ACIT - 19 (3), MUMBAI V. RISHABH STEEL HOUSE, MUMBAI

ITA 5699/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7391 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 133(6); 143(1); 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 5699 / MUM . /201 8 ( ASSESSMENT YEAR : 20 07 08 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 19(3), MUMBAI . APPELLANT V/S RISHABH STEEL HOUSE 101/102, RISHABH HOUSE 301, DUNCAN ROAD M.A. ROAD, MUMBAI 400 004 PAN AACFR2807C . RESPONDENT REVENUE BY : SMT. JOTHI LAKSHMI NAYAK ASSESSEE BY : MS. RUTUJA N. PAWAR DATE OF HEARING 09 . 10 .2019 DATE OF ORDER 25.10.2019 O R D E R PER SAKTIJIT DEY. J.M. CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 16 TH JULY 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 30, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2007 08 AND 2011 12. HOWEVER, IN THE PRESENT A PPEAL, WE ARE CONCERNED WITH ASSESSMENT YEAR 2007 08 ONLY. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE REDUCTION OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES TO 5%. 2 RISHABH STEEL HOUSE 3. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON FERROUS METAL S . FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 30 TH OCTOBER 2007 , DECLARING TOTAL INCOME OF ` 15,81,001. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESS ED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, GOVE RNMENT OF MAHARASHTRA, THAT THE ASSESSEE IS ONE OF THE BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN ENTITIES IDENTIFIED AS HAWALA OPERATORS BY THE SALES TAX D3EPARTMENT, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES OF ` 93,68,034, CLAIMED TO HAVE BEEN MADE FROM THREE PARTIES. FURTHER, TO VERIFY THE GENUINENESS OF SUCH PURCHASE S, THE ASSESSING OFFICER CONDUCTED INDEPENDENT ENQUIRY BY ISSUING NOTICE S UNDER SECTION 133(6) OF THE ACT. HOWEVER, ALL SUC H NOTICES RETURNED BACK UNSERV ED. FURTHER, IT IS OBSERVED BY THE ASSESSING OFFICER THAT IN RESPONSE TO TH E QUER Y RAISED BY HIM, THE ASSESSEE FURNISHE D COPY OF PURCHASE BILLS, BANK STATEMENT, SALES TAX / VAT CHALLAN S , LEDGER ACCOUNT OF PURCHASES IN ASSESSEES BOOKS, ETC. HOWEVER, THE ASSESSEE COULD NOT FURNISH DELIVERY CHALLAN, LORRY RECEIPTS, ETC. THUS, ULTIMATELY, THE ASSESSING 3 RISHABH STEEL HOUSE OFFICER CONCLUDED THAT THE PURCHASES ARE NOT GENUINE. HOWEVER, RELYING UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH, [2013] 356 ITR 451 (GUJ.) , THE ASSESSING OFFICER ESTIMATED THE PROFIT ON THE NON GENUINE PURCHASES @ 20% AND ACCORDINGLY ADDED BACK AN AMOUNT OF ` 18,73,607. BEING AGGRIEVED WITH THE AFORESAID ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CON SIDERING THE SUBMISSIONS OF THE ASSESSEE AND HAVING FOUND THAT WHILE DECIDING IDENTICAL NATURE OF DISPUTE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR S 2006 07, 2009 10, 2010 11 AND 2011 12, THE TRIBUNAL HAS RESTRICTED THE ADDITION TO 5% OF THE NON GENUINE PU RCHASES , LEARNED COMMISSIONER (APPEALS) FOLLOWED THE SAME AND DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 5% OF THE NON GENUINE PURCHASES. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELYING UPON THE OBSERVATI ONS OF THE ASSESSING OFFIC ER SUBMITTED , ONCE THE PURCHASES WERE FOUND TO BE NON GENUINE , THE ASSESSING OFFICER SHOULD HAVE ADDED THE ENTIRE PURCHASES. SHE SUBMITTED , THE ASSESSING OFFICER WAS MORE THAN REASONABLE IN ESTIMATING THE PROFIT @ 20%. THUS, SHE SUBMITTED , THE ADDITION MAD E BY THE ASSESSING OFFICER SHOULD BE RESTORED. 4 RISHABH STEEL HOUSE 6. PER CONTRA, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN EARLIER ASSESSMENT YEARS, THE TRIBUNAL HAS RESTRICTED THE ADDITION TO 5% OF THE NON GENUINE PURCHASES. SHE SUBMITTED , FACTS BEING IDENTICAL, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN FOLLOWING THE DECISION OF THE TR IBUNAL. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, THOUGH , THE ASSESSING OFFICER HAD OBSERVED THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE GENUINENESS OF PURCHASES, HOWEVER, ULTIMATELY, HE HAS ESTIMATED PROFIT ON SUC H PURCHASES @ 20% FOR THE PURPOSE OF MAKING THE ADDITION. RELYING UPON THE DECISION OF THE TRIBUN AL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR S 2006 07, 2009 10, 2010 11 AND 201 1 12, LEARNED COMMISSIONER (APPEALS) HAS RESTRICTED THE ADDITION TO 5% OF THE NO N GENUINE PURCHASES. ON A PERUSAL OF THE AFORESAID ORDER DATED 22 ND DECEMBER 2017, PASSED BY THE TRIBUNAL, IT IS NOTICED THAT THE TRIBUNAL AFTER CONSIDERING ALL ASPECTS OF THE ISSUE INCLUDING THE PERCENTAGE OF PROFIT GENERATED IN THIS PARTICULAR LINE OF BU SINESS CARRIED ON BY THE ASSESSEE HAD ULTIMATELY HELD THAT THE PRO FIT ON NON GENUINE PURCHASES SHOULD BE ESTIMATED @ 5%. IT IS RELEVANT TO OBSERVE , LEARNED COMMISSI ONER (APPEALS)S DECISION IN RESPECT OF ASSESSMENT YEAR 2011 12 IN THE IMPUGNED ORDER, IN TH E MEANWHILE , HAS BEEN UPHELD BY THE TRIBUNAL WHILE DECIDING THE CROSS APPEALS BY THE ASSESSEE AND REVENUE IN THE APPEAL 5 RISHABH STEEL HOUSE BEING ITA NO.1326/MUM./2016 AND ITA NO.1208/MUM./2016, IN THE ORDER CITED SUPRA. THERE BEING NO MATERIAL CHANGE IN FACTS OF THE PRESENT CASE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH CITED SUPRA IN ASSESSEES OWN CAS E, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUNDS RAISED ARE DISMISSED. 8. IN THE RESULT, REVENUES APPE AL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.10. 2 019 SD/ - MANOJ KUMAR AG GARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 25.10.2019 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