ITO 17(2)(1), MUMBAI V. JITESH F. JAIN, MUMBAI

ITA 7437/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8871 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHUPATHI
• Assessee Lawyers: JITESH F JAIN
• Section: 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 7437 / MUM . /201 8 ( ASSESSMENT YEAR : 20 09 10 ) INCOME TAX OFFICER WARD 17(2)(1), MUMBAI . APPELLANT V/S JITESH F. JAIN C/O JAIN STEEL TUBE 301/302, SHANTI GARDEN SECTOR III, MIRA ROAD THANE 401 107 PAN:AAFPJ2084G . RESPONDENT REVENUE BY : SHRI R. BHUPATHI ASSESSEE BY : SHRI JITESH F. JAIN DATE OF HEARING 06.01.2020 DATE OF ORDER 15.01.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 25 TH OCTOBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 57 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 09 10. 2. T HE GRIEVANCE OF THE REVENUE IN THE PRESENT AP PEAL IS WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE 2 JITESH F. JAIN DISALLOWANCE ON ACCOUNT OF NON GENUINE PURCHASES TO 8% AS AGAINST 12.5% MADE BY THE ASSESSING OFFICER. 3. BRIEF FACTS ARE, THE ASSESSEE AN INDIVIDUAL, CARRIES ON BUSINESS IN TRADING IN IRON AND STEEL GOODS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 30 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 1,46,830. INITIALLY, THE RETURN OF INCOME FILE D BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS RECEIVED FROM CERTAIN HAWALA OPE RATOR S , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), AND THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE ASSESSING OFFICE R CALLED UPON THE ASSESSEE TO PROVE THE G ENUINENESS OF PURCHASES SHOWN OF ` 85,96,910. AS OBSERVED BY THE ASSESSING OFFICER, IN RESPONSE, THE ASSESSEE COULD ONLY FURNISH PURCHASE BILL S, PAYMENT DETAILS, ETC. THE ASSESSEE NEITHER COULD PRODUCE THE CONCERNED PARTIES NOR WAS ABLE TO PROVE THE DELIVERY OF GOODS BY FURNISHING TRANSPORTATION RECEIPTS AND DELIVERY CHALLAN. THUS, ULTIMATELY, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF PURCHASE MADE. ACCORDINGLY, HE TREATED S UCH PURCHASES AS NON GENU INE. HOWEVER, HE PROCEEDED TO 3 JITESH F. JAIN ADD THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASE BY ESTIMATING @ 12.5% WHICH WORKED OUT TO ` 10,74,614. THE ASSESSEE CONTESTED THE ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. L EARNED COMMISSIONER ( APPEALS) , AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, BEING OF THE VIEW THAT THE PROFIT RATE ESTIMATED @ 12.5% BY THE ASSESSING OFFICER IS ON THE HIGHER SIDE REDUCED IT TO 8%. 5. WE HAVE HEARD THE PARTIE S AND PERUSED THE MATERIAL ON RECORD. THOUGH , IT MAY BE A FACT THAT THE ASSESSEE COULD NOT CONCLUSIVELY PROVE THE SOURCE OF PURCHASE, HOWEVER, THE FACT THAT THE ASSESSEE HAD PURCHASED THE GOODS HAS BEEN ACCEPTED BY THE ASSESSING OFFICER THAT IS WHY HE HAS ESTIMATED THE PROFIT ELEMENT @ 12.5% AND CONSIDER ED IT FOR ADDITION. HOWEVER, LEARNED COMM ISSIONER (APPEALS) HAS REDUCED SUCH PROFIT ELEMENT TO 8% OF THE NON GENUINE PURCHASES. THE REFORE, THE DISPUTE BEFORE US BASICALLY HINGES UPON THE PROFIT RATE TO BE CONSIDERED FOR ADDITION. AFTER CONSIDERING THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE AS WELL AS OTHER RELEVANT FACTORS, WE ARE OF THE OPINION THAT ESTIMATION OF PROFIT @ 8% OF NON GENUINE PURCHASES AS DONE BY LEARNED COMMISSIONER (APPEALS) I S JUST AND REASONABLE, HENCE, DOES NOT REQUIRE ANY INTERFERENCE FROM US. ACCORDINGLY, GROUNDS ARE D ISMISSED. 4 JITESH F. JAIN 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 15.01.2020 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 15.01.2020 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