ITO WARD 3 (5), KALYAN V. SHRI. RUPESH P SHAH, Thane

ITA 4074/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0818 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: SUBODH R RATNAPARKHI
• Keywords: Unexplained expenditure
• Section: 69C; 143(1); 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 4074 /MUM. /201 9 ( ASSESSMENT YEAR : 20 09 10 ) INCOME TAX OFFICER WARD 3 ( 5 ), KALYAN . APPELLANT V/S SHRI RUPESH P. SHAH B 104, 1 ST FLOOR, PANCHRISHI CHS PATHARI ROAD, GORASWADI, DOMBIVALI (E) THANE 421 201 PAN ACKPS9876N . RESPONDENT REVENUE BY : S HRI SANJAY J. SETHI ASSESSEE BY : SHRI SUBODH R. RATNAPARKHI DATE OF HEARING 0 7 .1 2 .2020 DATE OF ORDER 17.12.2020 O R D E R CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 16 TH MARCH 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 3, NASHIK, FOR THE ASSESSMENT YEAR 2009 10. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS) IN RESPECT OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON GENUINE PURCHASES. 3. BRIEF FACTS ARE, THE ASSESSEE AN INDIVIDUAL IS ENGAGED IN THE BUSINESS OF TRADING IN ELECTRICAL AND HARDWARE GOODS. FOR THE 2 SHRI RUPESH P. SHAH ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 30 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 3,44,147. INITIALLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE AC T. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THROUGH DGIT (INV.), PUNE, THAT PURCHASES WORTH ` 3,33,892, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM FOUR PARTIES ARE NON GENUINE, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH PURCHASES , SINCE , AS PER THE INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, THE SELLING DEALERS HAVE BEEN IDENTIFIED AS HAWALA OPERATOR S PROVIDING ACCOMMODATION BILLS. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCES WHICH WERE NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. THEREFORE, HE TREATED THE PURCHASES OF ` 3,33,892, AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE AFORESAID ADDITION MADE BY THE ASSESSING OFFICER WAS CONTESTED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORI TY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD AND RELYING UPON CERTAIN JUDICIAL PRECEDENTS, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE 3 SHRI RUPESH P. SHAH DISALLOWANCE TO 10% OF THE ALLEGED NON GENUINE PURCHASES. IN O THER WORDS, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO ` 33,389. 5. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THOUGH, IT MAY BE A FACT THAT THE ASSESSING OFFICER WAS IN POSSESSION OF INFORMATION REVEALING THAT CERTAIN PURCHASES MADE BY THE ASSESSEE ARE NON GENUINE AND FURTHER , THE ASSESSEE WAS UNABLE TO CONCLUSIVELY PROVE THE PURCH ASES WITH SUPP ORTING EVIDENCES, HOWEVER, FACT REMAIN S, THE SALES TURNOVER DISCLOSED BY THE ASSESSEE HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER. THEREFORE, THE DOUBT IF ANY IS WITH REGARD TO THE SOURCE OF PURCHASE. IT MAY BE A FACT THAT THE ASSESSEE MIGH T HAVE PURCHASED THE GOODS FROM GREY MARKET WITHOUT PAYING VAT , THEREBY , SUPPRESSING A PART OF ITS PROFIT. CONSIDERING THE AFORESAID FACTUAL POSITION, LEARNED COMMISSIONER (APPEALS) HAS DECIDED TO BRING THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASE TO TAX B Y ESTIMATING AT 10%. SINCE THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS) IS IN CONFORMITY WITH THE RATIO LAID DOWN IN VARIOUS JUDICIAL PRECEDENT S , I AM INCLINED TO UPHOLD THE SAME. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4 SHRI RUPESH P. SHAH 6. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.12.2020 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