ITO 33(1)(5), MUMBAI v. SMT.HEENA AJAY PAREKH, MUMBAI

ITA 5819/MUM/2018 | 2010-2011
Pronouncement Date: 28-11-2019 | Result: Dismissed

Appeal Details

RSA Number 581919914 RSA 2018
Assessee PAN AKDPP9648L
Bench Mumbai
Appeal Number ITA 5819/MUM/2018
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant ITO 33(1)(5), MUMBAI
Respondent SMT.HEENA AJAY PAREKH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 28-11-2019
Last Hearing Date 24-09-2019
First Hearing Date 24-09-2019
Assessment Year 2010-2011
Appeal Filed On 09-10-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY JUDICIAL MEMBER AND SHRI N.K. PRADHAN ACCOUNTANT MEMBER ITA S NO . 5819 & 5020 / MUM . / 2018 ( ASSESSMENT YEAR : 2010 11 & 2011 12 ) INCOME TAX OFFICER WARD 33(1)(5) MUMBAI . APPELLANT V/S SMT. HEENA AJAY PARIKH E 304 DHEERAJ PRESIDENCY M.G. ROAD OPP. SANSKRUTI BHAVAN KANDIVALI (W) MUMBAI 400 067 PAN AKDPP9648L . RESPONDENT CROSS OBJECTION S NO.234 & 235 /MUM./2019 ( ARISING OUT OF ITA S NO .5819 & 5820 /MUM./ 2018 ) ( ASSESSMENT YEAR : 2010 11 & 2011 12 ) SMT. HEENA AJAY PARIKH E 304 DHEERAJ PRESIDENCY M.G. ROAD OPP. SANSKRUTI BHAVAN KANDIVALI (W) MUMBAI 400 067 PAN AKDPP9648L . CROSS OBJECTOR [ORIGINAL RESPONDENT] V/S INCOME TAX OFFICER WARD 33(1)(5) MUMBAI . RESPONDENT (ORIGINAL APPELLANT) REVENUE BY : SHRI BERA RAM ASSESSEE BY : SHRI TARUN GHIA DATE OF HEARING 19 . 11 .2019 DATE OF ORDER 28.11.2019 2 SMT. HEENA AJAY PARIKH O R D E R T HE CAPTIONED APPEALS BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE ARISE OUT OF TWO SEPARATE ORDERS BOTH DATED 28 TH JUNE 2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 45 MUMBAI FOR THE ASSESSMENT YEAR S 2010 11 AND 2011 12. 2. THE COMMON G RIEVANCE OF BOTH THE PARTIES IS IN RELATION TO THE ADDITION S DELETED/SUSTAINED BY LEARNED COMMISSIONER (APPEALS) WITH REGARD TO THE NON GENUINE PURCHASES. 3. BRIEF FACTS ARE THE ASSESSEE AN INDIVIDUAL IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL THROUGH HIS PROPRIETARY CONC ERN M/S.HEENA ENTERPRISES. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION THE ASSESSEE FILED HER RETURNS OF INCOME IN REGULAR COURSE. THE RETURNS OF INCOME WERE INITIALLY PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ). SUBS EQUENTLY ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.) MUMBAI AND THE SALES TAX DEPARTMENT GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRIES PROVIDED BY CERTAIN HAWALA OPERATORS THROUGH BOGUS PURCHASE BI LLS THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ON THE BASIS OF 3 SMT. HEENA AJAY PARIKH INFORMATION AV AILABLE ON RECORD FOUND THAT PURCHASES WORTH ` 15 06 504 CL AIMED TO HAVE BEEN MADE FRO M ELEVEN PARTIES IN THE ASSESSMENT YEAR 2010 11 AND PURCHASES WORTH ` 27 63 725 FROM FOUR PARTIES IN THE ASSESSMENT YEARS 2011 12 ARE NON GENUINE. ACCORDINGLY HE CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH PURCHASES. FURTHER TO ASCERTAIN T HE GENUINENESS OF SUCH PURCHASES THE ASSESSING OFFICER HIMSELF CONDUCTED INDEPENDENT ENQUIRY BY ISSUING