SHRI CHUNILAL R. SHAH, MUMBAI V. ITO-19(1)(3), MUMBAI

ITA 4185/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4845 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: POOJA M CHHAWACHHARIA
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4185/MUM/2018 ASSESSMENT YEAR: 2009 - 10 SHRI CHUNILAL R. SHAH, M/S B.R. METAL SYNDICATE 403, 4 TH FLOOR, RIDDHI APT. KHETWADI BACK ROAD, MUMBAI - 400004. VS. ITO 19(1)(3) , MUMBAI . PAN NO. ASEPS8192H APPELLANT RESPONDENT ASSESSEE BY : MS. POOJA M. CHHAWACHHARIA, AR REVENUE BY : MR. CHAITANYA ANJARIA , DR DATE OF HEARING : 07 /05/2019 DATE OF PRONOUNCEMENT: 13/05/2019 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 30 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT 1961, (THE ACT). 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2009 - 10 ON 28.08.2009 DECLARING TOTAL INCOME OF RS.2,49,730/ - . THE RETURN WAS PROCESSED U/S 14 3 (1), ACCEPTING THE RETURNED INCOME. THEREAFTER, THE ASSESSING OFFICER (AO) SHRI CHUNILAL R. SHAH ITA NO. 4185/MUM/2018 2 RECEIVED INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX (INV), MUMBAI THAT AS PER THE LIST GIVEN BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE APPELLANT HAS MADE PURCHASES OF RS.1,15, 06,586/ - FROM 9 PARTIES, WHO HAVE ISSUED FALSE BILLS WITHOUT DELIVERY OF GOODS. ON THE BASIS OF THE ABOVE INFORMATION, THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 ON 08.03.2014. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO FILE (I) NAME OF THE SELLER WITH CURRENT FULL ADDRESS, (II) PAN, (III) BILL AND VOUCHER NUMBER WITH DATE, (IV) DESCRIPTION OF GOODS PURCHASED, (V) QUANTITY, (VI) RATE, (VII) AMOUNT, (VIII) GOODS DESPATCHED FROM (NAME OF THE PLACE) WITH DATE AND (IX) MODE OF TRANSPORTATION, IF BY ROAD VEHICLE NUMBER AND ALSO PAYMENTS. SIMILAR LY, THE AO ASKED THE ASSESSEE TO FILE DETAILS OF CORRESPONDING SALES OF GOODS AND LINK THE PURCHASES WITH SALES SUPPORTED BY BILLS AND VOUCHERS AND AS REFLECTED IN THE STOCK REGISTER. THE AO OBSERVED THAT THOUGH THE ASSESSEE COULD FURNISH FEW DETAILS, BUT HE COULD NOT LINK THE PURCHASES WITH CORRESPONDING SALES. ALSO THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS FOR VERIFICATION BEFORE THE AO. HOWEVER, THE ASSESSEE VIDE WRITTEN SUBMISSION DATED 02.02.2015 REQUESTED THE ASSESSEE TO COMPLETE THE ASSESS MENT AFTER MAKING A REASONABLE ADDITION. THE AO ESTIMATED THE PROFIT @ 12.5% OF THE DISPUTED AMOUNT OF PURCHASES OF RS.1,15,06,586/ - AND IT COMES TO RS.14,38,324/ - AND MADE AN ADDITION OF IT. SHRI CHUNILAL R. SHAH ITA NO. 4185/MUM/2018 3 3 . IN APPEAL, THE LD. CIT(A) AGREED WITH THE REASONS GIVEN BY THE AO AND CONFIRMED THE ADDITION OF RS.14,38,324/ - . 4 . BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METALS AND THE PROFIT @ 12.5% ESTIMATED BY THE AO ON THE DISPUTED PURCHASES IS ON HIGHER SIDE. THUS IT IS ARGUED THAT THE PROFIT BE ESTIMATED AT A REASONABLE RATE TAKING INTO ACCOUNT THE NATURE OF BUSINESS OF THE APPELLANT. ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A) CONFIRMING THE ADDITI ON OF RS.14,38,324/ - MADE BY THE AO. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. AS MENTIONED EARLIER THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METALS. THE AO HAS MENTIONED THAT IN RESPONSE TO THE QUERY RAISED BY HIM, THE ASSESSEE COULD FURNISH FEW DETAILS BUT COULD NOT LINK THE PURCHASES WITH CORRESPONDING SALES. THE AO HAS ESTIMATED THE PROFIT @ 12.5% ON THE DISPUTED PURCHASES OF RS.14,38,324/ - . CONSIDERING THE NATURE OF BUSINES S OF THE APPELLANT, WE FIND THAT SUCH AN ESTIMATION IS ON A HIGHER SIDE. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE NATURE OF BUSINESS OF THE APPELLANT WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO 5% OF THE DISPUTED PURCHASES O F RS.1,15,06,586/ - AND BRING TO TAX RS.5,75,330/ - ONLY. SHRI CHUNILAL R. SHAH ITA NO. 4185/MUM/2018 4 6 . IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/05/2019. SD/ - SD/ - (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 13/05/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI