ASST CIT 25(3), MUMBAI V. P.B. CONSTRUCTION COMPNAY, MUMBAI

ITA 6062/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0321 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMA
• Keywords: Unexplained expenditure; Corroborative evidences
• Section: 69C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 6062 / MUM . /201 8 ( ASSESSMENT YEAR : 20 10 11 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 25(3), MUMBAI . APPELLANT V/S P.B. CONSTRUCTION COMPANY B 7, KADAMGIRI CHS HANUMAN ROAD, VILE PARLE (E) MUMBAI 400 049 PAN AACFP2842B . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI KUMAR PADMAPANI BORA DATE OF HEARING 18 . 12 .2019 DATE OF ORDER 30.12.2019 O R D E R PER SAKTIJIT DEY. J.M. T HE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 2 ND AUGUST 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 37, MUMBAI, FOR THE ASSESSMENT YEAR 2010 11. 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. EVEN, T HERE IS NO 2 P.B. CONSTRUCTION COMPANY APPLICATION BY THE ASSESSEE SEEKING ADJOURNMENT EITHER. KEEPING IN VIEW THE AFORESAID FACT, 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 AFORESAID APPEAL IS CONFINED TO PART DELETION OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS STATED TO BE ENGAGED IN THE BUSINESS OF EXECUTING CIVIL CONTRACT WORK. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 1,59,40,100. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AS WELL AS FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH ` 15,37,2 54, CLAIMED TO HAVE BEEN MADE F R O M TWO PARTIES ARE NON GENUINE , 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 PURCHASES THROUGH SUPPORTING EVIDENCES. AS ALLEGED BY THE ASSESSING OFFICER, THE A SSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF PURCHASES THROUGH ANY COGENT EVIDENCE. ACCORDINGLY, HE HELD THE PURCHASES OF ` 15,37,254, AS NON GENUINE AND DISALLOWING THE SAME AS UNEXPLAINED EXPENDITURE UNDER 3 P.B. CONSTRUCTION COMPANY SECTION 69C OF THE ACT ADDED BACK TO THE INCOM E OF THE ASSESSEE. BEING AGGRIEVED, THE AS SESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND RELYING UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. S HETH, [2013] 356 ITR 451 (GUJ.) , LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. NO DOUBT, FROM THE MATERIALS ON RECORD, IT IS EVIDENT THAT THE ASSESSEE COULD NOT FURNISH SUFFICIENT DOCUMENTARY EVIDENCE TO CONCLUSIVELY PROVE THE SOURCE OF DISPUTED PURCHASES. HOWEVER, THE FACT THAT THE ASSESSEE HAS EXECUTED CONTRACT WORK DURING THE YEAR BY UTILIZING MATE RIAL PURCHASED IS BORNE OUT FROM RECORD AS THE ASSESSEE HAS SHOWN INCOME OF MORE THAN ` 1.5 CRORE FROM ITS BUSINESS ACTIVITY. THEREFORE, THE FACT OF PURCHASES OF MATERIAL AND UTILIZATION IN CONTRACT WORK STANDS PROVED. THE DISPUTE IS ONLY WITH REGARD TO SO URCE OF PURCHASES. IN SUCH SITUATION, IT CAN BE ASSUMED THAT THE ASSESSEE MIGHT HAVE PURCHASED SUCH MATERIAL FROM GREY MARKET AND REGULARIZE D SUCH PURCHASES BY OBTAINING ACCOMMODATION BILLS. THAT BEING THE CASE, THE ADDITION OF PROFIT ELEMENT EMBEDDED IN S UCH PURCHASES HAS T O BE MADE. AS COULD BE SEEN, LEARNED COMMISSIONER (APPEALS) HAS ESTIMATED SUCH PROFIT 4 P.B. CONSTRUCTION COMPANY ELEMENT @ 12.5% AND RESTRICTED THE ADDITION TO THAT EXTENT. IN OUR CONSIDERED OPINIO N, THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS) BEING J UST AND PROPER DOES NOT REQUIRE ANY INTERFERENCE FROM US. GROUNDS RAISED ARE DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 30.12.2019 SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMB AI, DATED: 30.12.2019 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