INCOME TAX OFFICER-26(1)(3), MUMBAI V. DATTATRAY NANDKISHOR JAGTAP, MUMBAI

ITA 6201/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9751 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Section: 133(6); 201; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 6201 /MUM/2019 ASSESSMENT Y EAR: 2009 - 10 ITA NO. 6202 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 & ITA NO. 6203 /MUM/2019 ASSESSMENT Y EAR: 2011 - 12 INCOME TAX OFFICER - 26(1)(3), ROOM NO. 305, 3 RD FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 VS. SHRI DATTATRAY NANDKISHOR JAGTAP, FLAT NO. 103, LOTUS CHS, SECTOR NO. 20C, AIROLI, NAVI MUMBAI - 400708 PAN: AFOPJ0800J (APPELLANT) (RESPONDENT) REVENUE BY : MS. SMITA VERMA (DR) ASSESSEE BY : NONE DATE OF HEARING : 30/06 /202 1 DA TE OF PRONOUNCEMENT: 20 / 0 7 /202 1 O R D E R PER SAKTIJIT DEY, JM CAPTIONED APPEALS BY THE REVENUE ARISE OUT OF THREE SEPARATE ORDER S, ALL DATED 31.01.2019 , OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) - 38 , MUMBAI FOR THE A SSESSMENT YEAR S 2009 - 10, 201 0 - 11 AND 2011 - 12. 2. IT IS OBSERVED , THE REGISTRY HAS NOTIFIED DELAY OF VARIOUS DATES IN FILING THE SE APPEALS. HOWEVER, THE ASSESSING OFFICER (AO) HAS FILED LETTER DATED 26.06.202 1 STATING THAT THE ORDERS OF LEARNED COMMISSIONER (APPEALS) WERE RECEIVED BY THE AUTHORITY CONCERNED ON 08.08.2019 AND APPEALS WERE FILED ON 30.09.2019. THUS, IT IS SUBMITTED , THERE IS NO DELAY IN FILING THE APPEALS. HAVING PERUSED THE FACTS ON RECORD, WE FIND THAT INSTEAD OF MENTIONING THE DATE OF REC EIPT OF ORDERS PASSED BY LEAR NED COMMISSIONER (APPEALS) , THE 2 ITA NO S . 6201 - 6203 / MUM/2019 ASSESSMENT YEAR S : 20 09 - 10, 2010 - 11 & 2011 - 12 APPELLANT HAS WRONGLY MENTIONED THE DATE OF COMMUNICATION OF THE A SSESSMENT ORDER IN COLUMN 3 OF MEMORANDUM OF A PPEAL IN FORM NO. 36. DUE TO THIS INADVERTENT MISTAKE, THE REGISTRY HAS POINTED OUT DELAY IN FILING THE APPEALS . HOWEVER, AFTER VERIFYING FACTS ON RECORD WE ARE CONVINCED THAT THERE IS NO DELAY IN FILING THE APPEALS. THEREFORE, THE APPEALS ARE ADM ITTED FOR ADJUDICATION ON MERIT . 3. THE COMMON DISPUTE ARISING FOR CONSIDERATION IN ALL THESE APPEALS IS CONCERNING P ART IAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF ALLEGED NON - GENUINE PURCHASES. 4 . BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. IN ALL THE ASSESSMENT YEARS IN DISPUTE, ASSESSEE HAD FILED HIS RETURN S OF INCOME IN REGULAR COURSE UNDER SECTION 139 (1) OF THE INCOME TAX ACT, 1961. SUBSEQUENTLY, THE AO RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THROUGH DGIT (INV.), MUMBAI THAT CERTAIN PURCHASES MADE BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEARS AR E NOT GENUINE AS THE CONCERNED SELLING DEALERS WERE FOUND TO BE PROVIDING ACCOMMODATION BILLS WITHOUT ACTUAL SALE TRANSACTION. BASED ON SUCH INFORMATION, THE AO REOPEN ED THE ASSESSMENT IN ALL THE ASSESSMENT YEARS UNDER DISPUTE. AS OBSERVED BY THE AO , IN RE SPONSE TO NOTICE ISSUED UNDER SECTION 142 (1) OF ACT, T HE ASSESSEE APPEARED AND FURNISHED SOME EVIDENCE