Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: SHRI SHAMIM YAHYA & BEFORE SHRI SAKTIJIT DEY
O R D E R
PER SAKTIJIT DEY, JM
This is an appeal by the revenue against order dated 14.02.2020 of learned Commissioner of Income Tax (Appeals)-1, Thane, for the assessment year 2010-11.
Though, the Registry has pointed out delay of 211 days in filing the appeal, however, after considering the submissions of learned Departmental Representative, we are convinced that in view of ordinance dated 24.06.2020 of Government of India, Ministry of Finance, Department of Revenue, extending 2 Assessment Year: 2010-11 the period of limitation due to Covid-19, there is no delay. Accordingly, we admit the appeal for adjudication on merits. 3. The dispute in the present appeal is confined to partial 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 a resident company, engaged in the business of air, water analysis and erection, operation and management of effluent treatment plant and pollution control consultants. For the assessment year under dispute, assessee filed its return of income on 26.09.2010 declaring total income of Rs. 71,10,310/-. Subsequently, based on information received from Sales Tax Department, Mumbai that certain purchases made by the assessee are non genuine and are essentially in the nature of accommodation entries, the Assessing Officer (AO) reopened the assessment under section 147 of the Act. In course of assessment proceedings, the AO called upon the assessee to prove purchases worth Rs. 4,96,316/- shown from three parties. Though, the assessee furnished some documentary evidences and submitted that purchases are genuine, however, the AO was not convinced. He observed, the assessee failed to furnish any evidence to prove physical delivery of goods. Thus, ultimately, he observed that the entire purchases of Rs. 4,96,316/– are non genuine and added back to the income of the assessee. Assessee contested the aforesaid disallowance before learned Commissioner (Appeals). After considering the submissions of the assessee in the context of facts and materials on record, learned Commissioner (Appeals) restricted the disallowance to 12.5% of the alleged non genuine purchases.
3 Assessment Year: 2010-11 5. When the appeal was called for hearing, none appeared on behalf of the assessee despite notice. Therefore, we proceed to dispose of the appeal ex-parte qua the assessee after hearing the learned Departmental Representative and based on materials on record.
6. We have considered the submissions of learned Departmental Representative and perused the materials on record. It is evident, based on information received from Sales Tax Department, the AO has treated purchases worth Rs.4,96,316/- as non genuine and added back to the income of the assessee. However, fact remains that the assessee has carried on its business activities during the year. According to Assessing Officer, assessee has shown gross receipt of Rs. 9.31 crores and has offered gross profit and net profit of Rs. 1,72,38,922/- and `. 67,70,516/– respectively. The AO has neither disputed nor disbelieved the turnover shown by the assessee. Thus, it can be safely concluded that in absence of purchased goods the assessee could not have carried out its business activity. In such scenario, the doubt if any, is only with regard to the source of purchases. Thus, there can be a presumption that the assessee might have purchased the goods from unverified sources and to regularize such purchases might have obtained accommodation bills from the concerned parties. That being the factual position, the entire purchases cannot be disallowed, but, only the profit element embedded in such purchases can be considered for addition. That being the case, we do not find any infirmity in the decision of learned Commissioner (Appeals).
In the result, appeal is dismissed.
4 Assessment Year: 2010-11