ANIL LALLUBHAI PATEL, MUMBAI V. ITO 24(1)(2), MUMBAI

ITA 3774/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4313 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HITESH M SHAH
• Keywords: Unexplained expenditure
• Section: 69C; 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SM C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 3774 / MUM . /2018 ( ASSESSMENT YEAR : 20 09 10 ) ANIL LALLUBHAI PATEL 501, 5 TH FLOOR, PARSHAVA DARSHAN, 10, LAJPATRAI ROAD VILE PARLE (W), MUMBAI 400 056 PAN AABPP1944K . APPELLANT V/S INCOME TAX OFFICER WARD 24(1)( 2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI HITESH M. SHAH REVENUE BY : SHRI VIVEK ANAND OJHA DATE OF HEARING 07 .0 3 .201 9 DATE OF ORDER 13.03.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 28 TH MARCH 2018 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 36 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2009 10 . 2 . THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE ADDITION OF ` 4,29,486, UNDER SECTION 69C OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 2 ANIL LALLUBHAI PATEL 3 . BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. THOUGH, THE ASSESSING OFFICER IN THE ASSESSMENT ORDE R HAS WRONGLY MENTIONED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN IMITATION JEWELER, H OWE VER, AS PER THE FACTS ON RECORD THE ASSESSEE IS CARRYING ON BUSINESS AS A CIVIL CUM LABOUR CONTRACTOR THROUGH HIS PROPRIETOR Y CONCERN M/S. RADIANT CONSTRUCTION CO. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 18 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 7,18,360. INITIALLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SE CTION 143(1) OF THE ACT. S UBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, MAHARASHTRA GOVERNMENT, THAT PURCHASES WORTH ` 4,29,486, CLAIMED TO HAVE BEEN MADE FROM M/S. AMAR TRADING CORPORATION, I S NON GENUINE, 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 PURCHASES MADE FROM M/S. AMAR TRADING CORPORATIO N. AS ALLEGED BY THE ASSESSING OFFICER, THE ASSESSEE FAILED TO FURNISH ANY CREDIBLE EVIDENCE TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSESSING OFFICER ALSO OBSERVED THAT SINCE THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALER C ALLING FOR NECESSARY INFORMATION RETURNED BACK UN SERVED, THE GENUINENESS OF PURCHASES REMAINED UNVERIFIED. IN VIEW OF THE AFORESAID, THE ASSESSING OFFICER TREATED THE PURCHASE OF ` 3 ANIL LALLUBHAI PATEL 4,29,486, AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT AND ADDE D BACK TO THE INCOME OF THE ASSESSEE. 4 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 5 . THE LEARNED AUTHORISED REPRE SENTATIVE SUBMITTED , THE ASSESSEE HAS ENTERED INTO GENUINENESS PURCHASE TRANSACTIONS WITH THE CONCERNED PARTIES AND HAS REFLECTED SUCH TRANSACTIONS IN ITS BOOKS OF ACCOUNT WHICH ARE AUDITED AS PER THE PROVISIONS OF THE ACT. HE SUBMITTED , THE ASSESSEE IS A CIVIL AND LABOUR CONTRACTOR AND THE ALLEGED NON GENUINE PURCHASES REPRESENT PURCHASE OF SAND AND METALS UTILIZED IN CONSTRUCTION WORK WHICH WERE DELIVERED AT THE CONSTRUCTION SITE. THEREFORE, HE SUBMITTED , THE PURCHASES MADE CANNOT BE TREATED AS NON GENUIN E. HOWEVER, ULTIMATELY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SINCE THE SALES TURNOVER / RECEIPTS OF THE ASSESSEE HAVE NOT BEEN DISPUTED, THE ADDITION SHOULD BE REDUCED TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 6 . THE LEARNED DEPARTMENTAL REP RESENTATIVE STRONGLY RELIED UPON THE OBSERVATIONS OF THE A .O. AND THE LEARNED CIT(A). 7 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD , NEITHER BEFORE THE 4 ANIL LALLUBHAI PATEL ASSESSING OFFICER NOR BEFORE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS PRODUCED ANY CREDIBLE EVIDENCE TO CONCLUSIVELY PROVE THAT THE PURCHASES MADE WERE FROM THE DECLARED SOURCE. THEREFORE, ASSESSEES CLAIM OF PURCHASES BEING GENUINE CANNOT BE ACCEPTED ON MERE FACE VALUE. HOWEVER, IT I S A FACT ON RECORD THAT THE ASSESSING OFFICER HAS ACCEPTED THE RECEIPTS / TURNOVER DECLARED BY THE ASSESSEE . MOREOVER, THE PURCHASES MADE BEING SAND AND METAL, IT IS QUITE POSSIBLE THAT THE ASSESSEE MIGHT HAVE PURCHASED THOSE MATERIALS FROM SOME SOURCE OTH ER THAN THE DECLARED SOURCE AND UTILIZED THEM IN HIS WORK. THAT BEING THE CASE , ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR ADDITION. KEEPING IN VIEW THE PARTICULAR FACTS OF THE PRESENT CASE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION SHOULD BE RESTRICTED TO 12.5% OF THE NON GENUINE PURCHASES. THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE AFORESAID DIRECTION. GROUND NO.1 IS DISMISSED AND GROUND NO.2 IS ALLOWED. 8 . IN THE RESUL T, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.03.2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2019 5 ANIL LALLUBHAI PATEL 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