ITO 17 (2)92), MUMBAI V. M/S LABDHI ENTERPRISES , MUMBAI

ITA 7564/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1757 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIDDRAMPA
• Keywords: Bogus purchase; Corroborative evidences
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY (J UDICIAL M EMBER ) ITA NO. 7564 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 INCOME TAX OFFICER 17(2)(2), ROOM NO. 114, 1 ST FLOOR, KAUTILYA BHAWAN, G - BLOCK, NEAR VIDESH BHAWAN, BKC, MUMBAI - 400051 VS. LABDHI ENTERPRISES, 45, LATIF HOUSE, 3 RD FLOOR, CARNAC BUNDER, MASJID MUMBAI - 400009 PAN: AACFL2346N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHIDDRAMPA (D R) ASSESSEE BY : SHRI MEHUL SHA H (A R ) DATE OF HEARING : 24 /05 /202 1 DATE OF PRONOUNCEMENT: 04 / 0 6 /202 1 O R D E R THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 24.10.2019 OF LEARNED COM MISSIONER OF INCOME TAX (APPEALS) 28 , MUMBAI FOR THE ASSESSM ENT YEAR 2010 - 11 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO P ARTNER RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS). THE MATTER OF ADDITION MADE ON ACCOUNT OF ALLEGED NON - GENUINE PURCHASES. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING IN IRON A ND STEEL, HARDWARE, TOOLS, PIPE FITTING S ETC. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 16.09.2010 DECLARING TOTAL INCOME OF RS. 5,61,680/ - . SUBSEQUENTLY, BASED ON THE INFORMATION RECEIVED FROM DGIT (INV.), MUMBAI AND SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, THE ASSESSING OFFICER (AO) HAVING FOUND THAT THE 2 ITA NO. 7564 / MUM/2019 ASSESSMENT YEAR: 2010 - 1 1 ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY CERTAIN HAWALA OPERATORS BY WAY OF NON GENUINE PURCHASES WORTH RS. 1,17,62,668/ - , REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES. IN RESPONSE , THE ASSESSEE FURNISHED SOME SUPPORTING EVIDENCES TO PROVE THE PURCHASES. HOWEVER, THE AO WAS NOT CONVINCED. ULTIMATELY, THE AO HELD THAT THE ASSESSEE HAS INTENTIONALLY INFLATED THE PURCHASES BY TAKING ACCOM MODATION ENTRIES TO REDUCE THE PROFIT ELEMENT . A FTER APPRECIATING ASSESSEES CONTENTION THAT THE ASSESSEE HAD SOLD THE GOODS REPRESENTING ALLEGED NON GENUINE PURCHASES , THE AO CONCLUDED THAT ONLY PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE ADDED TO TH E INCOME OF THE ASSESSEE. ACCORDINGLY, ESTIMATING PR OFIT ELEMENT ON THE ALLEGED NON GENUINE PURCHASES AT 12.5%, T HE AO DISALLOWED/ADDED BA CK AN AMOUNT OF RS. 21,32,833/ - . T HE ASSESSEE CONTESTED THE AFORESAID DISA LLOWANCE/ADDITION BEFORE LEARNED COMMISSIONE R (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD AND TAKING NOTE OF THE FACT THAT WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE, THE TRIBUNAL HAS RESTRICTED THE DISALLOWANCE/AD DITION TO 5 % OF THE ALLEGED NON G ENUINE PURCHASES, LEARNED COMM ISSIONER (APPEALS) DIRECTED THE AO TO RESTRICT THE AD DITION TO 5% OF THE ALLEGED NON GENUINE PURCHASES. 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE DISPUTE BEFORE US, A S IT APPEARS , IS ONLY CONFINED TO THE QUANTUM OF DISALLOWANCE/ADDITION TO BE MADE BECAUSE OF ALLEGED NON GENUINE PURCHASES . W HILE THE AO HAS MADE DISALLOWANCE BY ESTIMATING PROFIT ELEMENT ON THE A LLEGED BOGUS PURCHASES AT 12.5%, LEARNED COMMISSIONER (APPEA LS) HAS RESTRICTED IT TO 5%. IT IS OBSERVED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10 , IN ITA NO. 2966/MUM/2018 DATED 22.03.2019, THE TRIBUNAL AFTER TAKING NOTE OF THE FACT THAT THE FIRST APPELLATE A UTHORITY WHILE DE CIDING ASSESSEES APPEAL FOR A SSESSMENT Y EAR 2011 - 12 INVOLVING IDENTICAL FACTS AND ISSUES HAD RESTRICTED THE ADDITION/DISALLOWANCE TO 3 ITA NO. 7564 / MUM/2019 ASSESSMENT YEAR: 2010 - 1 1 5% OF THE ALLEGED NON - GENUINE PURCHASES . IN THE IMPUGNED ASSESSMENT YEAR, LEARNED COMMISSIONER (APPEALS) WHILE RESTRICTING THE ADDITION/DISALLOWANCE TO 5% HAS FOLLOWED THE AFOREMENTIONED ORDER OF THE TRIBUNAL. NOTHING HAS BEEN BROUGHT TO MY NOTICE TO DEMONSTRATE THAT THE MATERIAL FACTS RELATING TO ISSUE IN THE IMPUGNED ASSESSMENT YEAR ARE IN ANY WAY DIF FERENT FROM ASSESSMENT YEAR 2009 - 10 . 5. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFI RMITY IN THE DECISION OF THE LEARNED COMMISSIONER (APPEALS). ACCORDING LY, I UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE BY DISMISSING THE GROUND RAISED BY THE REVENUE . 6 . IN THE RESULT, APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE , 2021 . SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 04 / 06 /202 1 ALINDRA, PS 4 ITA NO. 7564 / MUM/2019 ASSESSMENT YEAR: 2010 - 1 1 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI