ITO 17 (1)(4), MUMBAI V. DHAVAL & COMPANY, MUMBAI

ITA 6428/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8785 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMAL MANGAL
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO.6428/MUM./2018 ( ASSESSMENT YEAR : 2009 10 ) INCOME TAX OFFICER WARD 17(1)(4), MUMBAI . APPELLANT V/S DHAVAL & COMPANY 19, 201, NAGDEVI STREET 2 ND FLOOR, MUMBAI 400 003 PAN AAAFC1095L . RESPONDENT REVENUE BY : SHRI KAMAL MANGAL ASSESSEE BY : NONE DATE OF HEARING 13.01.2020 DATE OF ORDER 17.01.2020 O R D E R PER SAKTIJIT DEY, J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 31 ST OCTOBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 52, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2011 12. 2. THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL IS WITH REGARD TO PART REDUCTION OF THE ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 2 3. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN THE BUSINESS OF TRADING IN METAL ITEMS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE F ILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 62,846. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THROUGH THE OFFICE OF THE DGIT (INV.), MUMBAI, THAT THE ASSES SEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN SUSPICIOUS DEALERS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES WORTH ` 30,79,448, CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM THREE PARTIES. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES WHICH WERE NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT. HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER, ALL SUCH NOTICES RETURNED BACK UN SERVED. IN VIEW OF THE AFORESAID, THE ASSESSING OFFICER HELD THAT THE PURCHASES CLAIMED TO HAVE BEEN MADE ARE NOT GENUINE AND IN REALITY, THE ASSESSEE HAS PURCHASED SUCH GOODS FROM GREY MARKET AND TO REGULARIZE SUCH PURCHASES HAS OBTAINED ACCOMMODATION BILLS. ACCORDINGLY, AFTER REJECTING THE BOOKS OF ACCOUNT O F THE ASSESSEE UNDER SECTION 14 5(3), 3 THE ASSESSING OFFICER ESTIMATED THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURCHASES @ 12.5% AND ADDED BACK THE AMOUNT OF ` 3,84,936. THE ASSESSEE CH ALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF F ACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW SET OFF OF GROSS PROFIT ALREADY SHOWN BY THE ASSESSEE AGAINST THE PROFIT ESTIMATED @ 12.5%. 5. WHEN THE APPEAL WAS CALLED FOR HEARING, NEITHER THE ASSESSEE NOR ANY ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION FILED BY THE ASSESSE E SEEKING ADJOURNMENT OF HEARING EITHER. IN SUCH CIRCUMSTANCES, WE CONSIDER IT APPROPRIATE TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSES SEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. WE HAVE H EARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT , IN THE C OURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED VARIOUS DOCUMENTARY EVIDENCES SUCH AS PURCHASE BILLS, LEDGER ACCOUNT COPIES, BANK STATEMENT, STOCK STATEMENT WITH QUANTITATIVE DETAILS OF PURCHASE AND CORRESPONDING SALES, SALES BILLS, ETC. THE ASSESSING OFFICER TREATED 4 THE PURCHASES AS NON GENUINE PRIMARILY FOR THE REASON THAT THE ASSESSEE COULD NOT FURNISH ANY DELIVERY CHALLAN AND TRANSPORT RECE IPT. FURTHER, NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT RETURNED BACK UN SERVED. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THAT THE DISPUTED PURCHASES HAVE BEEN MADE BY THE ASSESSEE , THOUGH , NOT FROM THE DECLARED SOURCE. FOR THIS REASON ALONE, THE AS SESSING OFFICER HAS ONLY ADDED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. WHEREAS, LEARNED COMMISSIONER (APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO SET OFF THE GROSS PROFIT ALREADY DECLARED AGAINST THE PROFIT ELEMENT ESTIMATED AT 12.5% . SINCE , THE ASSESSEE HAS ALREADY INCLUDED THE PURCHASES IN ITS ACCOUNT AND OFFER ED THE PROFIT DERIVED THERE F R OM IN NORMAL COURSE, IT HAS TO BE GIVEN SET OFF OF SUCH PROFIT DECLARED AGAINST THE PROFIT ESTIMATED ON THE ALLEGED NON GENUINE PURCHASES. IN OUR VIE W, THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS) IS JUST AND PROPER, HENCE, DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGL Y, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS). GROUND RAISED IS DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.01.2020 SD/ - M. BALAGANESH ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.01.2020 5 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