ITO-33(1)(3), MUMBAI V. M/S GLOBUZ INC, MUMBAI

ITA 4149/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6220 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Corroborative evidences
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMCBENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.4149/MUM./2019 (ASSESSMENT YEAR : 201011 ) INCOME TAX OFFICER WARD33(1)(3), MUMBAI . APPELLANT V/S M/S. GLOBUZ INC. UNIT NO.5, ISLAM COMPOUND DAHANUKARWADI, KANDIVALI (WEST) MUMBAI 400 067 PAN AAIFG1551C . RESPONDENT REVENUE BY : SHRI SANJAY J. SETHI ASSESSEE BY : NONE DATE OF HEARING 08.12.2020 DATE OF ORDER 28/01/2021 O R D E R THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 28 TH MARCH 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)45, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 201011. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NONGENUINE PURCHASES. 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION 2 M/S. GLOBUZ INC. SEEKING ADJOURNMENT EITHER. CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OFF THE APPEAL EXPARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. BRIEF FACTS ARE, THE ASSESSEE, A PARTNERSHIP FIRM, IS ENGAGED IN MANUFACTURING OF ADVERTISING MATERIAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 15 TH OCTOBER 2010, DECLARING TOTAL INCOME OF ` 71,070. THE RETURN OF INCOME SO FILED WAS 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 ` 10,53,972, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM SEVEN PARTIES ARE NONGENUINE, AS, THE CONCERNED PARTIES WERE IDENTIFIED AS HAWALA OPERATORS, THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER CALLED 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 NOTICES UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, NO REPLY WAS RECEIVED FROM THE CONCERNED PARTIES IN RESPONSE TO SUCH 3 M/S. GLOBUZ INC. NOTICES. NOT BEING SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT THE PURCHASES ARE NONGENUINE. PROCEEDING FURTHER, THE ASSESSING OFFICER DISALLOWED THE ENTIRE PURCHASE MADE IN CASH AMOUNTING TO ` 2,73,351, AND DISALLOWED 30.61% FROM THE BALANCE PURCHASES ALLEGED TO BE NON GENUINE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITIONS 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 12.5% OF THE ALLEGED NONGENUINE PURCHASES. 6. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT, THE DOUBT REGARDING THE GENUINENESS OF THE DISPUTED PURCHASES WAS ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT 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. HOWEVER, THE VERY FACT THAT THE ASSESSING OFFICER DID NOT DISALLOW THE 4 M/S. GLOBUZ INC. ENTIRE PURCHASE BUT HAS RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT ON THE ALLEGED NONGENUINE PURCHASES INDICATES THAT THE ASSESSING OFFICER ALSO BELIEVES THAT THE ASSESSEE HAD PURCHASED THE GOODS, THOUGH, MAY NOT BE FROM THE DECLARED SOURCE. IN THESE CIRCUMSTANCES, RESTRICTION OF DISALLOWANCE TO 12.5% IS FAIR AND REASONABLE. CONSEQUENTLY, I FULLY AGREE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS). GROUNDS RAISED ARE DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED ON 28/01/2021 SD/- SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28/01/2021 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