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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY
Aforesaid appeal by the assessee is against order dated 6th August 2016, passed by the learned Commissioner of Income Tax (Appeals)–41, Mumbai, for the assessment year 2011–12.
The dispute in the present appeal is confined to the addition made on account of non–genuine purchases. Of–course, the assessee has raised a legal ground challenging the validity of re–opening of 2 Milan Sevantilal Doshi assessment under section 147 of the Income-tax Act, 1961 (for short "the Act").
When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case. Accordingly, I proceed to dispose off the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material on record.
Brief facts are, the assessee is an individual. For the assessment year under dispute, the assessee filed his return of income on 30th September 2011, declaring total income of ` 10,01,290. Assessment in case of the assessee was originally completed under section 143(3) of the Act vide order dated 18th March 2014, assessing the total income of ` 10,41,960. Subsequently, 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 bills provided by certain parties, 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 of ` 1,28,33,860, claimed to have been made from MICO Steels. The Assessing Officer found that the assessee is engaged in the business of re–selling DEPB
3 Milan Sevantilal Doshi license through his proprietorship concern M/s. Milan Overseas. In response to the query raised by the Assessing Officer, the assessee furnished purchase bills, corresponding sale bill, ledger account copy, bank statement, etc. To further verify authenticity of assessee’s claim, the Assessing Officer issued notice under section 133(6) of the Act to the selling party which returned back unserved. Though, the Assessing Officer called upon the assessee to produce the concerned party or to provide its current address, however, the assessee was unable to comply with the aforesaid request of the Assessing Officer. Thus, ultimately, the Assessing Officer held that the purchases claimed to have been made by the assessee are not genuine. However, considering the fact that the assessee has shown corresponding sales, the Assessing Officer disallowed an amount of ` 12.5% out of the purchases of ` 1,28,33,860, and added back to the income of the assessee. Though, the assessee challenged the aforesaid addition before learned Commissioner (Appeals), however, he was not successful.
Heard the learned Departmental Representative and perused the material on record. Undisputedly, the Assessing Officer had in his possession specific information indicating that the assessee had shown purchases from a party which has been identified as a hawala operator by the Sales Tax Department. Undisputedly, the aforesaid information
4 Milan Sevantilal Doshi received by the Assessing Officer is a tangible material on the basis of which the Assessing Officer was competent to form a belief that income has escaped assessment. That being the case, there cannot be any question with regard to the authority of the Assessing Officer in re–opening the assessment under section 147 of the Act. Having held so, now it is necessary to deal with the merits of the issue. Undisputedly, neither before the Assessing Officer nor before learned Commissioner (Appeals) the assessee was able to conclusively prove the genuineness of purchases either by producing the party or furnishing any confirmation from the concerned party. Even the assessee was unable to furnish the latest address of the party. Thus, the source from which the assessee had claimed to have made the purchases remained unverified. In such circumstances, assessee’s claim that the purchases from the concerned party are genuine is unacceptable. Of–course, the assessee had furnished the quantitative details of purchase and sales for which the Assessing Officer instead of adding the entire purchases had restricted the addition to the profit element by estimating @ 12.5% of the non–genuine purchases. In my view, the aforesaid decision of the Assessing Officer is in accordance with the view expressed by the Tribunal in similar nature of cases, hence, requires no interference from this forum. Accordingly, the 5 Milan Sevantilal Doshi addition made is sustained. Grounds raised by the assessee are dismissed.
In the result, appeal stands dismissed. Order pronounced in the open Court on 26.09.2019