INCOME TAX OFFICER-31(1)(1), MUMBAI V. SHRI AMRATLAL K. BUDDHADEV, MUMBAI

ITA 5132/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0178 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 06-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHI
• Section: 133(6); 143(1); 139(1); 147; 131

Judgement Text

1 I.T.A. NO.5132 & 5133/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) I.T.A. NO.513 2 & 5133 /MUM/2019 (ASSESSMENT YEAR S 200 7 - 0 8 & 2008 - 09 ) INCOME - TAX OFFICER - 31(1)(1) MUMBAI VS SHRI AMRATLAL K BUDDHADEV 9, GUJRAT INDL.COMPOUND VISHVESHWAR NAGAR OFF AAREY ROAD, GOREGON (E) MUMBAI - 400 063 PAN : AADPB0434A APPELLANT RESPONDENT APPELLANT BY SHRI SANJAY SETHI, DR RESPONDENT BY SHRI KIRIT SANGHAVI , AR DATE OF HEARING 25 - 02 - 2021 DATE OF PRONOUNCEMENT 1 1 - 03 - 2021 O R D E R THESE ARE REVENUES APPEALS AGAINST A COMMON ORDER DATED 0 6 - 0 5 - 2019 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 42 , MUMBAI FOR THE ASSESSMENT YEAR S 2007 - 08 AND 2008 - 09 . 2. THE ONLY COMMON DISPUTE IN THESE AP PEALS RELATES TO DELETION OF DISALLOWANCE MADE ON ACCOUNT OF NON GENUINE PURCHASES. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, AN INDIVIDUAL, IS ENGAGED IN MANUFACTURE AND SALE OF CORRUGATED BOXES. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, 2 I.T.A. NO.5132 & 5133/MUM/2019 ASSESSEE HAD FILED HI S RETURNS OF INCOME UNDER SECTION 139(1) OF THE ACT. RETURNS OF IN COME SO FILED WERE PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION THAT CERTAIN PURCHASES MADE BY THE ASSESSEE IN THE RELEVANT ASS ESSMENT YEAR S FROM ARUN PAPER & IRON TRADERS ARE NON GENUINE AS THE SAID ENTITY, IN TURN, HAD PURCHASED THE GOODS FROM CERTAIN DEALERS WHO WERE IDENTIF IED AS HAWALA OPERATORS BY THE S ALES - TAX DEPARTME NT, GOVERNMENT OF MAHARASHTRA. ON THE BASIS OF SUCH INFO RMATION, THE ASSESSING OFFIC ER RE - OPENED THE ASSESSMENTS UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PUR CHASES WORTH RS. 6,58,191/ - IN ASSESSMENT Y EAR 2006 - 07 AND RS . 1,47,392/ - IN ASSESSMENT Y EAR 2007 - 08 CLAIMED TO HAVE BEEN MADE F ROM ARUN PAPER & IRON TRADERS. FURTHER, TO INDEPENDENTLY VERIFY SUCH PURCHASES, THE ASSESSING OFFICER CONDUCTE D ENQUIRY BY ISSUING NOTICES UNDER SECTION 133(6) OF THE ACT AS WELL AS THROUGH SUMMONS ISSUED UNDER SECTION 131 OF THE ACT TO THE SELLING DEALER. ULTIMATELY, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES MADE FROM ARUN PAPER & IRON TRADERS ARE NON GENUINE. ACCORDINGLY, HE DISALLOWED THE PURCHASES AND ADDED BACK TO THE IN COME OF THE ASSESSEE. ASSESSEE CONTESTED THE ADDITION S BEFORE THE FIRST APPELLATE AU THORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FA CTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER (APPEALS) DELETED THE ADDITION. 4. THE LEAR NED DEPARTMENTAL R EPRESE NTATIVE SUBMITTED, THE ASSESSEE HAVING FAILED TO PROVE THE FACT THAT THE PURCHASES ARE FROM GENUINE SOURCES, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER HAS TO BE RESTORED. 3 I.T.A. NO.5132 & 5133/MUM/2019 5. THE LEARNED COUN S EL FOR THE ASSESSEE, ON THE OTHER HA ND, STRONGLY RELIED UPON THE OBSERVATIONS OF LEARNED COMMISSIONER (APPEALS). 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AN D PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, THE PURCHASES FRO M ARUN PAPER & IRON TRADERS WERE TREATED AS NON GENUINE BASING ON THE FACT THAT THE SAID ENTITY, IN TURN, HAD PURCHASED GOODS FROM CERTAIN DEALERS, WHO WERE IDENTIF IED AS HAWALA OPERATORS BY THE SALES - TAX DEPARTMENT. HOWEVER, IT IS A FACT ON RECORD THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD ISSUED SUMMONS TO ARUN PAPER & IRON TRADERS AND IN RESPONSE TO THE SUMMONS ISSUED, THE DIRECTOR OF THE SAID CONCERN HAD APPEARED IN PERSON BEFORE THE ASSESSING OFFICER AND HAD FURNISHED DOCUMENTA RY EVIDENCES TO CONFIRM THE SALES MADE BY THAT COMPANY TO THE ASSESSEE. IT IS ALSO A FACT ON RECORD THAT NOT ONLY THE ASSESSEE HAD PURCHASED THE GOODS FROM ARUN PAPER & IRON TRADERS BUT THE SAID SELLING DEALERS NAME DOES NOT APPEAR IN THE LIST OF HAWALA O PERATORS MAINTAINED BY THE SALES - TAX DEPARTMENT. THE ALLEGATION AGAINST ARUN PAPER & IRON TRADERS IS ONLY TO THE EXTENT THAT IT HAS SHOWN PURCHASES FROM CERTAIN PARTIES , WHO HAVE BEEN I DENTIFIED AS HAWALA OPERATORS. THEREFORE, WHEN ARUN PAPER & IRON TRADE RS IS NOT APPEARING IN THE LIST OF NON GENUINE DEALERS MAINTAINED BY THE SALES - TAX DEPARTMENT AND THE SAID PARTY HAS CONFIRMED THE SALES MADE TO THE ASSESSEE BY APPEARIN G BEFORE THE ASSESSING OFFICER, THERE IS NO REASON TO DISALLOW THE PURCHASES MADE BY TH E ASSESSEE. FURTHER, AS OBSERVED BY THE LEARNED COMMISSIONER (APPEALS), IN THE ASSESSMENT PROCEEDINGS OF ARUN PAPER & IRON TRADERS, THOUGH , SOURCE OF PURCHASES MADE WAS DOUBTED, HOWEVER, THERE WAS NO DOUBT WITH REGARD TO THE SALES EFFECTED. THATS WHY DISALLOWANCE ON ACCOUNT OF ALLEGED NON GENUINE PURCHASES WAS RESTRICTED TO 4 I.T.A. NO.5132 & 5133/MUM/2019 12.5% , BEING THE PROFIT ELEME NT EMBEDDED IN SUCH PURCHASES. THUS, FROM THE AFORESAID FACTS, IT BECOMES VERY MUCH CLEAR THAT THE SALES EFFECTED BY ARUN PAPER & IRON TRADER S TO THE ASSESSEE A RE GENUINE AND FREE FROM DOUBT. THAT BEING THE CASE, WE DO NOT SEE ANY REASON TO IN TERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUNDS ARE DISMISSED. 7. IN THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCE D ON 1 1 /03 /2021. S D / - S D / - (N. K. PRADHAN) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 1 /03 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI