ITO-22(3)(2), Mumbai V. SANTOSH RAMESH SHAH, Mumbai

ITA 4097/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0820 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 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: 07-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: VISHESH SRIVASTAVA
• Keywords: Corroborative evidences
• 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. 4097 /MUM. /201 9 ( ASSESSMENT YEAR : 20 10 12 ) ITA NO. 4098 /MUM. /2019 ( ASSESSMENT YEAR : 20 11 12 ) INCOME TAX OFFICER WARD 22(3)(2), MUMBAI . APPELLANT V/S SHRI SANTOSH RAMESH SHAH 13/88, AMBA BHAN ROAD NO.8 PRABHAT COLONY, SANTACRUZ (E) MUMBAI 400 055 PAN BAQPS8905M . RESPONDENT REVENUE BY : S HRI SANJAY J. SETHI ASSESSEE BY : SHRI VISHESH SRIVASTAVA DATE OF HEARING 07 .1 2 .2020 DATE OF ORDER 17.12.2020 O R D E R CAPTIONED APPEAL S HA VE BEEN FILED BY THE REVENUE CHALLENGING A COMMON ORDER DATED 9 TH MARCH 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 34 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S (IN SHORT A.Y.) 2010 11 AND 2011 12. 2. THE COMMON DISPUTE IN THE PRESENT APPEAL S IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION S MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON GENUINE PURC HASES. 2 SHRI SANTOSH RAMESH SHAH 3. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSIN ESS OF TRADING IN ALUMINUM INGOTS AND CASTINGS. FOR THE ASSESSMENT YEAR S UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN S OF INCOME AS PER THE DETAILS GIVEN BELOW: DATE OF FILING OF RETURN OF INCOME TOTAL AMOUNT DECLARED IN THE RETURN OF INCOME A.Y. 2010 11 29.09.2010 ` 3,90,580 A.Y. 2011 12 30.09.2011 ` 6,23,530 4. THE RETURN S FILED BY THE ASSESSEE WERE INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH DGIT (INV.), MUMBAI, THAT PURCHASES WORTH ` 3, 37,889 IN ASSESSMENT YEAR 2010 11 AND ` 5,75,623, IN ASSESSMENT YEAR 2011 12 ARE NON GENUINE , AS THE CONCERNED PARTIES WERE IDENTIFIED AS HAWALA OPERATOR S , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT S UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALL ED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH PURCHASES THROUGH SUPPORTING EVIDENCE. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES . HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, NO REPLY WAS 3 SHRI SANTOSH RAMESH SHAH RECEIVED FROM THE PARTY CONCERN ED IN RESPONSE TO SUCH NOTICE S . NOT BEING SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT THE PURCHASES ARE NON GENUINE. HOWEVER, THE ASSESSING OFFICER ULTIMATELY DISALLOWED 25% OUT OF SUCH PURCHASES WORKING OUT TO ` 3,37,889 IN A.Y. 20010 11 AND ` 5,75,623 IN A.Y. 2011 12 AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITI ON S BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF THE FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 1 2 . 5 % OF THE ALLEGED NON GENUINE P URCHASES. 6. I HAVE HEARD THE LEARNED COUNSELS FOR THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT , THE DOUBT REGARDING THE GENU INENESS OF THE DISPUTED PURCHAS ES WAS ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARAS HTRA. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THE FACT THA T THE ASSESSEE HAS PRODUCED SOME SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES. THE ONLY REASON FOR WHICH HE DID NOT ACCEPT THE PURCHASES TO BE GENUINE IS , THE ASSESSEE NEITHER COULD PRODUCE THE CONCERNED PARTIES NOR COULD FURNISH TRANSPORTATION BILLS, WEIGHMENT BILLS, ETC. 4 SHRI SANTOSH RAMESH SHAH HOWEVER, THE VERY FACT THAT THE ASSESSING OFFICER DID NOT DISALLOW THE ENTIRE PURCHASE S BUT HAS RESTRICTED THE DISALLOWANCE TO 25% OF THE ALLEGED NON GENUINE PURCH ASES INDICATES THAT THE ASSESSING OFFICER ALSO BELIEVES THAT THE ASSESSEE HAD PURCHASED THE GOODS , THOUGH , MAY NOT BE FROM THE DECLARED SOURCE. THEREFORE, HE HAS PROCEEDED TO ADD THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. HOWEVER, THE ESTIMATION OF PRO FIT @ 25% IN MY VIEW IS ON A MUCH HIGHER SIDE. THEREFORE, I FULLY AGREE WITH L EARNED COMMISSIONER (APPEALS) IN RESTRICT ING THE DISALLOWANCE TO 1 2 . 5 % OF THE NON GENUINE PURCHASES. ACCORDINGLY, THE ORDER OF LEARNED COMMISSIONER (APPEALS) FOR THE ASSESSME NT YEARS UNDER CONSIDERATION IS UPHELD BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL S ARE DISMISSED. ORDER PRONOUNCED THROUGH NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, ON 17.12.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.12.2020 5 SHRI SANTOSH RAMESH 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