R.K. SALES CORPORATON, MUMBAI V. ITO WD 13(2)(1), MUMBAI

ITA 760/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9404 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 16-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2012
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A.NO. 760/M/2012 (ASSESSMENT YEAR: 2008 - 2009 ) R.K. SALES CORPORATION, 307, POPATLAL CHAMBERS, 4 TH CROSS LANE, CLIVE ROAD, DANA BUNDER, MUMBAI 400 009. PAN: AAAFR4578A VS. ITO - 13 (3)(1), AAYAKAR BHAVAN , MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.P. BAIRAGRA RESPONDENT BY : SHRI AKHILENDRA YADAV, DR DATE OF HEARING: 16.02.2015 DATE OF ORDER: 25 .2.2015 O R D E R PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE ON 3.2.2012 IS AGAINST THE ORDER OF THE CIT (A) - 24, MUMBAI DATED 2.12.2011 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ADDING 2% OF THE URD PURCHASES AMOUNTING TO RS. 10,75,005/ - . 2. THE LD CIT (A) FAILED TO APPRECIATE THAT THE GP RATIO OF THE FIRM IS MAINTAINED FROM YEAR TO YEAR, BOOKS OF ACCOUNTS ARE AUDITED AND THE QUANTITATIVE TALLY IS MAINTAINED. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN SUPPLYING OF OLD NEWSPAPERS AND WASTE PAPERS. ASSESSEE REPORTED PURCHASES OF THE SAID OLD NEWS PAPERS FROM THE UNREGISTERED DEALER (URD). THE TOTAL GROSS PURCHASES FROM THE URDS IS RS. 5,37,50,272/ - . DURING THE ASSESSMENT, ASSESSING OFFICER UNDER TOOK T HE VERIFICATION OF THE SAID PURCHASES FROM THE URDS. ASSESSEE FURNISHED BOOKS OF ACCOUNTS IN SUPPORT OF THE SAME. ON PERUSAL OF THE BOOKS OF ACCOUNTS, ASSESSING OFFICER NOTICED CERTAIN DEFICIENCIES AND THE DETAILS ARE RECORDED ON PAGE S 2 AND 3 OF THE ASSE SSMENT ORDER. EVENTUALLY, ASSESSING OFFICER CAME TO THE CONCL USION THAT THE SCRUTINY OF THESE PURCHASES COULD NOT BE MADE CONSIDERING THE ABSENCE OF DETAILS . ACCORDINGLY, ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT D ISALLOWING 2% OF THE SAI D PURCHASES FROM URDS AND THE DISALLOWANCE WORKED OUT TO RS. 10,75,005/ - . AGGRIEVED WITH THE SAID DECISION OF THE ASSESSING OFFICER, ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 2 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESS EE MADE VARIOUS SUBMISSIONS AND PRODUCED BOOKS OF ACCOUNTS. AFTER CONSIDERING THE SAID SUBMISSIONS OF THE ASSESSEE, CIT (A) REJECTED THE CLAIM OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THUS, THE ADDITION OF RS. 10,75,0 05/ - WAS CONFIRMED AND THE APPEAL OF THE ASSESSEE WAS DISMISSED. AGGRIEVED WITH THE ABOVE ORDER OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE HEAVIL Y RELIED ON THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND THE CIT (A) AND REITERATED THE SAME. FURTHER, LD COUNSEL SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT (A) ADOPTING THE FLAT RATE OF 2 OF THE UNREG ISTERED PURCHASES IS UNFAIR AND THE SAME IS ON HIGHER SIDE. HOWEVER, HE AGREED TO THE FACT THAT THE DETAILS FURNISHED BY THE ASSESSEE ARE NOT ADEQUATE ENOUGH FOR CONDUCTING A REQUISITE VERIFICATION INTO THE CLAIMS OF THE ASSESSEE. LD COUNSEL ALSO SUBMITT ED THAT THE BENCH MAY TAKE A DECISION AFTER CONSIDERING THE FACTS OF THE CASE. 5. ON THE OTHER HAND, LD DR HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHO RITIES AS WELL AS THE PAPER BOOK FILED BEFORE US. WE FIND THAT THERE IS A NEED FOR CONFIRMING SOME OF THE ADDITION CONSIDERING THE ABSENCE OF RELEVANT DETAILS. FURTHER , WE ALSO FIND THERE IS NO JUSTIFICATION FOR THE ASSESSING OFFICER AND THE CIT (A) FOR ADOPTING 2% OF THE UNREGISTERED PURCHASES. NO COMPARATIVE CASES WERE CONSIDERED BY THE REVENUE AUTHORITIES WHILE MAKING SUCH DISALLOWANCE. THEREFORE, IN OUR OPINION, RESTRICTING THE DISALLOWANCE TO N AD - HOC SUM OF RS. 2 LAKHS SHOULD MEET BOTH THE ENDS OF JUSTICE. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO RS. 2 LAKHS ONLY . ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 T H FEBRUARY, 2015. S D / - S D / - (H.L. KARWA) (D. KARUNAKARA RAO) PRESIDENT ACCOUNTANT MEMBER DATE: 2 5 .2.2015 3 AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR D, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI