DCIT CIR 15(1), MUMBAI v. JITENDRA MOTANI PROP NITIN IMPEX, THANE

ITA 5927/MUM/2009 | 2006-2007
Pronouncement Date: 29-03-2011 | Result: Dismissed

Appeal Details

RSA Number 592719914 RSA 2009
Assessee PAN AADPM3770G
Bench Mumbai
Appeal Number ITA 5927/MUM/2009
Duration Of Justice 1 year(s) 4 month(s) 23 day(s)
Appellant DCIT CIR 15(1), MUMBAI
Respondent JITENDRA MOTANI PROP NITIN IMPEX, THANE
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 29-03-2011
Date Of Final Hearing 20-10-2010
Next Hearing Date 20-10-2010
Assessment Year 2006-2007
Appeal Filed On 06-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI R.V.EASWAR PRESIDENT & SHRI T.R.SOOD ACCOUNTANT MEMBER. I.T.A.NO.5927/MUM/2009 - A.Y 2006-07 DY. COMMISSIONER OF INCOME TAX CIRCLE 15(1) MUMBAI . VS. SHRI JITENDRA MOTANI PROP. M/S NITIN IMPEX TAPIWALI UDYOG NAGAR VALIV PHATA VASAI EAST DISTRICT THANE 401202 PAN: AADPM 3770 G (APPELLANT) (RESPONDENT) AND C.O.NO.116/MUM/2010 A.Y 2006-07 (ARISING OUT OF I.T.A.NO.5927/M/09) SHRI JITENDRA MOTANI MUMBAI. VS. DY. CIT CIRCLE 15 MUMBAI. (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI S.K.SINGH. ASSESSEE BY : S/SHRI K. SHIVRAM & AJAY SINGH. O R D E R PER T.R.SOOD AM : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE HEARD TOGETHER AND ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 3. I.T.A.NO.5927/M/09 : IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT[A] ERRED ON FACTS AS WELL AS IN LAW TO RESTRICT THE ESTIMATI ON OF GO ONLY TO THE EXTENT OF 3% OF TAINTED PURCHASE AS AGAINST THE GP ESTIMATED @ 4.5% ON ENTIRE TURN OVER AFTER HAVING ACCEPTED THE REJEC TION OF BOOK RESULT IN PRINCIPLE. 4. C.O.116/M/10 : IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2 1. REJECTION OF BOOKS PROFIT & ESTIMATE OF G.P. @ 3%. 2. THE LEARNED COMMISSIONER OF INCOME TAX [APPEAL] ERR ED IN UPHOLDING THE REJECTION OF BOOK PROFIT MERELY BECAU SE FEW PARTIES WERE NOT AVAILABLE WITHOUT POINTING OUT ANY DEFECT IN BOOKS MORE SO WHEN THE TRANSACTION WERE THROUGH PRO PER BANKING CHANNEL AND THE ASSESSEE HAD SHOWN THE QUAN TITATIVE TALLY. 3. THE LEARNED COMMISSIONER OF INCOME TAX [APPEAL] ERR ED IN ESTIMATING THE G.P. @ 3% IN CASE OF TAINTED PURCHAS ES WITHOUT APPRECIATING THE FACT THAT IN ASSESSEE LINE OF BUSI NESS BASICALLY THERE IS VERY LOW PROFIT MARGIN AND THE FROM THE ABOVE IT IS CLEAR THAT THE ISSUE IS ONLY REGARDING ESTIMATION OF PROFITS AFTER REJECTION OF THE BOOKS OF ACCOUNT. 5. AFTER HEARING BOTH THE PARTIES WE FIND THAT AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN I. T.A.NOS.3024 TO 3028/MUM/08 FOR A.YRS.2001-02 TO 2003-04 AND 2005-0 6 AND C.O.NOS.162 TO 166/MUM/08 FOR A.YRS.2001-02 TO 2003 -04 AND 2005- 06 AND AFTER CONSIDERING THE ISSUE IN DETAIL THE T RIBUNAL VIDE PARA-7 HAS HELD AS UNDER: 7. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE FA CTS OF THE CASE RIVAL SUBMISSIONS AND RELEVANT RECORD. THE AO APPLI ED THE GP @ 4.5% ON THE ENTIRE SALES TURNOVER INCLUDING THE ALLEGED BOGUS SALES AND CONSEQUENTLY MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE OVER AND ABOVE THE NET PROFIT SHOWN IN THE P &L ACCOUNT FOR THE RESPECTIVE ASSESSMENT YEARS. SUCH ADDITION MADE BY THE AO ON THE BASIS OF G.P. RATE APPLIED TO THE ENTIRE SALES IS N OT LEGALLY AND FACTUALLY TENABLE. THE ELEMENT OF INFLATION IN PURCHASES CAN BE POSSIBLE ONLY IN RESPECT OF SUCH BOGUS PURCHASES. THE ESTIMATION AND APPLICATION OF UNIFORM G.P. @ 4.5% ON THE ENTIRE SALES OF THE ASSE SSEE IS NOT REASONABLE AND NOT ON CONSONANCE WITH THE FACTS OF THE PRESENT CASE AS THE ENTIRE PURCHASES AND ENTIRE SALES WERE NOT NON- GENUINE. THE SAID GP RATE MAY NOT BE APPLICABLE IN RESPECT OF EXPORT BUSINESS. THE AO HAS TREATED THE PURCHASES FROM THE ALLEGED 16 PARTI ES AS BOGUS PURCHASES. NO ADVERSE FINDING HAS BEEN GIVEN BY THE AO IN RESPECT OF REMAINING PURCHASES. THEREFORE UNIFORM ESTIMATION AND APPLICATION OF GP @ 4.5% IS NOT SUSTAINABLE. IN VIEW OF THIS WE A RE OF THE CONSIDERED OPINION THAT THE GP RATE APPLIED BY THE LD. CIT[A] AT 3% IN RESPECT OF TAINTED PURCHASES IS FAIR AND REASONABLE. THEREFORE THE FINDINGS OF THE LD. CIT[A] IN RESPECT OF ALL THE ASSESSMENT INVOLV ED IN THE PRESENT APPEALS ARE UPHELD AND THE APPEALS OF THE REVENUE FOR ALL THE ASSESSMENT YEARS ARE DISMISSED. 3 SINCE IN THE ABOVE ORDER IT HAS BEEN CLEARLY HELD T HAT THE ESTIMATION OF PROFIT AT 3% IN RESPECT OF TAINTED PURCHASE IS FAIR AND REASONABLE AND IN THE YEAR BEFORE US THE LD. CIT[A] HAS ESTIMATED THE PROFIT @ 3% ON TAINTED PURCHASES THEREFORE RESPECTFULLY FOLLOWIN G THE ABOVE ORDER WE CONFIRM THE ACTION OF THE LD. CIT[A]. 6. IN THE RESULT REVENUES APPEAL AS WELL AS ASSES SEES CROSS OBJECTION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8 TH DAY OF MARCH 2011. SD/- SD/- (R.V.EASWAR) (T.R.SOOD) PRESIDENT ACCOUNTANT MEMBER MUMBAI: 28/3/2011. P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR ITAT MUMBAI. 4 SR.NO. PARTICULARS DATE INITIALS 1 DRAFT DICTATED ON 28-3-11 P 2 DRAFT PLACED BEFORE AUTHOR 28-3-11 P 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO SR.PS/PS 6 ORDER KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE A.R 10 DATE OF DISPATCH OF ORDER