ITO-29(2)(5), Mumbai V. SHRI. PRASHANT R SHAH, Mumbai

ITA 4076/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0819 (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: 2010-2011
• Appeal Filed On: 06-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Unexplained expenditure; Corroborative evidences; Tax effect
• Section: 69C; 143(1); 139(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 4076 /MUM./201 9 ( ASSESSMENT YEAR : 20 10 11 ) ITA NO.4077/MUM./2019 ( ASSESSMENT YEAR : 20 09 10 ) INCOME TAX OFFICER WARD 29(2)(5), MUMBAI . APPELLANT V/S SHRI PRASHANT R. SHAH B 608, SHISHIT LBS ROAD NEAR SHANGRILA BIS BHANDUP (W), MUMBAI 400 051 PAN AAVPS1748N . RESPONDENT REVENUE BY : S HRI SANJAY J. SETHI ASSESSEE BY : SHRI DEVENDRA JAIN DATE OF HEARING 07 .1 2 .2020 DATE OF ORDER 17.12.2020 O R D E R PER SAKTIJIT DEY. J.M. CAPTIONED APPEALS HAVE BEEN FILED BY THE REVENUE CHALLENGING TWO SEPARATE ORDERS , BOTH DATED 29 TH MARCH 2919, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 40, MUMBAI, FOR ASSESSMENT Y EARS 2009 10 AND 2010 11. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF 2 SHRI PRASHANT R. SHAH ADDITION S MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED NON GENUINE PURCHASES. 3. BRIEF FACTS, WHICH ARE MORE OR LESS COMMON IN BOTH THE ASSESSMENT YEARS ARE, THE ASSESSEE IS AN INDIVIDUAL AND CARRIES ON BUSINESS IN SUPPLYING AND TRADING OF MECHANICAL AND ELECT RICAL GOODS THROUGH HIS PROPRIET ARY CONCERN M/S. SHAH TRADING CO. FOR THE ASSESSMENT YEAR S UNDER CONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME IN TERMS OF SECTION 139(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). INITIALLY, THE RETURN S FIL ED BY THE ASSESSEE WERE PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM DG (INV.), THAT PURCHASES WORTH ` 5,83,584, IN ASSESSMENT YEAR 2010 11 AND ` 23,66,504, IN ASSESSMENT YEAR 2009 10 WERE NON GEN UINE AS THE CONCERNED SELLING DEALERS ARE PROVIDING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT S U NDER SECTION 14 7 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED F OR CERTAIN INFORMATION FROM THE ASSESSEE TO PROVE THE PURCHASES. AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEE DID NOT SUBMIT VAT PAYMENT RECEIPT AND SALES TAX PAYMENT RECEIPT, CONSUMPTION DETAILS OF GOODS PURCHASED, TO LL RECEIPTS, INSURANCE OR GOODS IN TRANSIT, DISPATCH VOUCHERS, ETC. THEREFORE, HE TREATED THE ENTIRE PURCHASE AS NON GENUINE AND ADDED THEM UNDER 3 SHRI PRASHANT R. SHAH SECTION 69C OF THE ACT AS UNEXPLAINED EXPENDITURE. OF COURSE, THE ASSESSING OFFICER HAD ALSO DISALLOWED CERTAIN EXPENDITURE CLAIMED BY THE ASS ESSEE ON AD HOC BASIS. HOWEVER, IN THE PRESENT APPEALS, I AM NOT CONCERNED WITH THAT ISSUE AS IT IS NOT THE SUBJECT MATTER OF APPEALS. BE THAT AS IT MAY, CONTESTING THE ADDITION S MADE ON ACCOUNT OF NON GENUINE PURCHASES, THE ASSESSEE PREFERRED APPEALS BEFO RE LEARNED COMMISSIONER (APPEALS). 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD AND EVIDENCES PRODUCED, LEARNED CIT(A) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER. 5. THE LEARNED DEPARTMENTAL REPRE SENTATIVE RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER SUBMITTED THAT SINCE THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE PURCHASES. 6. RAISING A PRELIMINARY OBJECTION , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEALS FILED BY THE DEPARTMENT ARE NOT MAINTAINABLE DUE TO LOW TAX EFFECT. HE SUBMITTED , IN THE FACTS OF THE PRESENT APPEALS, THE RE OPENING OF ASSESSMENT WAS NOT ON THE BASIS OF ANY INFORMATION RECEIVED FROM E XTERNAL AGENCIES. THEREFORE, THE APPEALS ARE NOT COVERED UNDER ANY OF THE EXCEPTIONS PROVIDED IN CBDT 4 SHRI PRASHANT R. SHAH CIRCULAR. