MUKESH KHERADI, MUMBAI v. ITO 20(2)(2), MUMBAI

ITA 2187/MUM/2010 | 2006-2007
Pronouncement Date: 31-03-2011 | Result: Allowed

Appeal Details

RSA Number 218719914 RSA 2010
Bench Mumbai
Appeal Number ITA 2187/MUM/2010
Duration Of Justice 1 year(s) 13 day(s)
Appellant MUKESH KHERADI, MUMBAI
Respondent ITO 20(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 31-03-2011
Date Of Final Hearing 23-09-2010
Next Hearing Date 23-09-2010
Assessment Year 2006-2007
Appeal Filed On 18-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI RAJENDRA SINGH A.M. AND SHRI V. DURGA RAO J.M. ITA NO. 2187/MUM/2010 ASSESSMENT YEAR: 2006-07 MUKHESH KHERADI APPELLANT 36/3 3 RD FLOOR RAVALGAON BLDG. J.B. NAGAR ANDHERI (E) MUMBAI 400 592 VS. INCOME TAX OFFICER 20(2)(2) RESPONDENT ROOM NO. 610 6 TH FLOOR PIRAMAL CHAMBER PAREL MUMBAI 400 012. APPELLANT BY : MR. VIJAY KOTHARI RESPONDENT BY : MRS. MALATHI SRIDHARAN . ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- 31 MUMBAI PASSED ON 01/01/2010 FOR THE AS SESSMENT YEAR 2006-07 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE D ISALLOWANCE U/S 37(1) OF THE INCOME TAX ACT OF RS. 3 64 883/- O N ACCOUNT OF PURCHASES MADE FROM THE M/S GUPTA ENTERPRISES. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE D ISALLOWANCE U/S 37(1) OF THE INCOME TAX ACT OF RS. 2 75 478/- O N ACCOUNT OF PURCHASES MADE FROM THE FOLLOWING PARTIES: A) M/S GOLDEN TEXTILES OF RS. 1 30 253/- B) M/S EVEREST TEXTILES OF RS. 1 45 225/- 3. WITHOUT PREJUDICE TO ABOVE THE LEARNED CIT(A) S HOULD HAVE CONFIRMED ONLY GROSS PROFIT MARGIN ON THESE PURCHAS ES AS THE ITA NO. 2187/MUM/10 M/S MAHESH KHERADI 2 QUANTITY OF GOODS TRADED HAS BEEN CONFIRMED AND TAL LIED BY TAX AUDITOR IN THEIR REPORT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN T EXTILES IN PROPRIETORSHIP CONCERNS M/S URVASHI FABRICS COMPAN Y AND M/S MUKHESH TEXTILES DURING THE RELEVANT ASSESSMENT YEA RS. IN ASSESSMENT THE ASSESSING OFFICER HAD OBSERVED THAT THE ASSESSEE HAD SHOWN PURCHASES OF RS. 1 30 253/- FROM M/S GOLDEN T EXTILES AND RS. 1 45 225/- FROM M/S EVEREST TEXTILES AND FURTHER RS . 3 64 883/- FROM M/S GUPTA ENTERPRISES. TO ASCERTAIN THE GENUINENESS OF PURCHASES THE ASSESSING OFFICER MADE ENQUIRIES BY ISSUING LET TERS U/S 133(6) WHICH WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARKS LEFT IN THE CASE OF GOLDEN TEXTILES AND EVEREST T EXTILES. ON BEING ASKED TO FURNISH THE RELEVANT CONFIRMATIONS FROM TH E SAID PARTIES THE ASSESSEE HAD FAILED TO FURNISH THE SAME. HENCE THE ASSESSING OFFICER TREATED THE PURCHASES SHOWN FROM PARTIES NAMELY M /S GUPTA ENTERPRISES GOLDEN TEXTILES AND EVEREST TEXTILES A MOUNTING TO RS. 6 40 361/- AS UNEXPLAINED AND THE SAME WAS DISALLOW ED AND ADDED BACK TO THE TOTAL INCOME. AGGRIEVED BY THE ORDER O F ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E CIT(A). 