SUBHASH VITAL KANEKAR, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, 28(3), MUMBAI

ITA 5642/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7736 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH GAIKWAD LD
• Assessee Lawyers: DEVENDRA JAIN LD
• Keywords: Reason to believe; TDS
• Section: 143(3); 143(1); 13; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANO J KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 5642 /MUM/201 9 ( / ASSESSMENT YEAR : 20 12 - 13 ) SUBHASH VITHAL KANEKAR PLOT NO. A - 106, TTC INDUSTRIAL AREA, KH AIRANE MIDC, THANE BELAPUR ROAD NAVI MUMBAI - 400 710 / VS. D C IT - 2 8 (3 ) 3 RD FLOOR, TOWER NO. 6, RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI - 400 703 ./ ./ PAN/GIR NO . A DOPK - 3710 - A ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI DEVENDRA JAIN LD. AR REVENUE BY : SHRI KAILASH GAIKWAD LD. DR / DATE OF HEARING : 26 /08 /2021 / DATE OF PRONOUNCEMENT : 26/08/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. A GGRIEVED BY CONFIRMATION OF CERTAIN ADDITION OF ALLEGED B OGUS PURCHASES OF RS.14.66 LACS FOR ASSESSMENT YEAR 2012 - 13 , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 ON 26/03/2015 WHICH WAS CONFIRMED BY LD. CIT(A) - 26, MUMBAI VIDE IMPUGNED ORDER DATED 28/06/2019. THE A SSESSEE BEING RESIDENT INDIVIDUAL IS STATED TO BE ENGAGED IN THE BUSINESS OF PRINTING AND 2 SUPPLY OF OFFSET PRINTED BANNERS. THE ORIGINAL RETURN WAS PROCESSED U/S 143(1) WHICH WAS REOPENED VIDE NOTICE U/S 148 DATED 31/10/2013. 2. THE LD. AR ASSAILED THE ORD ER OF LD. AO ON LEGAL GROUNDS BY SUBMITTING THAT THE CASE WAS REOPENED ON MERE SUSPICION / GUESS - WORK AND THEREFORE, THE REOPENING WAS INVALID. ON MERITS, LD. AR SUBMITTED THAT THE ADDITIONS MAY BE ESTIMATED AT 15% AS ACCEPTED BY ASSESSEE IN AYS 2010 - 11 & 2011 - 12. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT LD. AO HAD SUFFICIENT REASONS TO REOPEN THE CASE AND THE ADDITIONS WERE QUITE JUSTIFIED. OUR ADJUDICATION WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 THE PERUSAL OF REASONS RECORDED TO REOPEN THE C ASE OF THE ASSESSEE WOULD SHOW THAT AS PER INFORMATION RECEIVED FROM DGIT (INV.), IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASE IN AYS 2010 - 11 & 2011 - 12 WHICH ULTIMATELY CULMINATED INTO CERTAIN ADDITIONS IN THE HANDS OF THE ASSESSEE. THESE ADDIT IONS HAVE BEEN ACCEPTED BY THE ASSESSEE. ON THE BASIS OF SAID INFORMATION, LD. AO FORMED AN OPINION THAT THE ASSESSEE WOULD HAVE TAKEN BOGUS BILLS IN AY 2012 - 13 ALSO TO SUPPRESS PROFITS. ANOTHER REASON OF REOPENING WAS THAT THERE WAS DIF FERENCE IN TDS FIGU RES REFLECTED BY THE ASSESSEE IN THE RETURN OF INCOME VIS - - VIS FIGURES AVAILABLE WITH THE DEPARTMENT. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW. THE ASSESSEE OBJECTED TO THE SAME HOWEVER, THE OBJECTIONS WERE DISPOSED - OFF BY SPEAKING ORD ER DATED 16/01/2015. 3.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS. 14.66 LACS FROM 6 ENTITIES AS DETAILED IN PARA - 4 OF THE ASSESSMENT ORDER. SINCE THE ASSESSEE COULD NOT 3 SUBSTANTIATE THE PURCHASES TO TH E SATISFACTION OF LD. AO, THE SAME WERE ADDED TO THE INCOME OF THE ASSESSEE. 3.3 UPON FURTHER APPEAL, LD. CIT(A) UPHELD THE REOPENING BY OBSERVING THAT AT THE INITIATION STAGE, WHAT WAS REQUIRED IS ONLY A REASON TO BELIEVE AND NOT THE ESTABLISHED FACT OF E SCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION TO BE CONSIDERED WAS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. BASED ON PRECISE INFORMAT ION AS RECEIVED FROM DGIT(INV.), LD. AO HAD THIS BELIEF AND REOPENED THE CASE. THEREFORE, THE SAME WAS PERFECTLY VALID IN THE EYES OF LAW. ON MERITS, THE QUANTUM ADDITION WAS CONFIRMED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. SO FAR AS T HE VALIDITY OF REASSESSMENT PROCEEDING IS CONCERNED, IT COULD BE GATHERED THAT THE ORIGINAL RETURN WAS PROCESSED U/S 143(1). SUBSEQUENTLY, UPON RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.), IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASE IN AYS 2010 - 11 & 2011 - 12. ON THE BASIS OF SAID INFORMATION, LD. AO FORMED A BELIEF THAT ASSESSEE WOULD HAVE TAKEN BOGUS BILLS IN AY 2012 - 13 ALSO TO SUPPRESS PROFITS. ANOTHER REASON OF REOPENING WAS THE FACT THAT THERE WAS DIFFERENCE IN TDS FIGURES. ON THE GIVEN FACTS, IN OUR OPINION, THE PRESENCE OF THIS MATERIAL / INFORMATION WAS QUITE ENOUGH TO REOPEN THE CASE AND NO INFIRMITY COULD BE FOUND IN REOPENING THE CASE OF THE ASSESSEE. THE LEGAL GROUNDS, THUS RAISED, STAND DISMISSED. 5. REGARDING QUANTUM OF ADDITIONS , LD. AR HAS SUBMITTED THAT SIMILAR ISSUE AROSE IN AYS 2010 - 11 & 2011 - 12 WHEREIN LD. AO ESTIMATED ADDITION OF 15% IN SET - ASIDE PROCEEDINGS. SINCE THE SAME HAS BEEN ACCEPT E D BY BOTH THE SIDES , SIMILAR ESTIMATION MAY BE MADE IN THIS YEAR . 4 CONCURRING WITH THE SAME AND ADOPTING CONSISTENT APPROACH IN THE MATTER , W E DIRECT LD. AO TO ESTIMATE THE ADDITIONS @15% OF RS. 14,66,668/ - WHICH COMES TO RS. 2,20,000/ - . THE BALANCE ADDITION STAND DELETED. 6. THE APPEAL STANDS PARTLY ALLOWED . ORDER PRONOUNCED ON 26 TH AUGUST , 2021 . SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 26 /08 /2021 SR.PS, DHANANJAY / COPY OF THE OR DER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.