ALIASGAR F. MAGAR, MUMBAI V. INCOME TAX OFFICER-20(1)(1), MUMBAI

ITA 4604/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8875 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HAMALATHA
• Assessee Lawyers: SHAFAKAT ARIF
• Keywords: Reopening of assessment
• Section: 133(6); 148

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 4604 /MUM/ 2017 (ASSESSMENT YEAR 20 09 - 10 ) MR. ALISAGAR FAKHRUDDIN MAGAR REKAB TOWER C WING, 1211/12 E.S. PATANWALA MARG GURUPDEO, MAZGAON MUMBAI - 400 033 PAN : AABPM4619G V S . ITO 20(1)91) PIRAMAL CHAMBERS MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI SHAFAKAT ARIF DEPARTMENT BY MS. N. HAMALATHA DATE OF HEARING 1 .1 1 . 201 7 DATE OF PRONOUNCEMENT 1 . 11 . 201 7 O R D E R THE APPEAL FILED B Y THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27 - 03 - 2017 PASSED BY LD CIT(A) - 32, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN PARTIALLY CONFIRMING THE ADDITION RELATING TO BOGUS PURCH ASES. THE ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF REOPENING OF ASSESSMENT. 2. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF METAL FABRICS. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT CERTAIN PARTIES ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIALS AND UPON NOTICING THAT THE ASSESSEE HAS PURCHASED GOODS FROM SOME OF SUCH PARTIES IN THE YEAR UNDER CON SIDERATION TO THE TUNE OF RS.118.93 LAKHS, THE AO REOPENED THE ASSESSMENT OF THIS YEAR BY ISSUING NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS MR. ALISAGAR FAKHRUDDIN MAGAR 2 PURCHASED GOODS FROM GREY MARKET AND NOT FROM THE HAWALA SUPPLIERS. ACC ORDINGLY HE ESTIMATED THE PROFIT FROM THE IMPUGNED PURCHASES AT 12.50% OF THE VALUE OF PURCHASES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD CIT(A) CONFIRMED THE VALIDITY OF REOPENING OF ASSESSMENT. HOWEVER HE GAVE PARTIAL RELIEF TO T HE ASSESSEE BY RESTRICTING THE ADDITION TO 9.26%, BEING THE RATE OF GROSS PROFIT DECLARED FOR THE YEAR UNDER CONSIDERATION. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. 3. THE LD A.R SUBMITTED THAT THE REOPENING HAS BEEN DONE ON PRESUMPTION BA SIS AND HENCE IT IS NOT VALID. FURTHER HE SUBMITTED THAT THE GOODS PURCHASED FROM THESE PARTIES HAVE BEEN SOLD/CONSUMED, MEANING THEREBY, THE PURCHASES CANNOT BE IN DOUBT. ACCORDINGLY HE SUBMITTED THAT THE ENTIRE ADDITION SHOULD HAVE BEEN DELETED BY LD C IT(A). 4. ON THE CONTRARY, THE LD D.R PLACED RELIANCE ON THE DECISION RENDERED BY LD CIT(A). 5. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. I NOTICE THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT. ACCORDINGLY I AM OF THE VIEW THAT IT CANNOT BE SAID THAT THE REOPENING WAS ON PRESUMPTION BASIS. ACCORDINGLY I UPHOLD THE VALIDITY OF REOPENING OF ASSESSMENT. 6. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E ASSESSING OFFICER HAS ACCEPTED THE FACT OF PURCHASE OF MATERIALS, BUT HE HAS DOUBTED THE SOURCE OF PURCHASES ONLY. HENCE THE AO HAS TAKEN THE VIEW THAT THE ASSESSEE WOULD HAVE MADE PROFIT FROM SUCH PURCHASES AND ACCORDINGLY HE HAS ESTIMATED THE PROFIT E LEMENT EMBEDDED IN SUCH PURCHASES AT 12.50% OF THE VALUE OF PURCHASES. IN MY VIEW, MERE SUBMISSION OF PURCHASE BILLS AND PAYMENT DETAILS WOULD NOT BE MR. ALISAGAR FAKHRUDDIN MAGAR 3 SUFFICIENT, PARTICULARLY WHEN THE SUPPLIERS HAVE BEEN DECLARED AS HAWALA DEALERS. I NOTICE THAT THE ASSE SSEE HAS NOT OBTAINED ANY CONFIRMATION LETTER FROM THE SUPPLIERS NOR HE COULD PRODUCE THEM BEFORE THE AO. FURTHER THE NOTICES ISSUED TO THE SUPPLIERS U/S 133(6) OF THE ACT HAS BEEN RETURNED BACK UNSERVED. HENCE, IN MY VIEW, IT CANNOT BE SAID THAT THE ASS ESSEE HAS PROVED THE PURCHASES BEYOND DOUBT. UNDER THESE SET OF FACTS, THE AO WAS JUSTIFIED IN ESTIMATING THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES, WHICH HE HAS ESTIMATED AT 12.50%. HOWEVER, THE LD CIT(A) HAS RESTRICTED THE SAME TO THE RATE OF GROSS PROFIT DECLARED BY THE ASSESSEE. IN THE ABSENCE OF ANY OTHER MATERIAL, I DO NOT FIND ANY REASON TO INTERFERE WITH THE VIEW TAKEN BY LD CIT(A). ACCORDINGLY I CONFIRM THE ORDER PASSED BY LD CIT(A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 1 .11 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 1 / 11 / 20 1 7 COP Y 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// ( ASSTT. REGISTRAR /SENIOR PS ) PS ITAT, MUMBAI