ACIT CIRCLE 17(2), Mumbai V. SHRI. JAGAT UTTAMCHAND SHAH, Mumbai

ITA 584/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESHPANDE
• Keywords: Corroborative evidences
• Section: 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I G. MANJUNATH A , ACCOUNTANT MEMBER ITA NO. 584 / MUM . /201 9 ( ASSESSMENT YEAR : 20 11 12 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 17(2), MUMBAI . APPELLANT V/S SHRI JAGAT UTTAMCHAND SHAH JAGAT ENTERPRISES, 504, 5 TH FLOOR SHRADDHA RESIDENCY CHANDRAVARKAR ROAD, BORIVALI (W) MUMBAI 400 092PAN AACPS9041H . RESPONDENT REVENUE BY : SHRI SAURABH DESHPANDE ASSESSEE BY : NONE DATE OF HEARING 03 .0 2 .2020 DATE OF ORDER 04.03.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 6 TH NOVEMBER 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 56 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 11 120 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION 2 SHRI JAGAT UTTAMCHAND SHAH SEEKING ADJOURNMENT EITHER . AC CORDINGLY, 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 RECORD. 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PART RELIEF GRANTED BY LEARN ED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS AN IMPORTER AND RE SELLER OF BEARING, HARDWARE AND INDUSTRIAL SUPPLIERS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME ON 4 TH JULY 2011, DECLARING INCOME OF ` 10,60,012. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PRO CESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, MUMBAI, THROUGH OFFICE OF THE DGIT (INV.), MUMBAI, THAT PURCHASES WORTH ` 98,79,819, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM FOUR ENTITIES ARE NON GENUINE, 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 THROUGH SUPPORTING EVIDENCES. THOUGH, THE ASSESSEE FURNISHED PURCHASE BILLS AND SOME OTHER DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF PURCHASES, HOWEVER, THE ASSESSING OFFICER WAS NOT 3 SHRI JAGAT UTTAMCHAND SHAH CONVINCED WITH THEM AND ULTIMATELY CONCLUDED THAT THE PURCHASES MADE BY T HE ASSESSEE ARE NON GENUINE. HOWEVER, ULTIMATE LY HE RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASE AND MADE AN ADDITION OF ` 12,34,977. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CO NSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATE RIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) REDUCED THE ADDITION TO 7% OF THE NON GENUINE PURCHASES. 6. WE HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, THOUGH , THE ASSESSING OFFICER HAS HELD THE DISPUTED PURCHASE S AS NON GENUINE, HOWEVER, INSTEAD OF DISALLOWING THE ENTIRE PURCH ASES, HE HAS MADE DISALLOWED 12.5% OF SUCH PURCHASES WHICH IMPLIES THAT THE ASSESSING OFFICER ONLY DOUBTS THE SOURCE OF SUCH PURCHASES. LOOKING AT THE GROSS PROFIT RATE DECLA RED BY THE ASSESSEE @ 18.18%, LEARNED COMMISSIONER (APPEALS) HAS RESTRICTED THE DISALLOWANCE TO 7% OF THE NON GENUINE PURCHASES. EVEN, FURTHER ADDITION @ 7% A CTUALLY HIKES THE GROSS PROFIT RATE TO MORE THAN 25%. THIS, IN OUR VIEW, IS MORE THAN ENOUGH TO TAKE CARE OF LEAKAGE OF REVENUE, IF ANY, ON ACCOUNT OF PURCHASES HAVING BEEN MADE FROM UNDECLARED SOURCE. THEREFORE, I N OUR CONSIDERED OPINION, THE AFORESAID DE CISION OF LEARNED COMMISSIONER (APPEALS) IS JUST AND REASONABLE, HENCE, DOES NOT CALL 4 SHRI JAGAT UTTAMCHAND SHAH FOR ANY INTERFERENCE FROM US. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE BY DISMISSING THE GROUND RAISED BY THE REVENUE. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 04.03.2020 SD/ - G. MANJUNATH A ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 04.03.2020 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