ITO WARD 2 (5), Thane V. SMT. MALTIDEVI BIRBAL SINGH, Thane

ITA 5574/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4498 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Section: 201; 147

Judgement Text

1 I.T.A. NO. 5574 /MUM/2019 I N THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) I.T.A. NO. 5574 /MUM/201 9 (ASSESSMENT YEAR 20 1 0 - 11 ) ITO, WD.2(5), MUMBAI VS SMT. MALTIDEVI BIRBAL SINGH 302, SALASAR POOJA, VENKATESH PARK BHAYANDAR (W), THANE - 401 105 PAN : ACEPS2525E APPELLANT RESPONDENT APPELLANT BY SMT. SMITA VERMA, DR RESPONDENT BY SHRI SHYAM SABOO , AR DATE OF HEARING 25 - 0 3 - 2021 DATE OF PRONOUNCEMENT 1 5 - 0 4 - 2021 O R D E R PER SAKTIJIT DEY, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 0 6 - 0 6 - 201 9 OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 1 , THANE , FOR THE ASSESSMENT YEAR 20 1 0 - 11 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THEL EARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES . 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF WIRE DRAW. FOR THE ASSESSMENT YEAR UNDER DISPUTE 2 I.T.A. NO. 5574 /MUM/2019 ASSESS E E FILED H ER RETURN OF INCOME ON 30 - 09 - 2010 DECLARING TOTAL INCOME OF RS.6,87,140/ - . SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED IN FORMATION FROM THE S ALES - TAX DEPARTMENT INDICATING THAT PURCHASES WORTH RS.16,53,174/ - SHOWN TO HAVE BEEN MADE DURING THE YEAR ARE NON GENUINE , AS , CONCERNED SELLING DEALERS HAVE BEEN FOUND TO BE PROVIDING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMAT ION, THE ASSESSING OFFICER REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE INCOME TAX ACT , 1961 . AFTER CALLING FOR CERTAIN INFORMATION / DETAILS FROM THE ASSESSEE AND EXAMINING THEM, THE ASSESSING OFFICER ULTIMATELY TREATED THE PURCHASES OF RS.16,53,174/ - AS NON GENUINE AND DISALLOWED THE SAME. ASSESSEE CONTESTED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, L EARNED COMMISSIONER OF INCOME - T AX (APPEALS) RESTRIC TED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. THOUGH , THE ASSESSING OFFICER HAS TREATED CERTAIN PURCHASES MADE BY THE ASSESSEE AS NON GENUIN E ON THE BASIS OF INFORMATION RECEIVED FROM THE S ALES - TAX DEPARTMENT, HOWEVER, HE HAS NOT DISPUTED THE SALES TURNOVER OF THE ASSESSEE. THUS, IN THE AFORESAID SCENARIO, THE LOGICAL CONCLUSION WOULD BE , IN THE ABSENCE OF THE SALES, THE ASSESSEE COULD NOT HA VE ACHIEVED THE SALES TURNOVER. THAT BEING THE CASE, THE ENTIRE PURCHASES CANNOT BE DISALLOWED, BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR DISALLOWANCE. KEEPING IN VIEW THE AFORESAID LEGAL PRINCIPLE, THE DISALLOWANCE OF PR OFIT ELEMENT MADE BY L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) BY ESTIMATING AT 12.5% OF THE ALLEGED NON GENUINE PURCHASES BEING FAIR AND REASONABLE , IS UPHELD. GROUNDS ARE DISMISSED. 5. IN THE RESULT, APPEAL IS DISMISSED. 3 I.T.A. NO. 5574 /MUM/2019 ORDER PRONOUNCED ON 1 5 /0 4 /2 021. S D / - S D / - ( MANOJ KUMAR AGGARWAL ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 5 /0 4 /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