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS: I) ITO V/S AMARCHAND P. SHAH, ITA NO.818 820/MUM./2017, DATED 08.07.2019; AND II) ITO V/S SHRI HABIB KHAN, ITA NO.655/JP./2019, DATED 12.03,2019. 7. WITHOUT PREJUDICE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED , BEFOR E THE FIRST APPELLATE AUTHORITY THE ASSESSEE HAD SUBMITTED ALL SUPPORTING EVIDENCES SUCH AS PARTY WISE LEDGER ACCOUNT OF SUPPLIERS, PURCHASE INVOICE S , CORRESPONDING SALE INVOICES, STATEMENT SHOWING CO RELATION OF PURCHASES WITH CORRESPONDING SALES, BANK STATEMENT SHOWING PAYMENT MADE THROUGH CHEQUE , CERT IFICATE ISSUED BY THE BANK SHOWING PAYMENT MADE TO SELLER/ SUP PLIER, ETC. HE SUBMITTED , THE EVIDENCES PRODUCED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER FOR ENQUIRY AND EXAMINATION. DRAWING OUR ATTENTION TO THE REMAND REPORT FURNISHED BY THE A SSESSING OFFICER HE SUBMITTED , THE ASSESSING OFFICER HAS FOUN D NOTHING WRONG WITH THE EVIDENCES FILED BY THE ASSESSEE, HENCE, HAS NOT MADE ANY ADVERSE COMMENT. THUS, HE SUBMITTED , ONCE THE ASSESSEE HAD PROVED THE GENUINENESS OF PURCHASES, LEARNED COMMISSIONER (APPEALS) HAS RIGHTLY DELETED THE ADDITION S . 5 SHRI PRASHANT R. SHAH 8. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS REGARD S THE PRELIMINARY OBJECTION REGARDING THE MAINTAINABILITY OF THE APPEALS, ON A PERUSAL OF THE ASSESSMENT ORDER S AND OTHER MATERIALS ON RECORD , I DO NOT FIND ANY OBSERVATION BY THE ASSESSING OFFICER TO DEMONSTRATE THAT THE RE OPENING OF ASSESSMENT IS ON THE BASIS OF ANY INFORMATION RECEIVED FROM EXTERNAL AGENCIES. RATHER , THE ASSESSMENT ORDERS CLEARLY REVEAL THAT RELYING UPON THE INFORMATION RECEIVED FROM THE DG (I NV.), MUMBAI, THE ASSESSING OFFICER HAS RE OPENED THE ASSESSMENT. THAT BEING THE CASE, THESE APPEALS ARE NOT PROTECTED UNDER THE EXCEPTIONS PROVIDED AS PER CBDT CIRCULAR NO.17/2019, DATED 8 TH AUGUST 2019. THEREFORE, THE TAX EFFECT ON THE AMOUNT DISPUTED IN THESE APPEALS BEING BELOW THE MONETARY LIMIT OF ` 50 LAKH, THEY ARE NOT MAINTAINABLE AND HAVE TO BE DISMISSED AS WITHDRAWN. 9. EVEN, OTHERWISE ALSO , THE ASSESSEE HAS A STRONG CASE ON MERIT S . THOUGH, THE ASSESSING OFFICER HAS TREATED CERTAIN PURCHASES AS NO N GENUINE , BEFOR E THE FIRST APPELLATE AUTHORITY THE ASSESSEE FURNISHED VARIOUS SUPPORTING EVIDENCES TO PROVE THE GENUINENESS OF SUCH PURCHASES. IT IS A FACT THAT THE EVIDENCES FURNISHED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER FOR ENQUIRY AN D VERIFICATION. ON A PERUSAL OF REMAND REPORT DATED 3 RD MAY 2016, SENT BY THE ASSESSING OFFICER TO LEARNED COMMISSIONER (APPEALS), IT IS VERY MUCH 6 SHRI PRASHANT R. SHAH CLEAR THAT THE ASSESSEE HAD FURNISHED PURCHASE BILLS, SALES INVOICES AND STATEMENTS SHOWING ONE TO ONE CO REL ATION BETWEEN THE PURCHASE AND SALES, DELIVERY CHALLAN S , BANK STATEMENT SHOWING PAYMENT MADE THROUGH ACCOUNT PAYEE CHEQUE AS WELL AS CERTIFICATE ISSUED BY THE BANK CONFIRMING THAT THE PAYMENTS HAVE BEEN RECEIVED BY THE SELLING DEALERS. IT IS WORTH MENTIONI NG , IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT FOUND ANY DISCREPANCY IN THE EVIDENCES FURNISHED BY THE ASSESSEE , HENCE, HAS NOT MADE ANY ADVERSE COMMENTS . RATHER, HE HAS CLEARLY OBSERVED THAT THE EVIDENCES FURNISHED BY THE ASSESSEE HAVE BEEN VERIFI ED AND PLACED ON RECORD. THUS, THE REMAND REPORT CLEARLY INDICATES THAT THE ASSESSING OFFICER WAS SATISFIED WITH THE SUPPORTING EVIDENCES FURNISHED BY THE ASSESSEE. THAT BEING THE CASE, IN MY CONSIDERED OPINION, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION S MADE BY THE ASSESSING OFFICER. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LEARNED COMMISSIONER (APPEALS). ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, APPEALS ARE DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.12.2020 7 SHRI PRASHANT R. SHAH 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