ITO 27 (2)(5), MUMBAI V. PIYUSH D. GADA, MUMBAI

ITA 6831/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0326 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Section: 133(6); 143(1); 139(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 6831 & 6832 / MUM . /201 8 ( ASSESSMENT YEAR : 20 10 11 & 2009 10 ) INCOME TAX OFFICER WARD 27(2)(5), MUMBAI . APPELLANT V/S PIYUSH D. GADA FLAT NO.502, ANITA KUTIR CHS LTD. 90, FEET ROAD, GHATKOPAR (E) MUMBAI 400 075 PAN ABRPG2822J . RESPONDENT REVENUE BY : SHRI KUMAR PADMAPANI BORA ASSESSEE BY : NONE DATE OF HEARING 18 . 12 .2019 DATE OF ORDER 30.12.2019 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL S HAVE BEEN FILED BY THE REVENUE CHALLENGING TWO SEPARATE ORDERS , BOTH DATED 12 TH SEPTEMBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 25, MUMBAI, FOR THE ASSESSMENT YEAR S 2009 10 AND 2010 11. 2. T HE ONLY COMMON D ISPUTE IN BOTH THE APPEALS IS CONCERNING THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION ON ACCOUNT OF NON GENUINE PURCHASES TO 12.5%. 2 PIYUSH D. GADA 3. WHEN T HE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. EVEN, T HERE IS NO APPLI CATION FILED BY THE ASSESSEE SEEKING ADJOURNMENT EITHER. KEEPING IN VIEW THE AFORESAID FACT S , 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. 4. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED IN MANUFACTURE AND SALE OF CORRUGATED BOXES. FOR THE ASSESSMENT YEARS UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT IN THE REGULAR COURSE. THE RETURNS OF INCOME FILED WERE INITIALLY PROCESSED UNDER SECTI ON 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT (INV.), MUMBAI, AS WELL AS FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH ` 45,79,663, IN THE ASSESSMENT YEAR 2010 11 AND ` 36,19,3 06 IN THE ASSESSMENT YEAR 2009 10, ARE NON GENUINE AS THE PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE MADE SUCH PURCHASES HAVE BEEN IDENTIFIED AS HAWALA OPERATOR S BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES. FURTHER, THE ASSESSING OFFICER , TO 3 PIYUSH D. GADA INDEPENDENTLY VER IFY THE GENUINENESS OF PURCHASES , ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALER. SINCE , THE NOTICE ISSUED RETURNED BACK UNSERVED, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE LATEST ADDRESS OF THE SELLING DEALER. IN R ESPONSE TO THE FRESH NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT, THE CONCERNED SELLING DEALER S APPEARED BEFORE THE ASSESSING OFFICER AND FURNISH ED VARIOUS DETAILS TO SUPPORT THE SALES MADE BY THEM TO THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE EVIDENCES FURNISHED BY THE SELLING DEALERS AND PROCEEDED TO DISALLOW 12.5% OF THE DISPUTED PURCHASES IN BOTH THE ASSESSMENT YEARS. THE ASSESSEE CHALLENGED THE ADDITION S MADE BY FILING APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. 5. THE LEARNED CO MMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD HAVING FOUND THAT THE SELLING DEALERS HAVE APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRM ED THE SALES EFFECTED BY THEM , THE PURCHASES M ADE BY THE ASSESSEE CANNOT BE HELD AS BOGUS. ACCORDINGLY, HE DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER IN BOTH THE ASSESSMENT YEAR S . 6. WE HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. NO DOUBT, THE 4 PIYUSH D. GADA ASSESSING OF FICER HAS RE OPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT CERTAIN PURCHASES MADE BY THE ASSESSEE DURING THE YEARS UNDER CONSIDERATION ARE NON GENUINE. HOWEVER, AS COULD BE SEEN FROM T HE FACTS ON RECORD , IN THE COURSE OF ASSESSMENT PROCEEDINGS THE CONCERNED SELLING DEALERS NOT ONLY RESPONDED TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT BY THE ASSESSING OFFICER BUT HAVE FURNISHED THE FOLLOWING DETAILS: I) LEDGER ACCOUNT OF THE ASS ESSEE IN THEIR BOOKS; II) EXTRACT OF BANK STATEMENT HIGHLIGHTING SPECIFIC TRANSACTION WITH THE ASSESSEE; III) SALES BILL COPY AND DELIVERY CHALLAN; IV) SALES TAX CHALLAN AND RETURN; AND V) INCOME TAX RETURN WITH ALL ANNEXURES. 7. THUS, FROM THE AFORESAID DOCUMENTARY EVIDENCES FURNISHED BY THE SELLING DEALERS, IT IS EVIDENT THAT THE GOODS WERE NOT ONLY SOLD BUT WERE DELIVERED TO THE ASSESSEE. MERELY BECAUSE IN THE CASE OF SELLING DEALERS, A PART OF THEIR PURCHASES WERE DISALLOWED, IT CANNOT BE PRESUMED THAT THE SALES M ADE BY THEM TO THE ASSESSEE ARE ALSO NON GENUINE. THE VERY FACT THAT IN CASE OF SELLING DEALERS DISALLOWANCE S HAVE BEEN MADE @ 12.5% DEMONSTRATE THAT THEY HAVE ACTUALLY PURCHASED THE GOODS FOR RESALE TO THE ASSESSEE. THAT BEING THE CASE , THE SOURCE OF PURC HASES IN ASSESSEES HAND STAND PROVED. IN THE 5 PIYUSH D. GADA AFORESAID FACTUAL POSITION, WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER (APPEALS) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, GROUNDS RAISED ARE DISMISSED. 8. IN THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 30.12.2019 SD/ - S. RIFAUR RAHMAN A CCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 30.12.2019 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