ITO - 27 (1)(4), MUMBAI V. MOHD. ISMAIL SHAIKH, MUMBAI

ITA 6312/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8199 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Accommodation entries
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER I.T.A. NOS. 6312/MUM/2018 ASSESSMENT YEARS : 2011-12 ITO 27(1)(4) TOWER NO. 6, 4 TH FLOOR, ROOM NO. 409, VASHI RLY STN COMPLEX, VASHI, NAVI MUMBAI. / VS. MD. ISMAIL SHAIKH, CEN 113, SHASHTRI NAGAR, BAINGANWADI, GOVANDI, MUMBAI. ./ ./ PAN/GIR NO. : BAVPS2697K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SMT. JOTHILAKSHMI NAYAK / RESPONDENT BY : NONE / DATE OF HEARING 09.01.2020 !'# / DATE OF PRONOUNCEMENT .01.2020 / O R D E R PER SAKTIJIT DEY,JM: 1. THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 16.08.2018 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-25, MUMBAI, FOR THE ASSESSMENT YEAR 2011-12. THE DISPUTE IN THE APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON-GENUINE PURCHASES. ITA NO S. 6312/MUM/2018 MD. ISMAIL SHAIKH, MUMBAI. - 2 - 2. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF MANUFACTURING AND RESELLING OF FOOTWEAR THROUGH HIS PROPRIETARY CONCERN M/S. PLUS FOOT. FOR THE ASSESSMENT YEAR UNDER DISPUTE ASSESSEE FILED HIS RETURN OF INCOME ON 21.09.2011 DECLARING TOTAL INCOME OF RS. 5,24,177/-. SUBSEQUENTLY, ON THE BAS IS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA THROUGH THE INVESTIGATION WING OF THE DEPARTMENT INDICATING THA T THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILL S PROVIDED BY REMY SALES CORPORATION FOR AN AMOUNT OF RS. 4,20,000/-, WHICH IS IDENTIFIED AS A HAWALA OPERATOR, THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961. IN COURSE OF ASSESSMENT PROCEEDING THE ASSESSING OFFIC ER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS O F THE PURCHASE WORTH RS. 4,20,000/- CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM REMY SALES CORPORATION BY FURNISHING SUPPORTING EVIDENCES. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFIC ER, THOUGH, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCES TO PROVE THE PURCHASES, HOWEVER, THE ITA NO S. 6312/MUM/2018 MD. ISMAIL SHAIKH, MUMBAI. - 3 - ASSESSING OFFICER WAS NOT SATISFIED WITH THEM. AS ALLEGED BY THE ASSESSING OFFICER, ASSESSEE WAS UNAB LE TO FURNISH ANY EVIDENCE TO SHOW ACTUAL DELIVERY OF GOODS AT HIS PREMISES. FURTHER, THE ASSESSING OFFI CER OBSERVED, NOTICES ISSUED U/S 133(6) OF THE INCOME T AX ACT, 1961 TO THE SELLING DEALER ALSO RETURNED BACK UN- SERVED. IN VIEW OF THE ABOVE, THE ASSESSING OFFICE R CONCLUDED THAT THE PURCHASES WORTH RS. 4,20,000/- ARE NON-GENUINE. FURTHER, HE OBSERVED, TO INFLATE HIS PURCHASES AND SUPPRESS THE PROFIT THE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES. ON THE BASIS OF AFORESAID REASONING THE ASSESSING OFFICER ADDED BAC K ENTIRE AMOUNT OF RS. 4,20,000/- TO THE INCOME OF TH E ASSESSEE. ASSESSEE CONTESTED THE AFORESAID ADDITIO N BEFORE THE FIRST APPELLATE AUTHORITY. AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF F ACTS AND MATERIALS ON RECORD LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ADDITION TO 12.5% OF THE N ON- GENUINE PURCHASES. 3. WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENTED ON BEHALF OF THE ASSESSEE TO REPRESEN T THE CASE. EVEN, THE ASSESSEE HAS NOT FILED ANY ITA NO S. 6312/MUM/2018 MD. ISMAIL SHAIKH, MUMBAI. - 4 - APPLICATION SEEKING ADJOURNMENT. CONSIDERING THE ABOVE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILAB LE ON RECORD. 4. HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT, THOUGH, THE ASSESSING OFFICER ON THE BASIS OF HIS OWN REASONING HAS HELD THE PURCHASES WORTH OF RS. 4,20,000/- AS NON-GENUINE AND HAS ADDED BACK TO THE INCOME OF THE ASSESSEE. HOWEVER, HE HAS NOT DISPUTED THE SALES EFFECTED BY THE ASSESSEE. IT IS COMMON KNOWLEDGE, IN ABSENCE OF THE PURCHASES (RAW MATERIAL) THE ASSESSE E COULD NOT HAVE EFFECTED THE SALES. THUS, IT HAS TO BE ASSUMED THAT THE ASSESSEE MUST HAVE PURCHASED THE GOODS FROM UN-DECLARED SOURCES AND TO REGULARIZE SUCH PURCHASES HAS AVAILED ACCOMMODATION BILLS. CONSIDERING THE AFORESAID ASPECT, LEARNED COMMISSIONER (APPEALS) HAS HELD THAT IN SUCH CIRCUMSTANCES THE ENTIRE PURCHASES CANNOT BE DISALLOWED BUT THE DISALLOWANCE CAN BE RESTRICTED T O THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. ITA NO S. 6312/MUM/2018 MD. ISMAIL SHAIKH, MUMBAI. - 5 - ACCORDINGLY, HE HAS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON-GENUINE PURCHASES. IN OUR VIEW, THE AFORESAID DECISION OF LEARNED COMMISSIONE R (APPEALS) IS MOST REASONABLE AND APPROPRIATE KEEPIN G IN VIEW THE RELEVANT FACTS AVAILABLE ON RECORD. ACCORDINGLY, THE ORDER OF LEARNED COMMISSIONER (APPEALS) ON THE DISPUTED ISSUES IS UPHELD BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 22.01. 2020 SD/- SD/- (RAJESH KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 22.01.2020 KRK, PS