M/S.SHREE ENGINEERING WORKS, MUMBAI V. ITO WARD 3(3), MUMBAI

ITA 6078/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9130 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Section: 69C; 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO . 6078 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 11 ) SHREE ENGINEERING WORKS C/O A.D. N.A. KULKARNI WADAL BUILDING, NEAR DNS BANK MANPADA ROAD, DOMBIVALI (EAST) MUMBAI 451201 PAN AAKFS5985L . APPELLANT V/S INCOME TAX OFFICER WARD 3( 3 ), MUMBAI . RESPONDENT ASSESSEE BY : SHRI N.A. KULKARNI REVENUE BY : SHRI CHAUDHARY ARUNKUMAR SINGH DATE OF HEARING 03 .09.2019 DATE OF ORDER 25.09.2019 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 27 TH SEPTEMBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 1, THANE, FOR THE ASSESSMENT YEAR 2010 11. 2 . THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE ADDITION OF ` 2,14,874, ON ACCOUNT OF NON GENUINE PURCHASES. 2 SHREE EN R GINEERING WORKS 3 . BRIEF FACTS ARE, THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN CHEMICALS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 21,350. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN PARTIES, THE ASSESSING OFFICER RE OPE NED 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 PURCHASES OF ` .2,14,874 CLAIMED TO HAVE BEEN MADE FROM TWO PARTIES . FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT. HOWEVER , NOTHING SUBSTANTIAL CAME OUT FROM SUCH ENQUIRY AS THE CONCERNED PARTIES WERE NOT FOUND IN THE GIVEN ADDRESS. THE ASSESSEE ALSO COU LD NOT CONVINCE THE ASSESSING OFFICER THROUGH PROPER SUPPORTING DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES. IN VIEW OF THE AFORESAID, THE ASSESSING OFFICER TREATED THE PURCHASES OF ` 2,14,874, AS BOGUS AND ADDED BACK TO THE INCOME OF THE AS SESSEE UNDER SECTION 69C OF THE 3 SHREE EN R GINEERING WORKS ACT. BEING AGGRIEVED WITH THE SAID ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 . DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE WAS AGAIN CALLED UPON TO PROVE THE GENUINENESS OF PURCHASES. IN THIS CONTEXT, LEARNED COMMISSIONER (APPEALS) RAISED SPECIFIC QUERIES TO THE ASSESSEE AND CALLED UPON IT TO FURNISH VARIOUS DETAILS TO PROVE THE PURCHASE. HOWEVER, AS ALLEGED BY LEARNED COMMISSIONER (APPEALS), THE ASSESSEE FAILED TO FURNISH THE DETAILS CAL LED FOR EXCEP T FURNISHING COPIES OF PURCHASE BILLS , BANK STATEMENT, BALANCE SHEET, PROFIT & LOSS ACCOUNT, ETC. BEING OF THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF PURCHASES, LEARNED COMMISSIONER (APPEALS) NOT ONLY UPHELD THE DECISION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT BUT ALSO CONFIRMED THE ADDITION MADE BY HIM. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESSEE APART FROM BEING A MANUFACTURER ALSO UNDERTAKES JOB WORKS. HE SUBMITTED , WITHOUT EFFECTING THE PURCHASES THE ASSESSEE COULD NOT HAVE SOLD THE GOODS. THEREFORE, ENTIRE PURCHASES MADE BY THE ASSESSEE COULD NOT HAVE BEEN DISALLOWED. HE SUBMITTED , THE ADDITION AT BEST CAN BE RESTRICTED TO THE GROSS PROFIT RATE OF 13% SHOWN BY THE ASSESSEE. 4 SHREE EN R GINEERING WORKS 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS). 7 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF PURCHASES MADE WORTH ` 2,14,874, BY FURNISHING ANY COGENT EVIDENCE. IN FACT, IN THE COURSE OF APPELLATE PROCEEDINGS, LEARNED COMMISSIONER (APPEALS) HAD GIVEN ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE THE PURCHASES BY FURNIS HING EVIDENCE INCLUDING QUANTITATIVE DETAILS OF PURCHASE, CONSUMPTION, SALES, ON PART Y WISE, MONTH WISE BASIS. HOWEVER, IT IS EVIDENT , EXCEPT FURNISHING COPIES OF PURCHASE BILLS, BANK STATEMENT, BALANCE SHEET, PROFIT & LOSS ACCOUNT, ETC., THE ASSESSEE HAS NOT FURNISHED ANY OTHER DETAILS BEFORE LEARNED COMMISSIONER (APPEALS). NO DELIVERY CHALLAN OR TRANSPORTATION BILLS WERE FURNISHED TO PROVE THE ACTUAL DELIVERY OF GOODS. EVEN , ON A QUERY FROM THE BENCH, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT T HE ASSESSEE DOES NOT MAINTAIN ANY STOCK REGISTER. FURTHER, NO QUANTITATIVE DETAILS OF PURCHASE , CONSUMPTION AND SALES WERE FURNISHED EITHER BEFORE THE DEPARTMENTAL AUTHORITIES OR EVEN BEFORE THIS FORUM. IN SUCH CIRCUMSTANCES, THE ASSESSEES CLAIM THAT IT H AD PURCHASED THE GOODS FROM THE CONCERNED PARTIES CANNOT BE ACCEPTED. FURTHER, ABSENCE OF QUANTITATIVE DETAILS OF PURCHASE, CONSUMPTION AND SALE 5 SHREE EN R GINEERING WORKS CREATES A SERIOUS DOUBT REGARDING THE ACTUAL FACTUM OF PURCHASE OF GOODS. IN SUCH CIRCUMSTANCES, ASSESSEES CON TENTION TO ESTIMATE THE PROFIT @ 13% OF THE NON GENUINE PURCHASES IS UNACCEPTABLE. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE ASSESSING OFFICER IN DISALLOWING THE PURCHASES OF ` 2,14,874. HOWEVER, IT HAS BEEN CONTENDED BY THE ASSESSEE TH AT THE ACTUAL QUANTUM OF DISPUTED PURCHASE IS ` 2,06,968. THIS CONTENTION OF THE ASSESSEE SHOULD BE FACTUALLY VERIFIED BY THE ASSESSING OFFICER AND THE ADDITION SHOULD BE MADE TO THE EXTENT OF THE ACTUAL QUANTUM OF PURCHASE MADE FROM THE CONCERNED PARTIES. GROUNDS ARE DISMISSED. 8 . IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.09.2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 25.09.2019 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