DCIT-33(3), Mumbai V. M/S SHRADDHA DEVELOPERS , Mumbai

ITA 587/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3585 (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: 2013-2014
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Section: 133(6); 195; 13

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. 587 / MUM . /201 9 ( ASSESSMENT YEAR : 20 13 14 ) DY . COMMISSIONER OF INCOME TAX CIRCLE 33(3 ), MUMBAI . APPELLANT V/S M/S. SHRADDHA DEVELOPERS JIGAR P. VORA, BHARAT VILLA BOGILALFADIA ROAD KANDIVALI (W), MUMBAI 400 067 PAN AAPFS0041N . RESPONDENT ASSESSEE BY : SHRI RAVINDRA POOJARY REVENUE BY : S HRI SAURABH DESHPANDE 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 29 TH OCTOBER 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 45 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 13 14 . 2. THE DISPUTE IN THE P RESENT APPEAL IS CONFINED TO PART IAL RELIEF GRANTED TO THE ASSESSEE IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 2 M/S. SHRADDHA DEVELOPERS 3. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 27 TH SEPTEMBER 2013, DECLARING LOSS OF ` 16,15,022. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON TH E BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES WORTH ` 23,16,976, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM THREE PARTIES . AS OBSERVED BY THE ASSESSING OFFICER, IN RESPONSE TO THE QUERY RAISED, THE ASSESSEE FILED VARIOUS DETAILS AND ALSO MADE SUBMISSIONS IN SUPPORT OF THE PURCHASES MADE. THE ASSESSING OFFICER, HOWEVER, WAS NOT CONVINCED EITHER WITH THE SUBMISSIONS MADE BY THE ASSESSEE OR THE DETAILS FURNISHED. HE OBSERVED , DESPITE AMPLE OPPORTUNITY BEING GIVEN, THE ASSESSEE FAILED TO PRODUCE THE CONCERNED PARTIES. FURTHER, HE OBSERVED , THE CONCERNED SELLING DEALERS HAVE ALREADY ADMITTED BEFORE THE SALES TAX AUTHORITIES THAT THEY ARE PROVIDING ACCOMMODATION BILLS. HE ALSO OBSERVED THAT NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED SELLING DEALERS RETURNED BACK UN SERVED. HE OBSERVED , THE ASSESSEE ALSO FAILED TO FURNISH DELIVERY CHALLAN. THUS, ON THE BASIS OF THE AFORESAID FACTS, THE ASSESSING OFFIC ER ULTIMATELY TREATED THE PURCHASES WORTH ` 23,16,976, AS NON GENUINE AND ADDED BACK TO THE 3 M/S. SHRADDHA DEVELOPERS INCOME OF THE ASSESSEE. THE AS SESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN T HE CONTEXT OF F ACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT , IN THE COURSE OF ASSE SSMENT PROCEEDINGS, AS PER THE ASSESSING OFFICERS OWN ADMISSION, THE ASSESSEE FURNISHED VARIOUS DETAILS TO PROVE THE GENUINENESS OF PURCHASES. FURTHER, THE ASSESSING OFFICER HAS NOT DOUBTED OR DISPUTED THE SALES TURNOVER OF THE ASSESSEE. THEREFORE, THE LO GICAL CONCLUSION WOULD BE , IN THE ABSENCE OF CORRESPONDING PURCHASE, THE ASSESSEE COULD NOT HAVE EFFECTED THE SALES. TH US, ULTIMATELY, THE DISPUTE/ DOUBT IS ONLY WITH REGARD TO THE SOURCE OF PURCHASES. CONSI DERING THE AFORESAID ASPECT, LEARNED COMMISSIONER (APPEALS) HAS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASES WHICH CAN BE CONSIDERED AS A REASONABLE PROFIT ELEMENT EMBEDDED IN NON GENUINE PURCHASES. FURTHER, LEARNED COMMISSIONER (APPEALS) HAS CORRECTLY DISTINGUISHED THE FACTUAL DIFFER ENCE BETWEEN THE ASSESSEES CASE AND THE CASE OF N.K. PROTEINS, V/S DCIT, [2017] 84 TAXMANN.COM 195 ( SC ) . THUS, CONSI DERING ALL THE RELEVANT FACTS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE ORDER 4 M/S. SHRADDHA DEVELOPERS PASSED BY LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF NON GENUINE PURCHASES @ 12.5% IS FAIR AND REASONABLE, HENCE, DOES NOT REQUIRE ANY INTERFERENCE FROM US. GROUNDS ARE DISMISSED. 6. IN THE RESULT, APPEAL STANDS 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