ITO 27(3)(1), Mumbai V. SHRI. RAJENDRA M PAWAR, Mumbai

ITA 5575/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4502 (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: 2011-2012
• Appeal Filed On: 27-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Section: 133(6); 201; 147

Judgement Text

1 I.T.A. NO.5575/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. 5 5 7 5 /MUM/201 9 (ASSESSMENT YEAR 20 1 1 - 1 2 ) INCOME - TAX OFFICER - 27(3 )( 1 ) MUMBAI VS SHRI RAJENDRA M PAWAR 1/18, 2 ND FLOOR, PRAGATI CHS S.G. BARVE MARG, CHEMBUR MUMBAI - 400 071 PAN : A AGPP7819N APPELLANT RESPONDENT APPELLANT BY SMT. SMITA VERMA (DR) RESPONDENT BY NONE 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 04 - 0 6 - 201 9 OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 2 5 , MUMBAI, FOR THE ASSESSMENT YEAR 20 1 1 - 1 2 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENT FOR THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE L EARNED DEPARTMENTAL R EPRESENTATIVE AND ON THE BASIS OF MATERIALS ON RECORD. 2 I.T.A. NO.5575/MUM/2019 3 . THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF ALLEGED NON GENUINE PURCHASES. 4 . BRIEFLY THE FACTS ARE, THE ASSESSE E IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF TRADING IN CHEMICALS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FI L ED HIS RETURN OF INCOME ON 08 - 09 - 2011 DECLARING TOTAL INCOME OF RS.8,76,000/ - . SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORM ATION FROM THE S ALES - TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH THE D G IT (INV) THAT PURCHASES WORTH RS. 22,90,650 / - SHOWN TO HAVE BEEN MADE DURING THE YEAR FROM CERTAIN PARTIES ARE NON GENUINE , AS , THE CONCERNED PARTIES ARE ENGAGED ONLY IN PRO V IDING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, HE CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE DISPUTED PURCHASES . THOUGH , THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES TO CLAIM THE PURCHASES AS GENUINE; HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED. FURTHER, AS ALLEGED BY THE ASSESSING OFFICER, NOTICES ISSUED U NDER SECTION 133(6) OF THE ACT TO THE CONCERNED SELLING DEALERS RETURNED BACK UNSERVED . THUS, ULTIMATELY, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES ARE NON - GENUINE. HOWEVER, CONSIDERING THE FACT THAT THE ASSESSEE HAS EFFECTED CORRESPONDING SALES, HE WAS OF THE VIEW THAT THE GOODS HAVE BEEN PURCHASED FROM GREY MARKET. ACCORDINGLY, HE DISALLOWED 12.5% OUT OF THE ALLEGED NON GENUINE PURCHASES AND MADE AN ADDITION OF RS.2,86,337/ - . WHILE CONSIDERING THE ISSUE IN APPEAL, L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) RESTRICTED THE DISALLOWANCE TO 5% OF THE ALLEGED NON GENUINE PURCHASES. 3 I.T.A. NO.5575/MUM/2019 5 . WE HAVE HEARD THE LEARNED D EPARTMENTAL R EPRESENTATIVE AND PERUSED MATERIALS ON RECORD. IT IS EVIDENT, WHAT THE ASSESSING OFFICER DOUBTS IS THE SOURCE OF PURCHASES AND NOT THE PURCHASE ITSELF. THE ASSESSING OFFICER WAS OF THE VIEW THAT PURCHASES HAVE BEEN EFFECTED FROM GREY MARKET. THEREFORE, HE HAS DISALLOWED ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING IT AT 12.5%. AS NOTED BY US, EARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS REDUCED THE DISALLOWANCE TO 5% OF THE ALLEGED NON GENUINE PURCHASES RELYING UPON A DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A SSESSMENT Y EAR 2009 - 10 VIDE ITA NO.1070/MUM/2018 DATED 16 - 11 - 2018. HE HAS ALSO NOTED THAT THE FACTS IN BOTH THE ASSESSMENT YEARS ARE IDENTICAL. KEEPING IN VIEW THE AFORESAID FACTUAL POSITION, WE DO NOT FIND ANY VALID REASON TO INTERFERE WITH THE DECISION OF THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS). ACCORDINGLY, THE IMPUGNED ORDER OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS UPHELD BY DISMISSING THE GROUNDS RAISED. 6 . IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED ON 1 5 /0 4 /2021. S D / - S D / - ( MANOJ KUMAR AGGARWAL ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 5 /0 4 /2021 PAVANAN 4 I.T.A. NO.5575/MUM/2019 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