ITO WD 19(2)(3), MUMBAI vs. MINTU SAYERMAL JAIN, MUMBAI

PDF · subscribers
ITA 6279/MUM/2018Status: DisposedITAT Mumbai17 January 2020AY 2010-116 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the addition. The CIT(A) had directed the AO to verify the assessee's claim of not making the disputed purchases, but the AO failed to provide any report, leading the CIT(A) to accept the assessee's claim.

What were the facts?

The assessee, engaged in metal trading, was found to be a beneficiary of accommodation bills by the Assessing Officer (AO). The AO disallowed purchases amounting to Rs. 21,92,894, but restricted the addition to 12.5% based on a High Court decision.

What were the issues?

Whether the CIT(A) was justified in deleting the addition when the AO failed to provide a report on the assessee's claim of not making disputed purchases.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 147

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI RAJESH KUMAR

For Respondent: Smt. Jothilakshmi Nayak

Income Tax Officer ……………. Appellant Ward–19(2)(3), Mumbai v/s Shri Mintu Sayermal Jain 435, Pathe Bapurao Marg Opp. Islampura Street ……………. Respondent Somi Building, Mumbai 400 004 PAN – ADCPJ3983C Revenue by : Smt. Jothilakshmi Nayak Assessee by : None Date of Hearing – 08.01.2020 Date of Order – 17.01.2020

O R D E R PER SAKTIJIT DEY. J.M.

The captioned appeal has been filed by the Revenue challenging 17th the order dated August 2018, passed by the learned Commissioner of Income Tax (Appeals)–53, Mumbai, pertaining to the assessment year 2010–11.

2.

Brief facts are, the assessee, an individual, is engaged in the business of trading in ferrous and non–ferrous metal. For the assessment year under dispute the assessee filed its return of income

2 Shri Mintu Sayermal Jain on 15th October 2010, declaring income of ` 5,02,670. The return of income filed by the assessee was initially processed under section 143(1) of the Income Tax Act, 1961 (for short "the Act"). Subsequently, on the basis of information received from the Sales Tax Department, Government of Maharashtra, through the office of the DGIT (Inv.), Mumbai, revealing that the assessee is a beneficiary of accommodation bills provided by hawala operators, the Assessing Officer re–opened the assessment under section 147 of the Act. In the course of assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of purchases amounting to ` 21,92,894, claimed to have been made during the year from five parties. In response to the query raised by the Assessing Officer, the husband of the assessee appeared from time–to–time. As alleged by the Assessing Officer, the assessee failed to furnish the required details called for. Thus, ultimately, the Assessing Officer proceeded to complete the assessment by treating the purchases worth ` 21,92,894, as non–genuine. However, relying upon the decision of the Hon’ble Gujarat High Court in Simit P. Sheth, [2013] 356 ITR 451 (Guj.), he restricted the addition to 12.5% of the non–genuine purchases. The assessee challenged the aforesaid addition before the first appellate authority.

3 Shri Mintu Sayermal Jain

3.

Before learned Commissioner (Appeals), the assessee specifically pleaded that during the year under consideration, she has not made any purchases from the concerned parties. To support such contention, the assessee furnished the extract of purchase register. On the basis of submissions made by the assessee and evidences furnished, learned Commissioner (Appeals) directed the Assessing Officer to verify assessee’s claim and furnish his report. As observed by learned Commissioner (Appeals), the Assessing Officer did not furnish any report on the submissions made and evidences filed by the assessee. Thus, accepting assessee’s claim that she has not effected the disputed purchases during the year, learned Commissioner (Appeals) deleted the addition of ` 2,74,112.

4.

When the appeal was called for hearing, neither the assessee nor any one was present on behalf of the assessee to represent the case despite service of notice. Even, there is no application filed by the assessee seeking adjournment of hearing. In such circumstances, we consider it appropriate to dispose of the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.

5.

The learned Departmental Representative submitted, before the Assessing Officer the assessee did not produce any evidences for which the Assessing Officer proceeded to complete the assessment to 4 Shri Mintu Sayermal Jain the best of his judgment and added back 12.5% of the non–genuine purchases. She submitted, for the first time the assessee made a claim before learned Commissioner (Appeals) that she has not made the purchases during the year. Merely because the Assessing Officer did not offer his comment on the submissions made by the assessee, learned Commissioner (Appeals) without making any enquiry himself has deleted the addition, which is improper.

6.

We have heard the learned Departmental Representative and perused the material on record. It is evident, though, the Assessing Officer has treated the purchases as non–genuine, however, ultimately he has restricted the addition to 12.5% of such purchases. It is also evident, during the assessment proceedings, as per the Assessing Officer’s own admission, the husband of the assessee had appeared from time–to–time. Be that as it may, in the course of proceedings before learned Commissioner (Appeals), the assessee had specifically pleaded that during the year under consideration, she had not made the disputed purchases from the concerned parties and to support such pleading, the assessee had also furnished the extracts of purchase register. It is further evident, the submissions made by the assessee and evidences filed were forwarded to the Assessing Officer for verification and examination of assessee’s claim. As observed by learned Commissioner (Appeals), the Assessing Officer did not furnish

5 Shri Mintu Sayermal Jain any report either accepting or refuting assessee’s claim. In the absence of any adverse report of the Assessing Officer, learned Commissioner (Appeals) ultimately deleted the addition made by the Assessing Officer. In our view, when the assessee has claimed that she has not made any purchases from the concerned parties during the year under consideration, such claim has to be verified by the Assessing Officer. In fact, learned Commissioner (Appeals) had also directed the Assessing Officer to verify assessee’s claim. However, the Assessing Officer has chosen to remain silent on assessee’s claim. In such circumstances, in the absence of any adverse report from the Assessing Officer, the claim of the assessee that she had not effected the disputed purchases from the concerned parties has to be accepted. That being the case, we do not find any infirmity in the decision of learned Commissioner (Appeals) on the issue. Accordingly, grounds are dismissed.

7.

In the result, appeal stands dismissed. Order pronounced in the open Court on 17.01.2020

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →