NANDINI ANUP SURVE, MUMBAI V. INCOME TAX OFFICER WARD-3(1), Thane

ITA 6085/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9910 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO .6085 / MUM . /2018 ( ASSESSMENT YEAR : 2009 10 ) NAND I NI ANUP SURVE G 1403, ETERNITY TEEN HAT NAKA KANAKIA SPACES, THANE 400 601 PAN AJNPS5422J . APPELLANT V/S INCOME TAX OFFICER WARD 3(1), THANE . RESPONDENT ASSESSEE BY : SHRI RAJESH ATHAVALE REVENUE BY : SHRI CHAUDHARY ARUNKUMAR SINGH DATE OF HEARING 03.09.2019 DATE OF ORDER 18.09.2019 O R D E R PER SAKTIJIT DEY, J.M. CAPTIONED APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 4 TH JUNE 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, PUNE, FOR THE ASSESSMENT YEAR 2009 10. 2 . GROUND NO.1.2, IS NOT PRESSED, HENCE DISMISSED. 3 . GROUND NO.1.7, BEING GENERAL IN NATURE DOES NOT REQUIRE ADJUDICATION. 2 NANDANI ANUP SURVE 4 . THE REST OF THE GROUNDS ARE ON THE ISSUE OF ADDITION OF ` 11,66,082, MADE ON ACCOUNT OF NON GENUINE PURCHASES. 5 . BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN THE BUSINESS OF MANUFACTURING ENGINEERING GOODS THROUGH HER PROPRIETARY CONCERN M/S. M.K. ENTERPRISES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HER RETURN OF INCOME ON 20 TH SEPTEMBER 2009, DECLARING INCOME OF ` 4,92,510. 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 SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT PURCHAS ES WORTH ` 11,66,082, CLAIMED TO HAVE BEEN MADE BY T HE ASSESSEE FROM THREE PARTIES ARE NOT GENUINE , AS THEY ARE IN THE NATURE OF ACCOMMODATION BILLS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES MADE BY FURNISHING CORROBORATING EVIDENCES. FURTHER, TO VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER CONDUCTED INDEPENDENT ENQ UIRY BY ISSUING NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, ALL SUCH NOTICES RETURNED BACK UN SERVED BY THE POSTAL AUTHORITY . FURTHER, ATTEMPT 3 NANDANI ANUP SURVE MADE BY THE ASSESSING OFFICER TO ASCERTAIN THE WHEREABOUTS OF THE CONCERNED PARTIES THROUGH WARD INSPECTOR ALSO PROVE D FUTILE. IT IS OBSERVED BY THE ASSESSING OFFICER THAT EXCEPT FURNISHING THE PROFIT & LOSS ACCOUNT, BALANCE SHEET, PARTY WISE DETAILS OF PURCHASE AND SALE, DETAILS OF SUNDRY CREDITO RS / DEBTORS, COPY OF VAT AND CST RETURN, THE ASSESSEE FAILED TO FURNISH ANY OTHER CORROBORATIVE EVIDENCE , SUCH AS , STOCK REGISTER, TRANSPORTATION DOCUMENT, DELIVERY CHALLAN, ETC. TO PROVE THE GENUINENESS OF PURCHASES. ACCORDINGLY, HE TREATED THE PURCHASES OF ` 11,66,082, AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE AFORESAID ADDITION MADE BY THE ASSESSING OFFICER WAS ALSO SUSTAINED BY LEARNED FIRST APPELLATE AUTHORITY. 6 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED PURCHASE BILLS, PAYMENT DETAILS, QUANTITATIVE TALLY OF PURCHASES, CONSUMPTION AND SALES WITH PARTY WISE DETAILS. HE SUBMITTED , THE ASSESSING OFFICER HAS NOT DISPUTED THE CONSUMPTION OF RAW MATERIALS AND SAL E OF FINISHED PRODUCTS. IN SUCH CIRCUMSTANCES, DISALLOWANCE OF ENTIRE PURCHASES IS IMPROPER. HE SUBMITTED , AT THE BEST THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR ADDITION. 4 NANDANI ANUP SURVE 7 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS). 8 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE FACTS ON RECORD REVEAL THAT BEFORE THE DEPARTMENTAL AUTHORITIES, THE ASSESSEE HAS NOT BEEN ABLE TO C ONCLUSIVELY PROVE GENUINENESS OF PURCHASES . EVEN, ATTEMPT MADE BY THE ASSESSING OFFICER TO INDEPENDENTLY VERIFY THE PURCHASES BORE NO RESULT. IN SUCH CIRCUMSTANCES, ASSESSEES CLAIM OF PURCHASES MADE BEING GENUINE CANNOT BE ACCEPTED. HOWE VER, THE FACT THAT THE ASSESSEE HAD FURNISHED QUANTITATIVE DETAILS RELATING TO PURCHASE , CONSUMPTION AND SALE OF GOODS CANNOT BE COMPLETELY OVERLOOKED. THUS, A REASONABLE PRESUMPTION CAN BE DRAWN THAT THE ASSESSEE MAY NOT HAVE PURCHASED THE GOODS FROM THE DECLARED SOURCE BUT HAS PURCHASED THEM FROM THIRD PARTIES AND FOR REGULARIZING SUCH PURCHASES H AS OBTAINED ACCOMMODATION BILLS. IN SUCH CIRCUMSTANCES, THE ENTIRE PURCHASES MADE BY THE ASSESSEE CANNOT BE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESS EE. RATHER , IT WOULD BE REASONABLE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES AND CONSIDE R IT FOR ADDITION. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT ADDITION @ 12.5% OF THE NON GENUINE PURCHASES WOULD 5 NANDANI ANUP SURVE BE REA SONABLE. ACCORDINGLY, I DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 12.5% OF ` 11,66,082. 9 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 20.09.2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 20.09.2019 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 6 NANDANI ANUP SURVE DATE INITIAL 1. DRAFT DICTATED ON 06 .0 9 .2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 0 9 .09.2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 20 .0 9 .2019 SR.PS 6. DATE OF PRONOUNCEMENT 20 .0 9 .2019 SR.PS 7. FILE SENT TO THE BENCH CLERK 23 .0 9 .2019 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER