ITO 19 (3)(1), MUMBAI V. RESHMIDEVI JAMANTRAJ JAIN, MUMBAI

ITA 5666/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0855 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAK
• Assessee Lawyers: RANJANA GADGE
• Section: 147; 144

Judgement Text

+ IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN , ACCOUNTANT MEMBER ITA NO. 5666 / MUM ./201 8 ( ASSESSMENT YEAR : 20 09 10 ) INCOME TAX OFFICER WARD 19 ( 3 )(1), MUMBAI . APPELLANT V/S RESHMIDEVI JAMANTRAJ JAIN PROP: M/S. PRAVIN METAL 43/45, 1 ST KUMBHARWADA 1 ST PATHAN STREET, MUMBAI 400 004 PAN : ADAPJ5326R . RESPONDENT ASSE SSEE BY : MS. RANJANA GADGE REVENUE BY : SMT. JYOTHI LAKSHMI NAYAK DATE OF HEARING 26 . 11 .2019 DATE OF ORDER 19.12.2019 O R D E R PER SAKTIJIT DEY, J.M. THE AFORESAID APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 20 TH JULY 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 30 , MUMBAI , PERTAINING TO THE ASSESSMENT YEAR 20 09 10 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PART DELETION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON GENUINE PURCHASES. 2 RESHMIDEVI JAMANTRAJ JAIN 3. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON FERRO US METAL. ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH ` 26,81,359, CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE FROM 11 PARTIES ARE NON GENUINE AS THE CONCERNED PARTIES HAVE BEEN IDENTIFIED AS HAWALA OPERATOR PROVIDING ACCOMMODATION BILLS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. SINCE , THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER, ASSESSMENT WAS COM PLETED UNDER SECTION 144 R/W SECTION 1 47 OF THE ACT TO THE BEST OF JUDGMENT VIDE ORDER DATED 5 TH MARCH 2015. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HELD THAT THE PURCHASES SHOWN BY THE ASSESSEE ARE NOT VERIFIABLE AND ACCORDINGLY REJECTED TH E BOOKS OF ACCOUNT. FURTHER, HE ADDED BACK THE PURCHASES OF ` 26,81,359, TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT O F FACTS AND MATERIAL ON RECORD LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , BEFORE THE ASSESSING OFFICER THE ASSESSEE DID NOT FURNISH ANY EVIDENCE TO PROV E 3 RESHMIDEVI JAMANTRAJ JAIN THE GENUINENESS OF PURCHASES. THEREFORE, THE ENTIRE NON GENUINE PURCHASES HAVE TO BE ADDED TO THE INCOME OF THE ASSESSEE. IN SUPPORT OF SUCH SUBMISSIONS, SHE REFERRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN N.K. PROTEINS LTD. 6. THE LEARNED AUTHORI SED REPRESENTATIVE SUBMITTED , THE SALES EFFECTED BY THE ASSESSEE HAVE NEVER BEEN DOUBTED. THEREFORE, ONLY PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES C AN BE CONSIDERED FOR ADDITION. SH E SUBMITTED , THE DISALLOWANCE MADE BY LEARNED COMMISSIONER (APPEALS) @ 12. 5% IS ON A MUCH HIGHER SIDE AS THE GROSS PROFIT RATE IN SUCH LINE OF BUSINESS VARIES BETWEEN 3% AND 4%. THUS, S HE SUBMITTED , THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) SHOULD BE UPHELD. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THOUGH , IT MAY BE A FACT THAT THE ASSESSEE WAS UNABLE TO PROVE THE SOURCE OF PURCHASES THROUGH CLINCHING EVIDENCE, HOWEVER, THERE IS NO DOUBT OR SUSPICION RAISED WITH REGARD TO THE SALES EFFECTED BY THE ASSESSEE. THEREFORE, LOGICALLY, IN THE AB SENCE OF SUCH PURCHASES, THE ASSESSEE COULD NOT HAVE EFFECTED THE SALES. IN SUCH CIRCUMSTANCES, AS PER THE CONSISTENT VIEW OF THE TRIBUNAL AND DIFFERENT HIGH COURT S , THE PROFIT ELEMENT EMBEDDED IN THE NON GENUINE PURCHASES HAS TO BE CONSIDERED FOR ADDITION. IN THE FACTS OF THE PRESENT CASE, LEARNED COMMISSIONER (APPEALS) HAS ESTIMATED THE PROFIT 4 RESHMIDEVI JAMANTRAJ JAIN ELEMENT @ 12.5% AND RESTRICTED THE DISALLOWANCE TO THAT EXTENT. CONSIDER ING THE NATURE OF BUSINESS CARRIED OUT BY THE ASSESSEE, IN OUR CONSIDERED OPINION, THE DISALLOWANCE MADE BY LEARNED COM MISSIONER (APPEALS) IS JUST AND PROPER, HENCE, DOES NOT CALL FOR ANY INTERFERENCE FROM US. ON CAREFUL ANALYSIS OF THE DECISION OF THE HON 'BLE SUPREME COURT IN N.K. PROTEINS, IT IS FOUND TO BE FACTUALLY DISTINGUISHABLE , THUS , NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. GROUNDS ARE DISMISSED. 8. IN THE RESULT, APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.12.2019 SD/ - N.K.PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 19.12.2019 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