DCIT CIRCLE-2, KALYAN V. SHRI. DHARMU P BUDHWANI, KALYAN

ITA 4976/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3662 (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: 2011-2012
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Gift
• Section: 133(6); 201

Judgement Text

1 ITA 4976/MUM/2019 THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY ( JUDICIAL MEMBER) I.T.A. NO.4 9 76 /MUM/201 9 (ASSESSMENT YEAR : 201 1 - 1 2 ) DCIT, CIRCLE - 2, KALYAN VS SHRI DHARMU P BUDHWANI PROP OF CHANDER TRADERS 2 ND FLOOR, SAI DARSHAN APTS K.B.A. ROAD, ULHASNAGAR - 421 003 PAN : A GYPB7441A (APPELLANT) (RESPONDENT) APPELLANT BY S MT. SMITA VERMA (DR) RESPONDENT BY NONE DATE OF HEARING 0 4 - 0 2 - 2021 DATE OF PRONOUNCEMENT 0 3 /0 3 /2021 O R D E R PER SAKTIJIT DEY, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 1 0 - 0 5 - 201 9 OF LD.C OMMISSIONER OF INCOME - TAX (A PPEALS ) - 3 , THANE FOR THE ASSESSMENT YEAR 201 1 - 1 2 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. 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 MATERIAL AVAILABLE ON RECORD. 2 ITA 4976/MUM/2019 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRAN TED BY THE LEARNED C OMMISSIONER (A PPEALS ) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE, THE ASSESSE E , AN INDIVIDUAL, IS A WHOLESALE DEALER IN COUNTRY LIQUOR. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED HIS RETURN OF INCOME ON 02 - 07 - 2011 DECLARING TOTAL INCOME OF RS.28,28,540/ - .DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED PURCHASES OF RS.4,42,589/ - DUR ING THE YEAR FROM M/S ASHTAVINAYAK TRADING CO. HOWEVER, HE OBSERVED, AS PER THE INFORMATION AVAILABLE FROM THE SALES - TAX DEPARTMENT, THE SAID PARTY IS A HAWALA OPERATOR AND PROVIDES ACCOMMODATION BILLS WITHOUT ENTERING INTO ANY REAL TRANSACTION . HE, THEREF ORE, CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES MADE FROM THE SAID PARTY. AS OBSERVED BY THE ASSESSING OFFICER , WITHOUT FURNISHING ANY EVIDENCE, THE ASSESSEE SIMPLY FILED A REPLY CLAIMING THE PURCHASES TO BE GENUINE. FURTHER, HE OBSERVE D, NOTICE ISSUED U NDER SECTION 133(6) OF THE ACT TO VERIFY THE PURCHASES ALSO RETURNED BACK UNSERVED. THEREFORE, HE ULTIMATELY TREATED THE PURCHASES OF RS.4,42,589/ - AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. ASSESSEE CONTESTED THE AFORE SAID ADDITION BEFORE LEARNED C OMMISSIONER (A PPEALS ) . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, LEARNED C OMMISSIONER (A PPEALS ) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 5. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS ON RECORD. AS CAN BE SEEN FROM THE OBSERVATIONS OF LEARNED C OMMISSIONER (A PPEALS ) , THE ASSESSEE HAS FILED THE COMPARATIVE CHART OF GROSS PROFIT RATIO OF FO UR YEARS INCLUDING PRECEDING AND SUBSEQUENT YEARS. ON 3 ITA 4976/MUM/2019 PERUSING THE SAME, HE HAS FOUND THAT THE GROSS PROFIT RATE DECLARED IN THE IMPUGNED ASSESSMENT YEAR IS HIGHER AS COMPARED TO IMMEDIATELY PRECEDING YEAR. FURTHER , THE ASSESSEE HAS ALSO FURNISHED THE DETAILS OF CORRESPONDING SALES/DISTRIBUTION OF THE GOODS PURCHASED, WHICH ARE NOTHING BUT GIFT ITEMS SUCH AS PEN STANDS, CALCULATORS, HAND MIXER, GRINDERS, ETC. THUS, BEING OF THE VIEW THAT THE ASSESSEE MIGHT HAVE PURCHASED THE GOODS FROM THE GREY MARKET, THE LEARNED C OMMISSIONER (A PPEALS ) HAS RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT BY ESTIMATING IT AT 12.5%. 6. HAVING TAKEN NOTE OF ALL RELEVANT FACTS ARISING FROM RECORD, I DO NOT FIND ANY INFIRMITY IN THE AFORESAID DECISION OF LEARNED C OMMISSIO NER (A PPEALS ) . THEREFORE, I UPHOLD THE ORDER OF LEARNED C OMMISSIONER (A PPEALS ) ON THE ISSUE AND DISMISS THE GROUNDS RAISED. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON THIS 0 3 /0 3 /2021. S D / - (SAKTIJIT DEY) JUD ICIAL MEMBER MUMBAI, DATED : 0 3 / 0 3 /2021. PAVANAN, SR.P.S (ON CONTRACT) 4 ITA 4976/MUM/2019 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONENT. 3. THE CIT(A) 4. THE CIT 5. D.R., ITAT, MUMBAI. 6. GUARD FILE. //TRUE COPY// BY ORDER I.T.A.T., MUMBAI. 5 ITA 4976/MUM/2019