ACIT- 26 (2), MUMBAI V. PRADIP AMRATLAL THAKKAR, MUMBAI

ITA 7050/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0328 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMARPADMAPANI BOHRA
• Assessee Lawyers: SANJAY SHAH
• Section: 133(6); 143(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. 7050 / MUM . /201 8 ( ASSESSMENT YEAR : 20 11 12 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 26(2), MUMBAI . APPELLANT V/S PRADIP AMRI TLAL THAKKAR 170/6, SHIV SMRUTI, 24 TH ROAD SION, MUMBAI 400 022 PAN AACPT2190C . RESPONDENT REVENUE BY : SHRI KUMAR PADMAPANI BO HRA ASSESSEE BY : SHRI SANJAY SHAH DATE OF HEARING 1 9 . 12 .2019 DATE OF ORDER 30.12.2019 O R D E R PER SAKTIJIT DEY. J.M. A FORESAID APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 8 TH JUNE 2018, PASSED BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) 38 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 11 12 . 2 PRADIP AMRITLAL THAKKAR 2. DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN REDUCING THE DISALLOWANCE TO 25% OF THE NON GENUINE PURCHASE. 3. BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , IS ENGAGED I N THE BUSINESS OF MANUFACTURE AND SALE O F RESINS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 28 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 83,74,153. INITIALLY, T HE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHOR T 'THE ACT' ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI, AND THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH ` 2,11,916, CLAIMED TO HAVE BEEN MADE BY THE A SSESSEE FROM NISHIL TRADING CO. DURIN G THE YEAR UNDER CONSIDERATION IS NON GENUINE AS THE CONCERNED SELLING DEALER HAS BEEN IDENTIFIED AS A HAWALA OPERATOR PROVIDING ACCOMMODATION BILLS, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDE R SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES. FURTHER, HE ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALERS SEEKING INFORMATION ON THE PURCHASES SHOWN BY THE ASSESSEE. ALLEGING THAT TH E ASSESSEE WAS UNABLE TO PR OVE THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER TREATED THE PURCHASE OF ` 2,11,916, AS BOGUS AND ADDED BACK TO THE 3 PRADIP AMRITLAL THAKKAR INCOME OF THE ASSESSEE. CHALLENGING THE AFORESAID ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. WE HAVE HEARD THE PARTIES AND PERUSED MATERIAL AVAILABLE ON RECORD. THOUGH , IT MAY BE A FACT THAT THE ASSESSEE WAS UNABLE TO PROVE THE PURCHASES MADE FROM THE DECLARED SOURCE THROUGH C LINCHING EVIDENCES, HOWEVER, LEARNED COMMISSIONER (APPEALS) HAS RECOR DED A CATEGORICAL FINDING OF FACT THAT THE ASSESSEE HAD FURNISHED STATEMENT OF STOCK PURCHASED AND CONSUMED, QUANTITATIVE STATEMENT OF FINISHED PRODUCTS, SALES EFFECTED AND THE FACT THAT ALL THESE TRANSACTIONS HAVE NOT ONLY BEEN RECORDED IN THE BOOKS OF ACCOUNT BUT REFLECTED IN THE AUDITED FINANCIAL STATEMENTS. NOTHING ADVERSE HAS BEEN FOUND EITHER IN THE BOOKS OF ACCOUNT OR THE FINANCIAL STATEMENTS. THE DOUBT IS ONLY WITH REGARD TO THE SOURCE OF PUR CHASES. THUS, IN SUCH SITUATIO N THE PRESUMPTION WOULD BE, THE ASSESSEE MIGHT HAVE PURCHASED THE GOODS FROM THE GREY MARKET AND TO REGULARIZE SUCH TRANSACTIONS HAS AVAILED ACCOMMODATION BILLS. IN THESE CIRCUMSTANCES, ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH UNPROVED PURCHASES CAN BE CON SIDE RED FOR ADDITION. THEREFORE, THE DECISION OF LEARNED COMMISS IONER (APPEALS) TO RESTRICT THE DISALLOWANCE TO 25% OF THE NON GENUINE PURCHASES , IN OUR CONSIDERED OPINION, IS MORE THAN REASONABLE AND MEET S THE ENDS OF JUSTICE. ACCORDINGLY, WE UPHOLD THE D ECIS ION OF LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUND IS DISMISSED. 4 PRADIP AMRITLAL THAKKAR 5. IN THE RESULT, APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 30.12.2019 SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMB AI, 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