ITO 28 (2)(3), MUMBAI V. NATHU DAGDU DAHIBHATE, MUMBAI

ITA 6216/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5247 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THARIAN OOMMEN
• Keywords: Corroborative evidences
• Section: 133(6); 201; 147

Judgement Text

1 I.T.A. NO.6216/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR (VICE PRESIDENT) AND SHRI SAKTIJIT DEY (JUDICIAL MEMBER) I.T.A. NO. 6216 /MUM/201 9 (ASSESSMENT YEAR 20 1 1 - 1 2 ) ITO - 28(2)(3), MUMBAI VS NATHU DAGDU DAHIBHATE A - 303, MAA ANNAPURNA CHS SECTOR - 2, AIROLI, NAVI MUMBAI PAN : A ERPD6502R APPELLANT RESPONDENT APPELLANT BY SHRI THARIAN OOMMEN , SR D R RESPONDENT BY NONE DATE OF HEARING 30 - 0 3 - 2021 DATE OF PRONOUNCEMENT 0 3 - 0 5 - 2021 O R D E R PER SAKTIJIT DEY (JM): THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 2 6 - 0 7 - 201 9 OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 26 , MUMBAI FOR THE ASSESSMENT YEAR 201 1 - 1 2 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT FOR THE ASSESSEE. CONSIDERING THE NATU RE OF DISPUTE, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE, AFTER HEARING THE LEARNED D EPARTMENTAL R EPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2 I.T.A. NO.6216/MUM/2019 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE PARTIAL RELIEF G RANTED BY THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON - GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL AND IS STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF CONTROL PANEL S THROUGH HIS PROPRIET A RY CONCERN, M/S CLASSIC ELECTRICALS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE HAD FILED HIS RETURN OF INCOME ON 30 - 09 - 2011 DECLARING TOTAL INCOME OF RS.3,05,660/ - . SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE S ALES - TAX D EPARTMENT,GOVERNMENT OF MAHARASHTRA THROUG H THE DGIT (INV), MUMBAI THAT PURCHASES WORTH RS.20,48,435/ - CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM FOUR PARTIES A RE NON - GENUINE , AS , THE CONCERNED SELLING DEALERS WERE IDENTIFIED AS HAWALA OPERATORS PROVIDING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMATION, ASSESSING OFFICER REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE INCOME TAX ACT , 1961 . IN COURSE OF ASS ESSMENT PROCEEDINGS, ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION S THROUGH SUPPORTING EVIDENCE. IN RESPONSE TO THE QUERY MADE, THE ASSESSE E FURNISHED AUDITED FINANCIAL STATEMENT, LEDGER COPIES OF THE CONCERNED SELL ING DEALER,ETC. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, THE ASSESSEE DID NOT SUBMIT DETAILS OF GOODS PURCHASED, STOCK REGISTER , SALES REGISTER, BANK ACCOUNT STATEMENTS, ETC. FURTHER, AS OBSERVED BY THE ASSESSING OFFICER, NOTICES ISSUED U NDER SECTION 133(6) OF THE ACT TO THE CONCERNED SELLING DEALERS RETURNED BACK UNSERVED. THUS, ULTIMATELY, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES ARE NON - GENUINE AND ACCORDINGLY, ADDED BACK TO THE INCOME OF THE ASSESSEE. ASSESSEE CONTESTED THE AFORESAID ADD ITION BEFORE THE FIRST APPELLATE AUTHORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND 3 I.T.A. NO.6216/MUM/2019 MATERIALS ON RECORD, L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PUR CHASES. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIALS ON RECORD. AS RIGHTLY OBSERVED BY L EARNED COMMISSIONER OF INCOME - TAX (APPEALS), THE SALES SHOWN BY THE ASSESSEE HAVE NOT BEEN DOUBTED BY THE ASSESSIN G OFFICER. THAT BEING THE CASE, THE LOGICAL CONCLUSION WOULD BE, IN ABSENCE OF THE DISPUTED PURCHASES CORRESPONDING SALES COULD NOT HAVE BEEN MADE. THEREFORE, THE DOUBT, IF ANY, IS ONLY WITH REGARD TO THE SOURCE OF PURCHASES . I N THE AFORESAID SCENARIO, IT CAN BE CONCLUDED THAT THE ASSESSEE MIGHT HAVE PURCHASED THE GOODS FROM UNVERIFIED SOURCES , THEREBY , SUPPRESSING ITS TRUE PROFITS. IN SUCH CIRCUMSTANCES, ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH UNVERIFIED PURCHASES CAN BE CONSIDERED FOR ADDITION. IN THE IN STANT CASE, L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS EXACTLY DONE SO. INSOFAR AS ESTIMATION OF PROFIT ELEMENT AT 12.5%, IN OUR VIEW, IT IS FAIR AND REASONABLE AND IS IN CONFORMITY WITH THE DECISION S OF THE HIGHER APPELLATE AUTHORITIES INCLUDING TRI BUNAL IN SIMILAR MATTER S . 6. IN VIEW OF THE AFORESAID, WE UPHOLD THE DECISION OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) ON THE ISSUE. GROUNDS RAISED ARE ALLOWED. 9. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED ON 0 3 /0 5 /2021. S D / - S D / - ( PRAMOD KUMAR ) ( SAKTIJIT DEY ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DT : 0 3 /0 5 /2021 PAVANAN 4 I.T.A. NO.6216/MUM/2019 COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI