BASANT FUTERMAL JAIN, MUMBAI V. ITO 18(1)(2), MUMBAI

ITA 7433/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0717 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2016
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: N M PORWAL
• Keywords: Reopening of assessment; Bogus purchase; Reason to believe
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 7433 / MUM/20 1 6 ( ASSESSMENT YEAR : 2009 - 10 ) SHRI BASANT FUTERMAL JAIN 301, REWA VILLA, 3 RD FLOOR 31, DADI SETH AGIARY LANE KALBADEVI ROAD, MUMBAI 400 002 VS. ITO 18(1)(2), MUMBAI PAN/GIR NO. AACPJ5617N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI N.M.PORWAL REVENUE BY SHRI A.K.KARDAM DATE OF HEARING 09 / 05 /201 7 DATE OF PRONOUNCEME NT 16 / 05 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 29, MUMBAI DATED 21/09/2016 FOR THE A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.147 OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS A GGRIEVED FOR CONFIRMING THE ADDITION OF RS.2,99,134/ - MADE ON ACCOUNT OF PROFIT @ 10.11% ON ALLEGED NON - GENUINE PURCHASES OF RS.29,58,797/ - . 3. IT WAS ARGUED BY LEARNED AR THAT AO HAS MADE ADDITION OF 10.11% ON THE ALLEGED BOGUS PURCHASES OVER AND ABOVE TH E GROSS PROFIT DECLARED BY THE ASSESSEE AT 2.39%. ASSESSEE HAS ALSO ALLEGED REOPENING OF ASSESSMENT. BY THE IMPUGNED ORDER CIT(A) PARTLY CONFIRMED THE ACTION OF AO, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO. 7433/MUM/2016 SHRI BASANT FUTERMAL JAIN 2 4. I HAVE CONSIDERED RIVAL CONTENTIO NS. AS PER THE REASONS RECORDED FOR REOPENING, I AM SATISFIED THAT AO HAS CORRECTLY REOPENED THE ASSESSMENT IN SO FAR AS AO HAS REASON TO BELIEVE THAT THERE WAS ESCAPEMENT OF INCOME. DURING THE COURSE OF RE ASSESSMENT, AO FOUND THAT ASSESSEE HAS MADE BOGUS PURCHASES. ON SUCH PURCHASES, AO ADDED 12.5 %. 5. BY THE IMPUGNED ORDER CIT(A) RESTRICTED THE ADDITION TO 10.11%. FROM THE RECORD WE FOUND THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED / PRODUCED FOLLOWING DOCUMENTS AND MADE SUBMIS SION TO SUBSTANTIATE GENUINENESS OF PURCH ASES MADE FROM MLS LAHREE IMPEX. COPIES OF PURCHASES BILLS ISSUED BY M /S LAHREE IMPEX COPIES OF LEDGER ACCOUNT BANK STATEMENTS DULY AUTHENTICATED BY RESPECTIVE BANK TO SUBSTANTIATE THAT ALL PAYMENTS HAVE BEE N MADE BY PROPER BANKING CHANNEL BY CHEQUES DRAWN ON BANKS COPIES OF AUDIT REPORT AND AUDITED ACCOUNTS DULY AUDITED BY AUDITOR WHICH SHOWS THAT NO DISCREPANCY HAS BEEN NOTICED ON SUCH AUDIT AND ACCOUNTS ARE CORRECT AND COMPLETE. THE A SSESSEE PRODUCED BOOKS OF ACCOUNTS WHICH HAVE BEEN PROPERLY MAINTAINED AND NO DISCREPANCY HAS BEEN NOTICED EITHER BY THE AUDITOR OR BY THE ASSESSING OFFICER. CORRESPONDING SALES MADE HAVE ALSO BEEN EXPLAINED WHICH HAVE BEEN ACCEPTED BY THE LEARNED ASSESSING OFFICER AS NO FAULT HAS BEEN FOUND ON SUCH VERIFICATION . THE A SSESSEE PRODUCED QUANTITATIVE RECORDS WHICH INCORPORATE ALL THE PURCHASES AND SALES MADE BY A SSESSEE . THE ASSESSEE FURNISHED DEATH CERTIFICATE OF SHRI INDERMAL KASTURCHANDJI WHO IS KARTA OF HUF - PR OP OF MLS LAHREE IMPEX. THE A SSESSEE SHOWN HIS INABILITY TO PRODUCE SAID PARTY AS HE EXPIRED. THE ASSESSEE SUBMITTED ENOUGH EVIDE NCES WHICH WERE IN HIS POSSESSION WHICH ARE MENTIONED HEREINABOVE. BY FURNISHING SAID EVIDENCES PRIMARY ONUS CASTED UPON AP PELLANT HAS BEEN DISCHARGED AND NOW ONUS SHIFT UPON, THE ASSESSING OFFICER TO PROVE 'EITHER THESE DOCUMENTS ARE FALSE OR BRING COGENT MATERIAL ON RECORD TO PROVE OTHERWISE. THE LEARNED ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT THIS IS ASSESSMENT UNDER SECTION 148 OF THE ACT AND IT IS HIS ALLEGATION THAT ITA NO. 7433/MUM/2016 SHRI BASANT FUTERMAL JAIN 3 INCOME HAS ESCAPED ASSESSMENT. THEREFORE HE MUST PUT EVIDENCES ON RECORD AND PROVE THAT INCOME HAS ESCAPED. THE A SSESSEE CANNOT BE ASKED TO PROVE NEGATIVE. THUS THE PRIMARY ONUS CASTED UPON APP ELLANT HAS BEEN DISCHARGED AND NO PART OF IMPUGNED PURCHASES SHOULD BE TREATED AS BOGUS AND SHOULD NOT BE ADDED TO TOTAL INCOME OF THE ASSESSEE. 6. I FOUND THAT ASSESSEE HAS DEMONSTRATED SALE OF THE PURCHASES SO ALLEGED BY THE AO AS BOGUS. KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS VIS - - VIS OVER ALL FACTS AND CIRCUMSTANCES OF THE CASE, ADDITION OF 5% OF SUCH PURCHASES WILL SERVE THE END OF JUSTICE. ACCORDINGLY I DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF 5% OF SUCH PURCHASES. I DIRECT ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16 / 05 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 05 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//