOME TA X (APPEALS) 3, MUMBAI FOR THE ASSESSMENT YEAR S 2009 - 10 AND 2010 - 11. 2. THE ONLY COMMON ISSUE IN BOTH THE SE APPEALS RELATES TO DISALLOWANCE MADE ON ACCOUNT OF NON - GENUINE PURCHASES. OF COURSE, THE ASSESSEE HAS ALSO RAISED GROUND S CHALLENGING THE VALIDI TY OF NOTICE ISSUED U NDER SECTION 148 OF THE ACT. 3. BRIEFLY THE FACT S , WHICH ARE COMMON IN BOTH THE APPEALS ARE , THE ASSESSEE , A PARTNERSHIP FIRM , IS STATED TO BE A DEALER IN COMPUTERS AND ACCESSORIES. F OR THE ASSESSMENT YEAR S UNDER APPEAL. THE ASSESSE E HAD FILED ITS RETURN OF INCOME IN REGULAR COURSE IN TERMS OF SECTION 139 (1) OF THE ACT. THE RETURN S FILED BY THE ASSESSEE W ERE INITIALLY PROCESSED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, THE 2 ITA NO. 3749 & 3750 / MUM/2019 ASSESSMENT YEAR: 2009 - 10 & 201 0 - 1 1 ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES T AX DEPARTM ENT, GOVT. OF MAHARASHTRA THROUGH DGIT (INV.), MUMBAI THAT PURCHASES WORTH RS. 34,46,888/ - IN A SSESSMENT Y EAR 2009 - 10 AND RS. 24,36,495/ - IN A SSESSMENT Y EAR 20 10 - 11 ARE NON GENUINE AS CONCERNED SELLING DEALER S HAVE BEEN IDENTIFIED AS HAWALA OPERATOR S PROVI DING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMATION THE ASSESSING OFFICER REOPENED THE ASSESSMENT S UNDER S ECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHA SES THROUGH SUPPORTING EVIDENCES SUCH AS CURRENT ADDRESS OF THE SELLER S, TRANSPORTATION DETAILS, GOODS DISPATCH/RECEIPT NOTE ETC. THE ASSESSING OFFICER ALSO CALLED UPON THE ASSESSEE TO FURNISH THE QUALITATIVE DETAILS OF PURCHASERS AND SELLERS ALONG WITH ST OCK REGISTER. AS OBSERVED BY ASSESSING OFFICER , THOUGH , THE ASSESSEE FURNISHED FEW DETAILS , IT COULD NOT LINK PURCHASES WITH CORRESPONDING SALES AND BOOKS OF ACCOUNTS WERE ALSO NOT PRO DUCED. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE THROUGH SUBMISSION /ORDER SHEET NOTING DATED 16.02.2018 REQUESTED TO COMPLETE THE ASSESSMENT AFTER MAKING REASONABLE ADDITION. THUS, ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE A ND MATERIAL AVAILABLE ON RECORD, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSM ENT IN BOTH THE ASSESSMENT YEARS BY DISALLOWING 12.5% OUT OF THE ALLEGED NON GENUINE PURCHASES. IN THE PROCESS HE MADE ADDITION OF RS. 4,30,861 IN ASSESSMENT YEAR 2009 - 10 AND RS. 34, 056 / - IN ASSESSMENT YEAR 2010 - 11. THOUGH , THE AFORESAID DISALLOWANC E S WERE CONTES TED BY THE ASSESSEE BEFORE LEARNED COMMISSIONER (APPEALS), H OWEVER, HE SUSTAINED THE ADDITION S . 4. WHEN THE APPEALS WERE CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE DES PITE ISSUANCE OF HEARING NOTICE THROUGH REGISTERED POST. IT IS FURTHER NOTICE D, ON COUPLE OF OCCASIONS WHEN THE APPEALS WERE F IXED FOR HEARING EARLIER NO ONE APPEARED ON BEHALF OF THE ASSESSEE. IN VIEW OF THE AFORESAID , I PROCEED TO DISPOSE OF THE APPEAL S EX PARTE AFTER HEARING THE LEARNED DEPARTMENTAL RE PRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3 ITA NO. 3749 & 3750 / MUM/2019 ASSESSMENT YEAR: 2009 - 10 & 201 0 - 1 1 5. I HAVE CONSI DERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN , THE ASSESSING OFFICER HAD RECEIVED SPECIFIC INFORMATION FROM SALES TAX DEPARTMENT THROUGH INVESTIGATION WING THAT CERTAIN PURCHASES CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE WERE NOT GENUINE. IN COURSE OF ASSESSMENT PROCEEDINGS , WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHAS ES THROUGH CERTAIN D OCUMENTARY EVIDENCES, T HE ASSESSEE WAS UNABLE TO DO SO . IN FACT, THE ASSESSING OFFICER HAS MADE SPEC IFIC OBSERVATION THAT THE ASSESSEE COULD NOT LINK THE PURCHASES WITH CORRESPONDING SALES AND BOOKS OF ACCOUNTS WERE ALSO NOT PRODUCED FO R VERIFICATION. HE HAS ALSO OBSERVED THAT THE ASSESSEE HAD REQUESTED TO COMPLE TE THE ASSESSMENT AFTER MAKING REASONABLE ADDITION S . CONSIDERING THESE FACTS THE ASSESSING OFFICER HAD DISALLOWED 12.5% OF THE ALLEGED NON - GENUINE PURCHASES WHI CH HAS BEEN SUSTAI NED BY THE LEARNED COMMISSIONER (APPEALS). THE FACT THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF PURCHASES BEFORE THE DEPARTMENTAL A UTHORITIES IS VERY MUCH EVIDENT . EVEN , BEFORE THE TRIBUNAL THE ASSESSEE HAD NOT FILE D ANY EVIDENCE TO PROVE THAT PUR CHASES , INDEED , WER E MADE FROM THE DECLARED SOURCE. IN SUCH CIRCUMSTANCES THE DISALLOWANCE MADE BY THE ASSESSING OFFICER @ 12.5% OF THE NON GENUINE PURCHASES IS REASONABLE CONSIDERING THE VIEW EXPRESSED BY THE TRIBUNAL IN SIMILAR NATURE OF CASES. THEREFORE , I AM NOT INCLINED TO INTERF ERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. 6. AS REGARDS, THE VALIDITY OF ISSUANE OF NOTICE U/S 148 OF THE ACT, IT IS VERY MUCH CLEAR , INITIALLY THE RETURN S OF INCOME F ILED BY THE ASSESSEE WERE NOT SUBJECTED TO SCRUTINY BUT WERE ONLY PROCESS ED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER HAD RECEIVED SPECIFIC INFORMATION INDICATING THAT CERTAIN PURCHASES MADE BY THE ASSESSEE ARE NON - GENUINE. THEREFORE, TANGIBLE MATERIAL WAS AVAILABLE W ITH THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT S U/S 147 OF THE ACT. THAT BEING THE CASE , THERE CANNOT BE ANY QUESTION REGARDING ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT. GROUNDS ARE DISMISSED. IN THE RESULT, APPEAL S FILED BY THE ASSESSEE ARE DISM ISSED . 4 ITA NO. 3749 & 3750 / MUM/2019 ASSESSMENT YEAR: 2009 - 10 & 201 0 - 1 1 ORDER PRONOUNCED IN THE OP EN COURT ON 18 TH JANUARY, 2021 . SD/ - ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 18 / 01 /202 1 ALINDRA, PS / 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) , / ITAT, MUMBAI