3. BEFORE THE CIT(A) THE ASSESSEE HAD NOT DISPUTED THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. HOWEVER ACCORDING TO THE AR OF THE ASSESSEE ALL THE SUPPORTING DOCUMENTS WIT H REGARD TO ALL THE PARTIES WERE SUBMITTED BEFORE THE ASSESSING OFFICER . IT WAS POINTED OUT THAT THE SALES OF THE ASSESSEE WERE NOT DISPUTE D BY THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE AUDITED AND THE QUANTITY OF GOODS TRADES WAS T ALLIED AND CONFIRMED BY THE AUDITORS. AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE THE CIT(A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE T HE ITAT. ITA NO. 2187/MUM/10 M/S MAHESH KHERADI 3 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS GIVEN DETAILS REGARDING M/S G UPTA ENTERPRISES LIKE COPY INVOICES AT PAGE 8 & 9 AND COPY OF STATEM ENT ISSUED BY KOTAK MAHINDRA BANK WHEREIN SHOWING THE REQUIRED EN TRIES PERTAINED TO PURCHASES AT PAGE 10 OF PAPER BOOK WERE FILED B EFORE THE ASSESSING OFFICER. IT IS SUBMITTED THAT PURCHASES FROM M/S GO LDEN TEXTILES AND M/S EVEREST TEXTILES WERE MADE DURING THE YEAR AND THE ASSESSEE DO NOT HAVE ANY WHEREABOUTS OF THE PARTY SINCE HE HAS NO MORE DEALING WITH THESE PARTIES. IT IS SUBMITTED THAT A COPY OF CONFIRMATION ACCOUNTS FROM M/S EVEREST TEXTILES FILED AT PAGE 11 OF PAPER BOOK. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE AUDITED AND THE QUANTI TY OF GOODS TALLIED AND CONFIRMED BY THE AUDITORS. TO THIS EFFECT HE I NVITED OUR ATTENTION TO PAPER BOOK AT PAGES 24 & 25 WHERE THE ANNUAL REP ORT HAS BEEN FILED TO ESTABLISH THAT THE PURCHASES MADE BY THE A SSESSEE ARE GENUINE. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE HAS RELIED UPON THE ORDERS OF THE REVENUE AUTHORITI ES AND SUBMITTED THAT SIMPLY BECAUSE THERE IS A SALE IT CANNOT BE S AID THAT THERE IS PURCHASE ALSO. THE LEARNED DEPARTMENTAL REPRESENTAT IVE FURTHER SUBMITTED THAT THE ONUS LIES ON THE ASSESSEE THAT T HE PURCHASES MADE ARE GENUINE. IN THIS CONNECTION SHE RELIED UPON TH E DECISION IN THE CASE OF SHRI GANESH RICE MILLS VS. CIT 294 ITR 316 (ALL.) 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS GONE THROUGH DECISIONS CITED. WE F IND THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE SUBJECT TO AUDIT. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS FAILED TO FURNISH CONFIRMATIO N FROM THE PARTIES FROM WHOM HE MADE PURCHASES. THEREFORE THE REVENUE AUTHORITIES TREATED THE PURCHASES MADE BY THE ASSESSEE AS BOGUS PURCHASES AND MADE THE DISALLOWANCE OF PURCHASES. IT IS ALSO A FA CT THAT THE ASSESSEE ITA NO. 2187/MUM/10 M/S MAHESH KHERADI 4 HAS GIVEN QUANTITATIVE DETAILS AND THE ASSESSEE HAS MADE SALES CORRESPONDING TO THE SHIRT PURCHASES. THEREFORE IT CANNOT BE SAID THAT THE PURCHASES ARE BOGUS PURCHASES. IT CAN ONLY BE SAID THAT THE PURCHASES ARE NOT SUPPORTED BY PROPER BILLS ETC. I N SUCH A CASE AT THE MOST TRADING ACCOUNT CAN BE REJECTED AND PROFI TS CAN BE ESTIMATED BUT THE ENTIRE PURCHASES CANNOT BE DISALL OWED. IN VIEW OF THE ABOVE WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DI RECTION EXAMINE THE DETAILS ESTIMATE PROFITS AND DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH THE LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH 2011. SD/- SD/- (RAJENDRA SINGH) (V. DURGA R AO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: MARCH 2011. ITA NO. 2187/MUM/10 M/S MAHESH KHERADI 5 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE G BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV