NAVJEEVAN SYNTHETICS PVT. LTD., MUMBAI V. DCIT- 4 (3)(1), MUMBAI

ITA 5524/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8528 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Assessee Lawyers: H S RAHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 5524 /MUM/201 8 ( ASSESSMENT YEAR : 2010 - 11 ) & ITA NO. 5525 /MUM/201 8 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. NAVJEEVAN SYNTHETICS PVT. LTD. 158/164, LAXMI BHAVAN KALBADEVI ROAD MUMBAI 400 002 VS. DCIT 4(3)(1) AAYAKAR BHAVAN MUMBAI 400 020 PAN/GIR NO. AAACN1370K (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI H.S. RAHEJA REVENUE BY MS. KAVITA P KAUSHIK DATE OF HEARING 06 / 01 /2 020 DATE OF PRONOUNCEMENT 08 / 01 /2020 / O R D E R PER M. BALAGANESH (A.M) : TH ESE APPEAL S IN ITA NO. 5524/MUM/2018 & 5525/MUM/2018 FOR A.Y RS . 2009 - 10 & 2010 - 11 ARISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 9, MUM BAI IN APPEAL NO. CIT(A) - 9/CIR.4/498/2015 - 16 & CIT(A) - 9/CIR.4/144/2015 - 16 RESPECTIVELY DATED 23/07/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO ITA NO S . 5524 & 5525/MUM/2018 M/S. NAVJEEVAN SYNTHETICS P. LTD 2 AS ACT) DATED 25/ 01/2016 & 27/03/2015 RESPECTIVELY BY THE LD. DY. COMMISSIONER OF INCOME TAX 4(3)(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). 2. THE GROUND NO. 1 RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF REOPENING WAS STATED TO BE NOT PRESSED BY THE LD. AR A T THE TIME OF HEARING FOR WHICH NECESSARY ENDORSEMENT HAS BEEN MADE IN OUR FILE. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED FOR BOTH THE YEARS. 3 . THE GROUND NO.2 RAISED BY THE ASSESSEE IS WITH REGARD TO ACTION OF THE LD. CIT(A) CONFIRMING THE DISA LLOWANCE MADE ON ACCOUNT OF NON - GENUINE PURCHASES @12.5%. 3 .1 . WE HAVE HEARD RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT ASSESSEE HAD MADE PURCHASES FROM CERTAIN DEALERS WHOSE NAME HAD APPEARED IN THE HAWALA LIST PREPARED BY THE SALES TAX DEPARTMENT OF M UMBAI AND ACCORDINGLY, THE LD. AO HAD BROUGHT TO TAX THE PROFIT ELEMENT @12.5% ON THE TOTAL VALUE OF PURCHASES MADE FROM THOSE DEALERS. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD SUBMITTED PURCHASE BILLS / INVOICES ISSUED BY THESE ALLEGED HA W ALA PARTIES, P URCHASE ORDERS, DELIVERY CHALLANS, DETAILS OF PAYMENT, BANK STATEMENTS, STOCK RECORDS ETC., BEFORE THE LOWER AUTHORITIES. IT IS NOT IN DISPUTE THAT THE PAYMENTS HAVE BEEN MADE TO THESE PARTIES BY ACCOUNT PAYEE CHEQUES. WE FIND THAT ASSESSEE IS ENGAGED IN T HE BUSINESS OF MANUFACTURING AND TRADING IN TEXTILE CLOTH AND PROCESSING OF HOSIERY AND VELVET CLOTH. IT IS NOT IN DISPUTE THAT GOODS PURCHASED FROM THE ALLEGED SUPPLIERS HAVE BEEN EITHER CONSUMED / SOLD BY THE ASSESSEE AND HENCE, ONLY PROFIT ELEMENT THERE ON NEEDS TO BE BROUGHT TO TAX. SINCE, IN THE INSTANT CASE, THE ENTIRE DOCUMENTARY RECORDS WERE DULY FURNISHED BY THE ASSESSEE INCLUDING THE PROOF OF DELIVERY OF ITA NO S . 5524 & 5525/MUM/2018 M/S. NAVJEEVAN SYNTHETICS P. LTD 3 GOODS BY WAY OF DELIVERY CHALLANS AND STOCK RECORDS AND AT THE SAME TIME GOODS HAV ING BEEN PURC HASED FROM THE GREY MARKET BY THE ASSESSEE IS ALSO NOT DISPUTED. HENCE, WHAT COULD HAVE BEEN SAVED BY THE ASSESSEE IN THE INSTANT CASE WOULD BE ONLY THE VAT PORTION AND LITTLE BIT OF INCIDENTAL PROFIT IN THE OVERALL TRANSACTION. HENCE, WE HOLD THAT THE DIS ALLOWANCE @8% ON THE TOTAL VALUE OF PURCHASE FROM THESE ALLEGED PARTIES WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE ASSESSEE FOR BOTH THE YEARS IS PARTLY ALLOWED. 4. THE GROUND NO.3 RAISED BY THE ASSESSEE FOR BOTH THE YEARS IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 / 01 /2020 SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 08 / 01 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, M UMBAI 6. GUARD FILE. //TRUE COPY//