TARLIKA K SHAH, MUMBAI V. INCOME TAX OFFICER 31(3)(2), MUMBAI

ITA 5556/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9655 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Section: 133(6); 143(1); 145(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 5556 / MUM . /201 8 ( ASSESSMENT YEAR : 20 10 11 ) TARLIKA K. SHAH , 704, ANMOL PRIDE OPP. PATEL PETROL , OFF. S.V. ROAD NEAR HYUNDAI SHOW ROOM GOREGAON (W), MUMBAI 400 104 PAN AABFT9449F . APPELLANT V/S INCOME TAX OFFICER WARD 31 (3)( 2 ) , MUMBAI . RESPONDENT ASS ESSEE BY : NONE REVENUE BY : MS. R. KA V ITHA DATE OF HEARING 19 .0 2 .2020 DATE OF ORDER 13.03.2020 O R D E R T HIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 20 TH JUNE 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 42, MUMBAI, FOR THE ASSESSMENT YEAR 2010 11. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE DISALLOWANCE OF ` 5 ,22,057, MADE ON ACCOUNT OF NON GENUINE PURCHASES. 3. WHEN TH E APPEAL WAS CALLED FOR HEARING NO NE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUANCE OF NOTICE. THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER .IT IS ALSO NOTICED THAT ON EARLIER OCCASION 2 TARLIKA K. SHAH ALSO, NO ONE APPEARED ON BEHALF OF THE ASSESSEE . THUS, FROM THE AFORESAID FACTS, IT IS CLEAR THAT THE ASSESSEE IS NEITHER DILIGENT NOR INTERESTED IN PURSUING THE PRESENT APPEAL. ACCORDINGLY, I PROCEED TO DISPOSE OFF THE APPEAL EX PARTE , QUA THE ASSESSEE AF TER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. B RIEF FACTS ARE, THE ASSESSEE, AN INDIVIDUAL , IS ENGAGE D IN THE BUSINESS OF TRADING IN BUILDING MATERIAL. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, TH E ASSESSEE FILED HER RETURN OF INCOME ON 24 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 2,72,120. INITIALLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SUBSEQUENTLY, ON TH E BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH THE OFFICE OF THE DGIT (INV.), MUMBAI, THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION EN TRIES PROVIDED BY CERTAIN ENTITIES IDENTIFIED AS A HAWALA OPERATOR S BY THE SALES TAX DEPARTMENT , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE GENUINENESS OF PURCHASES AMOUNTING TO ` 13,31,855 CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM FIVE ENTITIES. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF PURCHASES, THE ASSESSING 3 TARLIKA K. SHAH OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALERS. HOW EVER, AS ALLEGED BY THE ASSESSING OFFICER , ALL SUCH NOTICES RETURNED BACK UN SERVED DUE TO UNAVAILABILITY OF THE ENTITIES IN THE GIVEN ADDRESS. FURTHER, ON VERIFYING THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER WAS NOT CONVINCED REGARDING THE GENUINENESS OF THE PURCHASES CLAIMED TO HAVE BEEN MADE. THE ASSESSING OFFICER OBSERVED , THE ASSESSEE FAILED TO FURNISH NOT ONLY WHEREABOUT OF THE PARTIES, BUT ALSO FAILED TO PRODUCE THEM. FURTHER, DELIVERY CHALLAN, LORRY RECEIPT, OCTROI RECEIPT, TRANS PORTATION DETAI LS, ETC., WERE NOT FURNISHED TO PROVE PHYSICAL DELIVERY OF GOODS. ACCORDINGLY, HOLDING THAT THE PURCHASES ARE NOT VERIFIABLE , THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT. THOUGH , HE HELD THAT THE PURCH ASES ARE NON GENUINE, H O WEVER, HE OBSERVED THAT IN RESPECT OF PURCHASES WORTH ` 8,09,798, THE ASSESSEE WAS ABLE TO PRODUCE BANK STATEMENT REFLECTING THE PAYMENTS MADE TOWARDS PURCHASES. THUS, HE WAS OF THE VIEW THAT THE ASSESSEE MIGHT HAVE PURCHASED THE GO ODS FROM SOME OTHER SOURCES AND ACCORDINGLY ESTIMATED THE PROFIT @ 12.5% OF SUCH PURCHASES. HOWEVER, IN RESPECT OF THE BALANCE AMOUNT OF ` 5,22,057 REPRESENTING PURCHASES MADE FROM TWO PARTIES, THE ASSESSING OFFICER DISALLOWED THE ENTIRE AMOUNT ON THE REAS ONING THAT THE ASSESSEE WAS NOT ABLE TO SHOW THAT THE PAYMENTS HAVE BEEN MADE FOR THE PURCHASES. ACCORDINGLY, HE COMPLETED THE ASSESSMENT. THOUGH, THE ASSESSEE 4 TARLIKA K. SHAH CONTESTED THE ADDITION MADE BY THE ASSESSING OFFICER, HOWEVER, LEARNED COMMISSIONER (APPEALS) UP HELD THE DISALLOWANCE. 5. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE GROUNDS RAISED, THE ASSESSEE HAS ONLY DISPUTED THE ADDITION OF ` 5,22,057. IT HAS BEEN URGED IN T HE GROUND THAT LIKE THE ESTIMATION OF PROFIT IN RESPECT OF OTHER PURCHASES, THE ASSESSING OFFICER SHOULD HAVE APPLIED THE PROFIT RATE OF 12.5% IN RESPECT OF PURCHASES MADE FROM THE OTHER TWO PARTIES. HAVING GONE THROUGH THE ASSESSMENT O RDER AS WELL AS THE ORDER OF LEARNED COMMISSIONER (APPEALS), I FIND THAT THE ONLY REASON THE ASSESSING OFFICER DID NOT APPLY THE PROFIT RATE @ 12.5% TO THE PURCHASES OF ` 5,22,057, MADE FROM TWO PARTIES IS, THE ASSESSEE WAS UNABLE TO FURNISH THE BANK STATEMENT REFLECTING THE PAYMENTS MADE TOWARDS THE PURCHASES. HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE SALES EFFECTED BY THE ASSESSEE. T HAT BEING THE CASE, I DO NOT FIND ANY JUSTIFICATION IN NOT APPLYING THE PROFIT RATE OF 12.5% IN RESPECT OF THE PURCHASES OF ` 5,22,057, AS WAS DONE IN CASE OF BA LANCE PURCHASES. ACCORDINGLY, I DIRECT THE ASSESSING OFFICER TO DISALLOW 12.5% OUT OF THE PURCH ASES OF ` 5,22,057. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED TO THE EXTENT INDICATED ABOVE. 5 TARLIKA K. SHAH 6. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 13.03.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI