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Income Tax Appellate Tribunal, ‘SMC‘ BENCH
Before: SHRI M.BALAGANESH & SHRI AMARJIT SINGHShri
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-3 in appeal No.10843/Mum/2014-15 dated 03/08/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 24/12/2014 by the ld. Income Tax Officer, WD 4(1), Thane (hereinafter referred to as ld. AO).
Shri Bhairav Ramchandra Sawant
At the outset we find that the appeal is time barred by 320 days. We find that assessee has filed a delay condonation petition explaining the fact that due to Covid-19 pandemic lockdown was imposed from 24/03/2020 and by placing reliance on the Government of India of notification No.218979 dated 31/03/2020 in Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020 (No.2 of 2020) dated 31/3/2020 as per Clause 3(1)(b) extending the time limit specified in Income Tax Act which falls during the period from 20th day of March 2020 to 29th June 2020 for the purpose of filing appeal till 30/06/2020 or such other date as the Central Government by notification specify in this behalf. Subsequently, the Government vide Notification No.35/2020 dated 24/06/2020, has extended the said time limit up to 31/03/2021. In view of the same, we are inclined to condone the delay of 320 days in filing the appeal of the assessee and admit the appeals for adjudication.
The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in adding only the profit element embedded in the value of ingenuine purchases @25% as against 100% made by the ld. AO.
We have heard both the parties and perused the materials available on record. We find that assessee is engaged in the business of dealing in electrical engineering works contract of Indian Railways under the name and style of M/s. Rashtriya Industries. Pursuant to the information received from Sales Tax department, Government of Maharashtra, the assessment of the assessee was reopened u/s.147 of the Act after due recording of reasons for reopening the assessment wherein it was observed that assessee had made purchases from certain tainted dealers. Accordingly, the ld AO treated the purchases made from such parties as ingenuine. The ld. AO based on this information proceeded to make addition @100% of value of purchases made by the assessee from the tainted dealer. The ld. CIT(A) however, observed
Shri Bhairav Ramchandra Sawant that though the assessee could not satisfactorily explain the genuineness of the purchases made from the aforesaid tainted party, still the assessee has produced the copy of ledger extracts, copy of stock register, copy of sales bills with delivery challans etc., Since the corresponding sales made out of disputed purchases were not doubted by the ld. AO, only the profit element could be brought to tax. Despite the fact that the notice issued u/s.133(6) of the Act remain uncomplied. Accordingly, he estimated the profit element @25% of the value of purchases made from the grey market. Aggrieved by this order, only the Revenue is in appeal before us and assessee has not preferred any appeal before us.
We find that this Tribunal in series of decisions has been consistently holding the profit element embedded in the value of such disputed purchases to be at 12.5% depending upon the industry in which the assessee is engaged in. But the ld. CIT(A) had already estimated 25% which is actually higher than 12.5% being regularly estimated by this Tribunal and since the assessee has not preferred any appeal against the order of the ld. CIT(A) before us, we do not deem it fit to interfere in the order of the ld. CIT(A) and accordingly, the grounds raised by the Revenue are dismissed.
In the result, appeal of the Revenue is dismissed.
Order pronounced on 25/11 /2021 by way of proper mentioning in the notice board.