ITO 21 (1)(5), Mumbai V. M/S ILLUMINATION ENTERPRISES, Mumbai

ITA 4971/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3658 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Section: 133(6); 143(1); 201; 147

Judgement Text

1 I.T.A. NO.4971/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) I.T.A. NO. 4971 /MUM/201 9 (ASSESSMENT YEAR 20 09 - 1 0 ) ITO - 21(1)(5), MUMBAI VS M/S ILLUMINATION ENTERPRISES 3, PUSHPAGANDHA, APPASAHEB MARATHE MARG, PRABHADEVI MUMBAI - 400 025 PAN : A AAFI6464Q APPELLANT RESPONDENT APPELLANT BY MS. SMITA VERMA, DR RESPONDENT BY NONE DATE OF HEARING 04 - 02 - 2021 DATE OF PRONOUNCEMENT 0 3 - 0 3 - 2021 O R D E R THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 31 - 0 5 - 201 9 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 33 , MUMBAI FOR THE ASSESSMENT YEAR 2009 - 1 0 . 2. WHEN THE APPEAL WAS CALLED UP FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIALS ON RECORD. 2 I.T.A. NO.4971/MUM/2019 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (AP PEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE, THE ASSESSEE, A PARTNERSHIP FIRM, IS STATED TO BE ENGAGED IN THE BUSINESS OF SPECIALIZATION IN LIGHTING SYSTEM. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASS ESSEE FILED ITS RETURN OF INCOME ON 25 - 09 - 2009 DECLARING T OTAL INCOME OF RS.19,82,050/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES - TAX D EPARTMENT THROUGH INVESTIGATION WING THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS REPRESENTING PURCHASES WORTH RS.3,27,940/ - FROM SEVEN PARTIES IDENTIFIED AS HAWALA OPERATORS. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER REOPENED TH E ASSESSMENT U NDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE DISPUTED PURCHASES. FURTHER, TO INDEPENDENTLY VERIFY THE PURCHASES, THE ASSESSING OFFICER ISSUED N OTICES U NDER SECTION 133(6) OF TH E ACT TO THE CONCERNED PARTIES. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, ALL SUCH NOTI CES RETURNED BACK UNSERVED. FURTHER, THE DOCUMENT ARY EVIDENCES FURNISHED BY THE ASSESSEE ALSO COULD NOT SATISFY THE ASSESSING OFFICE R REGARDING TH E GENUINENESS OF THE PURCHASES. THEREFORE, THE ASSESSING OFFICER TREATED THE PURCHASES AS NON GENUINE. HAVING HELD SO, THE ASSESSING OFFICER DISALLOWED 40% OUT OF SUCH PURCHASES AND ADDED BACK AN AMOUNT OF RS.1,31,176/ - TO THE INCOME OF THE A SSESSEE . ASSESSEE CONTESTED THE AFORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, 3 I.T.A. NO.4971/MUM/2019 LEARNED COMMISSIONER (APPEALS) REDUCED THE DISALLOWANCE TO 20% OF THE ALLEGED NON GENUINE PURCHASES. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, THE ASSESSEE HAVING NOT PROVED THE FACT THAT PURCHASES MADE FROM THE CONCERNED PARTIES ARE GENUINE , THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD HAVE BEEN UPHELD. 6. I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE A ND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSING OFFICER WAS IN POSSESSION OF CERTAIN INFORMATION FROM THE S ALES - T AX DEPARTMENT WHICH INDICATED THAT CERTAIN PURCHASES MADE BY THE ASSESSEE WERE NON GENUINE. HOWEVER, IN COURSE OF ASSESSMENT PROCEEDINGS, AS NOTED BY THE ASSESSING OFFICER, THE ASSESSEE HAD FURNISHED PURCHASE INVOICES, LEDGER ACCOUNT COPIES, COPIES OF DELIVERY CHALLAN , COPIES OF BANK STATEMENT SHOWING PAYME NT MADE TO THE SELLING DEALER S , ETC. FURTHER, IT IS A FACT THAT THE SALES EFFECTED BY THE ASSESSEE HAS NOT BEEN DISPUTED. THUS, THE DOUBT ENTERTAINED BY THE ASSESSING OFFICER WAS ONLY WITH REGARD TO THE SOURCE OF PURCHASES. FOR THIS REASON ALONE, INSTEAD OF DISALLOWING THE ENTIRE PURCHASES, THE ASSESSING OFFICER HAS DISALLOWED 40% OUT OF SUCH PURCHASES WHICH HAS BEEN REDUCED TO 20% BY LEARNED COMMISSIONER (APPEALS). THUS, THE DISPUTE IS ONLY WITH REGARD TO THE QUANTUM OF DISALLOWANCE TO BE MADE. AFTER CON SIDERING ALL RELEVANT FACTS, I AM OF THE OPINION THAT DISALLOWANCE MADE AT 40% BY THE ASSESSING OFFICER IS ON A MUCH HIGHER SIDE. THEREFORE , I AM INCLINED TO UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE TO 20% OF TH E ALLEGED NON GENUINE PURCHASES. GROUNDS ARE DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. 4 I.T.A. NO.4971/MUM/2019 ORDER PRONOUNCED ON 0 3 / 0 3 /2021. S D / - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DT : 0 3 /0 3 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI