ITO 19 (1)(4), MUMBAI V. DINESHKUMAR J. JAIN, MUMBAI

ITA 5707/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7389 (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: 2011-2012
• Appeal Filed On: 05-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 133(6); 143(1); 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 .5707 / MUM . / 2018 ( ASSESSMENT YEAR : 2011 12 ) INCOME TAX OFFICER WARD 19(1)(4), MUMBAI . APPELLANT V/S DINESHKUMAR J. JAIN 57, ROOM NO.222, TARDEO ROAD MUMBAI 400 007 PAN AGUPJ6735F . RESPONDENT ASSESSEE BY : NONE REVENUE BY : S MT. JOTHI LAKSHMI NAYAK DATE OF HEARING 09.10.2019 DATE OF ORDER 25.10.2019 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 30 TH JULY 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 30, MUMBAI, FOR THE ASSESSMENT YEAR 2011 12. 2. THE REVENUE HAS FILED THE PRESENT APPEAL BEING AG GRIEVED WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN REDUCING THE 2 DINESHKUMAR J. JAIN ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASE FROM 12.5% TO 6.5%. 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. EV EN , THE ASSESSEE HAS NOT FILED ANY APPLICATION SEEKING ADJOURNMENT. IN VIEW OF THE AFORESAID, WE PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON REC ORD. 4. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON FERROUS METALS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME ON 26 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 4,42,694. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AS WELL AS THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS REPRESENTING PURCHASES WORTH ` 86,30,304, CLAIMED TO HAVE BEEN MADE FROM FIVE PARTIES, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE AFORESAID 3 DINESHKUMAR J. JAIN PURCHASES. AS ALLEGED BY THE ASSESSING OFFICER, THE ASSESSEE COULD NOT FURNISH THE FULL DETAILS CALLED FOR. FURTHER, THE N OTICES ISSUED UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED SELLING DEALERS CALLING FOR CERTAIN INFORMATION ALSO RETURNED BACK UNSERVED. BASED ON THE AFORESAID FACTS, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES MADE BY THE ASSESSEE FROM THE CONCE RNED PARTIES ARE NOT GENUINE. ACCORDINGLY, AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER PROCEEDED TO ESTIMATE THE PROFIT ELEMENT ON THE NON GENUINE PURCHASES @ 12.5% AND MADE AN ADDITION OF ` 10,78,788. THE ASSESSEE CHALLENGE D THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 5. L EARNED COMMISSIONER (APPEALS), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD AND RELYING UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH, [2013] 356 ITR 451 (GUJ.), RESTRICTED THE ADDITION TO 6.5% OF THE NON GENUINE PURCHASES. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER SUBMITTED , THERE IS NO JUSTI FIABLE REASON ON THE PART OF LEARNED COMMISSIONER (APPEALS) TO REDUCE THE ADDITION TO 6.5%. SHE SUBMITTED , THE ASSESSING OFFICER WAS 4 DINESHKUMAR J. JAIN MORE THAN REASONABLE IN ESTIMATING THE PROFIT @ 12.5% INSTEAD OF ADDING THE ENTIRE NON GENUINE PURCHASES. 7. WE HAVE HEARD THE LEA RNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTED, THE ASSESSING OFFICER HAD TREAT ED THE PURCHASES AS NON GENUINE. H OWEVER, ULTIMATELY, HE HAS RESTRICTED THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. THUS, IT A PPEARS FROM THE AFORESAID ACTION OF T HE ASSESSING OFFICER THAT HE WAS CONVINCED THAT THE ASSESSEE MUST HAVE PURCHASED THE GOODS FROM SOME OTHER SOURCES BY AVOIDING PAYMENT OF SALES TAX / VAT. THE LEARNED COMMISSIONER (APPEALS) HAS REDUCED THE ADDITION TO 6 .5% OF THE PURCHASES. THUS, FROM THE AFORESAID FACTS, IT IS EVIDENT THAT THE DISPUTE BETWEEN THE PARTIES IS ONLY WITH R EGARD TO QUANTUM OF PROFIT ON THE NON GENUINE PURCHASES. IT IS NOTICED THAT THE LEARNED COMMISSIONER (APPEALS) HAS OBSERVED THAT THE VAT RATE ON THE GOODS PURCHASED BY THE ASSESSEE IS 4% AND THE PROFIT MARGIN ON SUCH PURCHASES WOULD BE 2.5%. T HUS, ON THE AFORESAID BASIS, LEARNED COMMISSIONER (APPEALS) HAS RESTRICTED THE ADDITION TO 6.5% OF THE NON GENUINE PURCHASES. IN OUR VIEW, THE AFORESA ID CONCLUSION DRAWN BY THE LEARNED COMMISSIONER (APPEALS) IS LOGICAL KEEPING IN VIEW THE ATTENDING FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GRO UND RAISED IS DISMISSED. 5 DINESHKUMAR J. JAIN 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.10.2019 SD/ - MANOJ KUMAR AGGARWAL 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