ITO-28(1)(1), Mumbai V. M/S AMEYA INDUSTRIES , Mumbai

ITA 675/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2880 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 675 / MUM . /201 9 ( ASSESSMENT YEAR : 20 10 11 ) INCOME TAX OFFICER WARD 28(1)(1), MUMBAI . APPELLANT V/S M/S. AMEYA INDUSTRIES A 141, MIDC PLOT TTC INDUSTRIAL AREA KHAIRANE THANE BELAPUR ROAD NAVI MUMBAI 400 709 PAN AADFA1720C . RESPONDENT REVENUE BY : SHRI ASHISH KUMAR ASSESSEE BY : NONE DATE OF HEARING 30.01.2020 DATE OF ORDER 13.03.2020 O R D E R PER SAKTIJIT DEY. J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 20 TH NOVEMBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 26, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010 11. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY L EARNED COMMISSIONER (APPEALS) WHILE RESTRICTING THE ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES TO 12.5%. 2 M/S. AMEYA INDUSTRIES 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NONE APPEARED ON BEHALF OF THE A SSESSEE DESPITE ISSUANCE OF NOTICE. THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. THUS, FROM THE AFORESAID FACTS IT IS CLEAR THAT THE ASSESSEE IS NEITHER DILIGENT NOR INTERESTED IN PURSUING TH E PRESENT APPEAL. ACCORDINGLY, WE PROCEED TO DISPOSE OFF T HE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN PRINTING BUSINESS. FOR THE ASSESSMENT YEAR UNDER DISPUT E, THE ASSESSEE FILED ITS RETURN OF INCOME ON 21 ST SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 3,24,110. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT. 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 ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN ENTITIES IDENTIFIED AS HAWALA OPERATOR S , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASE S WORTH ` 27,38,498, CLAIMED TO HAVE B EEN MADE DURING THE YEAR FROM TEN PARTIES. FURTHER, TO I NDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT TO THE 3 M/S. AMEYA INDUSTRIES CONCERNED PARTIES. AS ALLEGED BY THE ASSESSING OFFICER , ALL SUCH NOTICE S RETURNED BACK UN SERVED WITH THE REMARK LEFT . FURT HER, ON VERIFICATION OF THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER DID NOT FIND THEM CONVINCING. ACCORDINGLY, HE WAS OF THE VIEW THAT THE PURCHASES OF ` 27,38,498, ARE NON GENUINE. HOWEVER, HOLDING THAT THE ASSESSEE HAS INFLATED THE PUR CHASE PRICE AND THEREBY HAS REDUCED THE PROFIT WHILE BUYING FROM UNDISCLOSED SOURCES, THE ASSESSING OFFICER DISALLOWED 25% OUT OF THE NON GENUINE PURCHASES TO MAKE THE ADDITION OF ` 6,24,625. THE ASSESSEE CONTESTED THE AFORESAID ADDITION BEFORE THE FIRST A PPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF THE F ACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) REDUCED THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASES. 6. WE HAVE C ONSIDERED THE SUBMISSIONS O F LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. THOUGH, IT MAY BE A FACT THAT THE ASSESSEE WA S UNABLE TO CONCLUSIVELY PROVE THE SOURCE OF THE DISPUTED PURCHASES, HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFICER HAS ACCEP TED THAT THE ASSESSEE HAS EFFECTED THE PURCHASES , THOUGH , FROM UN KNOWN SOURCE. FOR THIS REASON ALONE, THE ASSESSING OFFICER HAS NOT DISALLOWED THE ENTIRE PURCHASES, BUT HAS MADE DISALLOWANCE OF 25% OUT OF SUCH PURCHASES , WHICH HAS BEEN 4 M/S. AMEYA INDUSTRIES REDUCED TO 12.5% BY LEARNED COMMISSIONER (APPEALS). THUS, ULTIMATELY, THE DISPUTE BETWEEN THE PARTIES NARROWS DOWN TO THE REASONABLE PROFIT RATE WHICH CAN BE APPLIED FOR MAKING THE DISALLOWANCE. AFTER CONSIDERING THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE AND ALL OTHE R RELEVANT FACTS, WE ARE OF THE CONS IDERED OPINION THAT LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASE. GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 13.03.2020 SD/ - G. MANJUNATHA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2020 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