ITO 24(1)(3), MUMBAI V. BIJAL PRASHANT KALBAG, MUMBAI

ITA 806/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1815 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH RAI
• Keywords: Gift; Accommodation entries
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY (JM) ITA NO. 806 /MUM/2019 ASSESSMENT Y EAR: 2011 - 12 THE INCOME TAX OFFICER - 24(1)(3), ROOM NO. 606, PIRAMAL CHAMBERS, JEEJEEBHOY LANE, LALBAUG, PAREL, MUBMAI - 400 012 VS. SMT. BIJAL PRASHANT KALBAG, 1/B, DASHMESH COLONY, FOUR BUNGALOW ROAD, ANDHERI (W), MUMBAI - 400058 PAN: AIZPK3640D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SAURABH RAI ( DR ) ASSESSEE BY : NONE DATE OF HEA RING: 27/05 /20 21 DATE OF PRONOUNCEMENT: 25 / 06 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 16.11.2018 OF L EARNED COMMISS IONER OF INCOME TAX (APPEALS) - 36 , MUMBAI . THOUGH, THE IMPUGNED O RD ER OF LEARNED COMMISSIONER (APPEALS) IS A COMMON ORDER FOR ASSESSMENT YEA RS 2009 - 10, 2010 - 11 AND 2011 - 12, HOWEVER, PRESENTLY I AM CONCERNED WITH ASSESSMENT YEAR 2011 - 12 ONLY. 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF T H E ASSESSEE TO REPRESENT THE CASE. HOWEVER, CONSI DERING THE NATURE OF DISPUTE, I P ROCEED TO DISPOSE OF THE APPEAL EX - PARTE QUA TH E ASSESSEE AFTER HEARING THE LEARNED DEPARTME NTAL REPRESENTATIVE AND BASED ON MATERIAL ON RECORD. 2 ITA NO. 806 / MUM/2019 ASSESSMENT YEAR: 2011 - 12 3. THE DISPUTE IN THE PRESEN T APPEAL IS CONFINED TO P ARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF ALLEGED NON GENUINE PURCHASES. 4. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL AND IS STATED TO BE CARRYING ON BUSINESS IN MANUFACTURE OF TROPHIES AND GIFT ITEMS . FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED HER RETURN OF INCOME ON 26.09.2011 DECLARING TOTAL INCOME OF RS. 11,35,938/ - . SUBSEQUENTLY, BASED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GO VERNMENT OF MAHARASHTRA THROUGH THE DGIT (INV.), MUMBAI THAT PURCHASES WORTH RS. 12,44,297/ - CLAIMED TO HAVE BEEN MADE DURING THE YEAR ARE IN THE NATURE OF ACCOMMODATION ENTRIES, HENCE, NON - GENUINE , THE ASSESSING OFFICER (AO) REOPEN ED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE DISPUTED PURCHASES. THOUGH, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCE S IN SUPPORT OF THE PURCHASES, H OWEVER, THE AO WAS N OT CONVINCED. ACCORDINGLY, HE CONCLUDED THAT THE ASSESSEE WAS UNABLE TO PROVE THAT THE PURCHASES FROM THE CONCERNED PARTIES ARE NON - GENUINE. HOWEVER, HE ACCEPTED THAT THE GOODS IN QUESTION WERE ACTUALLY PURCHASED BY THE ASSESSEE , MAY BE , FROM GREY MAR KET A T A LOWER RATE. THEREFORE , HE DISALLOWED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING AT 18% . THUS, HE WORKED OUT THE DISALLOWANCE AT RS. 2,23,973/ - AND ADDED TO THE INCOME OF THE ASSESSEE. ASSESSEE CONTESTED THE AFORE SAID DISALLOWANCE BEFOR E LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES. 5. I HAVE C ONSID ERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD , THOUGH , THE AO WAS OF THE VIEW THAT THE ASSESSEE COULD NOT PROVE THAT THE DISPUTED PURCHASES WERE MADE FROM THE CONCE RNED PARTIES, 3 ITA NO. 806 / MUM/2019 ASSESSMENT YEAR: 2011 - 12 H OWEVER, HE ACCEPTED THE FACT THAT THE GOODS IN DISPUTE , INDEED , WERE PURCHASED BY THE ASSESSEE FROM UNVERIFIED SOURCES . FOR THIS REASON ALONE , IN STEAD OF DISALLOWING THE ENTIRE PURCHASES, THE AO HAS DISALLOWED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY ESTIMATING AT 18%. WHEREAS , LEARNED COMMISSIONER (APPEALS) HAS REDUCED IT TO 12.5%. THUS, THE DISPUTE IS ON LY WITH REGARD TO THE QUANTUM OF PROFIT ELEMENT, WHICH CAN BE CONSIDERED FOR DISALLOWANCE. AFTER CONSIDERING THE OVERALL FACTS, I A M OF THE V IEW THAT THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLO WANCE 12.5% OF THE ALLEGED NON - G ENUINE P URCHASES IS FAIR AND REASONABLE, H ENCE, NEEDS TO BE UPHELD. ACCORDINGLY, I DO SO. GROUNDS ARE DISMISSED. 6 . IN THE RESULT, APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE , 2021 . SD/ - ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 25 / 06 /202 1 ALINDRA, PS / 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