ITO 17 (3)(1), MUMBAI V. LATE SHRI RAJESH S. MEHTA(THROUG LEGAL HEIR MS.MANSI P. MEHTA), MUMBAI

ITA 6298/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6465 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 6298 / MUM . /201 8 ( ASSESSMENT YEAR : 20 11 12 ) INCOME TAX OFFICER WARD 1 7 ( 3 ) ( 1 ) , MUMBAI . APPELLANT V/S LATE SHRI RAJESH S . MEHTA THROUGH LEGAL HEIR MS. MANSI P. MEHTA SOMJI BUILDING, 198, NORTH BROOK STREET MUMBAI 400 003 PAN AIGPM4374H . RESPONDENT REVENUE BY : SMT. JOTHILAKSHMI NAYAK ASSESSEE BY : NONE DATE OF HEARING 09 .01.2020 DATE OF ORDER 05.02.2020 O R D E R PER SAKTIJIT DEY. J.M. THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 6 TH AUGUST 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 28, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2011 12. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION ON ACCOUNT OF NON GENUINE PURCHASES TO 3% OF SUCH PURCHASES AS AGAINST THE DISALLOWANCE OF 5% MADE BY THE ASSESSING OFFICER. 2 LATE SHRI RAJESH S. MEHTA 3. BRIEF FACTS ARE, THE ASSESSEE, SINCE DECEASED, WAS CARR YING ON BUSINESS OF TRADING IN IRON & S TEEL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 17 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 2,80,350. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERN MENT OF MAHARASHTRA, THROUGH THE OFFICE OF THE DGIT (INV.), MUMBAI, THE ASSESSING OFFICER FOUND THAT PURCHASES WORTH ` 2,59,01,731, CLAIMED TO HAVE BEEN MAD E DURING THE YEAR FROM CERTAIN ENTITIES ARE NON GENUINE. ACCORDINGLY, HE RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEES LEGAL HEIR TO FURNISH DOCUMENTARY EVIDENCE T O PROVE THE PURCHASES. AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEES REPRESENTATIVE FURNISHED LEDGER ACCOUNT OF SELLING DEALERS, PU RCHASE BILLS, PAYMENT DETAILS THROUGH BANKING CHANNEL, ETC. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE AND ULTIMATELY CONCLUDED THAT THE PURCHASES ARE NON GENUINE. HOWEVER, CONSIDERING THE FACT THAT THE ASSESSEE HAS ENTERED THE PURCHASES IN HIS BOOKS OF ACCOUNT AND CORRESPONDING SALES HAVE BEEN MADE, HE ESTIMATED THE PROFIT ELEMENT EMBEDDED IN SUCH NON GENUINE PURCHASES @ 5% AND ADDED BACK AN AMOUNT OF ` 12,95,087. BEING AGGRIEVED WITH SUCH ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 LATE SHRI RAJESH S. MEHTA 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 3% OF THE NON GENUINE PURCHASES. 5. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION BY THE ASSESSEE SEEKING ADJO URNMENT EITHER. THEREFORE, 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. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. THOUGH , THE ASSESSING OFFICER HAS TREATED THE PURCHASES TO BE NON GENUINE, HOWEVER, ULTIMATELY HE HAS RESTRICTED THE ADDITION ON ACCOUNT OF SUCH NON GENUINE PURCHASES TO THE PROFIT ELEMENT EMBE DDED THEREIN BY ESTIMATING IT A T 5%. WHEREAS, LEARNED COMMISSIONER (APPEALS) HAS REDUCED THE PROFIT RATE TO 3%. THUS, AS COULD BE SEEN, THE DISPUTE IN THE PRESENT APPEAL IS WITH REGARD TO THE APPROPRIATE PROFIT RATE WHICH CAN BE CONSIDERED FOR ADDITION. AFTER CONSIDERING THE NATURE OF B USINESS CARRIED ON BY THE ASSESSEE AND OTHER RELEVANT FACTS, WE ARE OF THE CONSIDERED OPINION THAT LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO 3% OF THE NON GENUINE PURCHASES. ACCORDINGLY, UPHOLDING 4 LATE SHRI RAJESH S. MEHTA THE ORDER OF LEARNED COM MISSIONER (APPEALS), WE DISMISS THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 05.02.2020 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMB AI, DATED: 05.02.2020 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