S, SUCH AS , LEDGER ACCOUNT OF T HE SELLING DEALERS, BANK STATEMENT EVIDENCING PAYMENT MADE TO THE PARTIES, PURCHASES BILLS ETC. HOWEVER, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE TO PROVE DELIVERY OF GOODS AT ITS PREMISES. FURTHER, THE AO OBSERVED , NOTICE S ISSUED UNDER SECTION 133(6) OF THE ACT SEEKING INFORMATION FROM THE SELLING DEALERS , RETURNED BACK UN - SERVED. THUS, HE WAS OF TH E VIEW THAT THE PURCHASE ARE NON GENUINE . HOWEVER, CONSIDERING THE FACT THAT THE ASSESSEE HAD FURNISHED STATEMENT OF PURCHASES AND SALE TRANSACTIONS, T HE AO WAS OF THE VIEW THAT THE PROFIT ELEMENT EMBEDDED IN THE DOUBTFUL PURCHASES HAS TO BE DISALL OWED. THEREFORE, APPLYING THE GR OSS PROFIT RATE SHOWN BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEAR S , THE AO MADE DISALLOWANCE AS UNDER: - ASSESSMENT YEAR GP RATE AMOUNT DISALLOWED 2009 - 10 18.39% 27,579/ - 3 ITA NO S . 6201 - 6203 / MUM/2019 ASSESSMENT YEAR S : 20 09 - 10, 2010 - 11 & 2011 - 12 2010 - 11 19.84% 2,18,192/ - 2011 - 12 36.12% 9,56,177/ - 5 . CONTESTING THE AFORESAID DISALLOWANCES , ASSESSEE PREFERRED APPEALS BEFORE LEARNED COMMISSIONER (APPEALS). PARTLY ACCEPTING THE SUBMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO 12.5% IN ALL THE YEARS UNDER APPEAL. 6 . WHEN THE APPEALS WERE TAKEN UP FOR HEARING, NO ONE APPEARED FOR THE ASSESSEE TO REPRESENT THE CASE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DIS POSE OF THE APPEALS EX - PARTE QUA TH E ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND BASED ON MATERIALS ON RECORD. 7 . WE HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS ON RECORD. THOUGH, BASED ON CERTAIN INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, THE AO HAS TREATED CERT AIN PURCHASES TO BE NON - GENUINE, H OW EVE R, ULTIMATELY HE HAS RESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY APPLYING THE GROSS PROFIT RATE SHOWN BY IN THE RESPECTIVE ASSESSMENT YEARS. THUS, THE AFORESAID FACT REVEALS THAT THE AO WAS CONVINCED THAT THE ASSESSEE HAD PURCHASED THE GOODS , THOUGH , FROM UNVERIFIED SOURCES. LEARNED COMMISSIONER (APPEALS) HAVING FOUND THE PROFIT RATE ADOPTED BY THE AO HIGH AND EXCESSIVE HAS REDUCED THE DISALLOWANCE TO 12.5%. THUS, ULTIMATELY , THE DISPUTE BOILS DOWN TO THE REASONABLE PR OFIT RATE WHICH CAN BE CONSIDERED FOR DISALLOWANCE. AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSE E , WE ARE OF T HE VIEW THAT THE DECISION OF LEARNED COMMISSIONER (APPEALS) TO RESTRICT THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES , BEING IN CONFO RMITY WITH VARIOUS DECISIONS OF THE TRIBUNAL AND HIGHER COURTS IN SIMILAR NATURE OF CASES , DESERVES TO BE UPHELD. ACCORDINGLY, WE DO SO. GROUNDS ARE DISMISSED. 8 . IN THE RESULT, APPEALS ARE DISMISSED. 4 ITA NO S . 6201 - 6203 / MUM/2019 ASSESSMENT YEAR S : 20 09 - 10, 2010 - 11 & 2011 - 12 ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY , 2021 . SD/ - SD/ - ( RAJESH KUMAR ) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 20 / 07 /202 1 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI