ITO 22 (1)(5), MUMBAI V. M/S HIMALAYA PLYWOOD , MUMBAI

ITA 7593/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1810 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIDD ARAMAP P A
• Keywords: Corroborative evidences
• Section: 147; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY , J UDICIAL M EMBER ITA NO. 7593 /MUM/2019 ASSESSMENT Y EAR: 2008 - 09 ITA NO. 7594/MUM/2019 ASSESSMENT Y EAR: 2009 - 10 ITA NO. 7595/MUM/2019 ASSES SMENT Y EAR: 2010 - 11 & ITA NO. 7596/MUM/2019 ASSESSMENT Y EAR: 2011 - 12 INCOME TAX OFFICER 22(1)(5), 323, 3 RD FLOOR, PIRAMAL CHAMBERS, LAL BAUG, PAREL, MUMBAI - 400012 VS. M/S HIMALAYA PLYWOOD, SHOP NO. 11, GOLD COIN APTS., VAKOLA PIPE LINE, NEHRU RO AD, SANTACRUZ (EAST), MUMBAI - 400055 PAN: AABFH1856Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHIDDARAM A P P A (DR) ASSESSEE BY : NONE DATE OF HEARING : 25 /05 /202 1 DATE OF PRONOUNCEMENT: 25 / 0 6 /202 1 O R D E R CAPTIONED APPEALS RELATING TO THE SAME ASSESSEE HAVE BEEN FILED BY THE REVENUE CHALLENGING A COMMON ORDER DATED 12.09.2019 PASSED BY THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) - 34 , MUMBAI FOR THE A SSESSMENT YEAR S 2008 - 09, 2009 - 10, 2010 - 11 & 2011 - 12. 2. WHEN APPEALS WERE CALLED FOR HEARING NO ONE WAS PRESENT FOR THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE , I PROCEED TO DISPOSE OF THE APPEALS 2 ITA NO S . 7593 - 7596 / MUM/2019 ASSESSMENT YEAR S : 20 08 - 09, 2009 - 10, 2010 - 11 & 2011 - 12 EX - PARTE QUA TH E ASSESSEE AFTER HEARING THE LEARNED DEPARTMENT AL REPRESENTATIVE AND BASED ON MATERIAL ON RECORD. 3. THE ONLY DISPUTE RAISING ALL THESE APPEALS RELATES TO PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITIONS MADE BECAUSE OF ALLEGED NON - GENUINE PURCHASES. 4 . BRIEFLY THE FACTS ARE, THE ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS AS A DEALER IN PLYWOOD, TEAKWOOD, L AURINETES ETC. FOR THE ASSESSMENT YEARS UNDER DISPUTE THE ASSESSEE HAD FILED ITS RETURN S OF INCOME IN REGULAR COURSE. SUBSEQUENTLY, THE AS SESSING OFFICER ( AO ) RECEIVED INFORMATION FROM THE DGIT (INV.), MUMBAI THAT CERTAIN PURCHASES MADE BY THE ASSESSEE IN THE ASSESSMENT YEARS UNDER DISPUTE ARE NON - GENUINE AS THE ASSES SEE HAS AVAILED ACCOMMODATION/ FICTITIOUS BILLS FROM THE CONCERNED SELLING D EALERS. F ROM THE INFORMATION AVAILABLE ON RECORD IT WAS ALSO FOUND THAT SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA HAS ALSO FOUND THE CONCERNED SELLING DEALERS AS HAWALA OPERATORS PROVIDING ACCOMMODATION BILLS. THUS, BASED ON SUCH INFORMATION THE AO R EOPEN ED THE ASSESSMENT S UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE DISPUT ED PURCHASES THROUGH SUPPORTING EVIDENCE. THOUGH, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDE NCES TO CLAIM THE PURCHASES AS GENUINE, HOWEVER, THE AO WAS UNCONVIN CED. THEREFORE, REJECTING ASSESSEES CLAIM HE HELD THE PURCHASES AS NON GENUINE. HOWEVER, BEING OF THE VIEW THAT THE ASSESSE HAS SUPPRESSED ITS ACTUAL PROFIT BY INFLATING THE PURCHASES, T H E AO PROCEEDED TO DISALLOW 25% OUT OF THE PURCHASES MADE IN EACH ASSESS MENT YEAR UNDER DISPUTE. THE DISALLOWANCES MADE BY THE AO IN DIFFERENT ASSESSMENT YEARS ARE AS UNDER: ASSESSMENT YEAR 2008 - 09 : RS. 7,19,026/ - ASSESSMENT YEAR 2009 - 10 : RS. 21,99,636/ - ASSESSMENT YEAR 2010 - 11 : RS. 15,94,724/ - ASSESSMENT YEAR 2011 - 12 : RS. 6,17,001/ - 3 ITA NO S . 7593 - 7596 / MUM/2019 ASSESSMENT YEAR S : 20 08 - 09, 2009 - 10, 2010 - 11 & 2011 - 12 5 . THE AFORESAID DISALLOWANCES MADE BY THE AO WERE CONTESTED BEFORE LEARNED COMMISSIONER (APPEALS). PARTLY ACCEPTING THE SUBM ISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES IN EACH ASSESSMENT YEARS UNDER DISPUTE. 6 . I HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, THO UGH , THE AO HAS HELD CERTAIN PURCHASES MADE BY THE ASSESSEE IN DIFFERENT ASS ESSMENT YEARS AS NON - GENUINE, H OWEVER, ULTIMATELY HE HAS R ESTRICTED THE DISALLOWANCE TO THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING AT 25%. W HEREAS , LEARNED COMMISS IONER (APPEALS) HAS REDUCED IT TO 12.5%. THUS, THE DISPUTE BEFORE ME IS CONFINED TO THE REASONABLE PROFIT RATE WHICH CAN B E CONSIDERED FOR DISALLOWANCES. HAVING CONSIDERED THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THE VARI OUS DECI SIONS REFERRED TO BY LEARNED COMMISSIONER (APPEALS ), I HOLD THAT THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE TO 12.5% BEING FAIR AND REASONABLE DESERVES TO BE UPHELD . ACCORDINGLY, I DO SO. 7 . IN THE RESULT, APPEAL S ARE D ISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE , 2021 . SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 25 / 06 /202 1 ALINDRA, PS 4 ITA NO S . 7593 - 7596 / MUM/2019 ASSESSMENT YEAR S : 20 08 - 09, 2009 - 10, 2010 - 11 & 2011 - 12 / 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