NOTICES UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES. HOWEVER AS OBSERVED BY THE ASSESSING OFFICER SUCH NOTICES RETURNED BACK UNSERVED BY THE POSTAL AUTHORITIES. THEREFORE HE CALLED UPON THE ASSESSEE TO PRODUCE THE CONCERNED PARTIES FOR VERIFYING THE GENUINENESS OF PURCHASES. IT IS ALLEGED THAT THE ASSESSEE COULD NOT PRODUCE THE CONCERNED PARTIES. FURTHER THE ASSESSEE WAS ALSO UNABLE TO F URNISH ANY CLINCHING EVIDENCE TO PROVE THE GENUINENESS OF SUCH PURCHASES. ACCORDINGLY ASSESSING OFFICER TREATED THE PURCHASES MADE AS NON GENUINE AND COMPUTED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES BY APPLYING THE RATE OF 12.5% AND MADE THE ADDITIO N ACCORDINGLY. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION S BEFORE THE FIRST APPELLATE AUTHORITY. 4. THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE FOUND THAT THE ASSESSEE HAS ALREADY DECLARED GROSS PROFIT RATE OF 7 .2% ON ALL PURCHASES INCLUDING THE 4 SMT. HEENA AJAY PARIKH ALLEGED NON GENUINE PURCHASES. THEREFORE RELYING UPON CERTAIN JUDICIAL PRECEDENTS HE DIRECT ED THAT THE DIFFERENTIAL GROSS PROFIT RATE BETWEEN 12.5% AS APPLIED BY THE ASSESSING OFFICER AND 7.2% AS DECLARED BY THE ASSESSE E WORKING OUT TO 5.3% SHOULD BE APP LIED TO MAKE THE ADDITION ON NON GENUINE PURCHASES. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTS ON RECORD CLEARLY REVEAL THAT THE ASSESSING OFFICER HAD SPECIFIC INFORMATION INDICATING CERTAIN PURCHASES MADE BY THE ASSESSEE WERE NON GENUINE. ACCORDINGLY IN THE COURSE OF ASSESSMENT PROCEEDINGS NOT ONLY H E CALLED UPON THE ASSESSEE TO FURNISH CORROBORATIVE EVIDENCE TO PROVE THE GENUINENESS OF PURCHASES BUT HE HIMSELF CONDUCTED INDEPENDENT ENQUIRY BY ISSUING NOTICE UNDER SECTION 133(6) OF THE ACT. IT IS EVIDENT THAT THE GENUINENESS OF PURCHASES COULD NOT BE PROVED BY THE ASSESSEE WITH CONCLUSIVE EVIDENCE. THAT BEING THE CASE THE ASSESSING OFFICER WAS JUSTIFIED IN ESTIMATING THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. THEREFORE THE DISPUTE AS IT EXIST NOW ACCORDING TO US IS THE REASONABLE PROFIT PERCEN TAGE AT WHICH THE ADDITION CAN BE WORKED OUT ON NON GENUINE PURCHASES. AFTER CONSIDERING TH E NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE AND OTHER ATTENDING FACTS AND CIRCUMSTANCES RELATING TO THE DISPUTE WE ARE OF THE CONSIDERED VIEW THAT LEARNED COMMI SSIONER (APPEALS) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO THE DIFFERENTIAL GROSS PROFIT RATE OF 5 SMT. HEENA AJAY PARIKH 5.3% I.E. THE DIFFERENCE BETWEEN THE GROSS PROFIT DECLARED BY THE ASSESSEE @ 7.2% AND AS ESTIMATED BY THE ASSESSING OFFICER @ 12.5%. THEREFORE WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 6. IN THE RESULT REVENUES APPEAL S AND ASSESSEES CROSS OBJECTION S ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 28.11.2019 SD/ N.K. PRADHAN ACCOUNTAN MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI DATED: 28.11.2019 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR ITAT MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT MUMBAI