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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY
Captioned appeal by the Revenue is against order dated 27th August 2018, passed by the learned Commissioner of Income Tax (Appeals)–9, Mumbai, pertaining to the assessment year 2010–11.
The grounds raised by the Revenue are on the common issue of partial relief granted by learned Commissioner (Appeals) in respect of addition made on account of non–genuine purchases.
Brief facts are, the assessee company is stated to be engaged in the business of trading in pharmaceutical raw materials and chemicals.
2 Minerva Biogenix Pvt. Ltd.
For the assessment year under dispute, the assessee filed its return of income on 15th October 2010, declaring total income of ` 18,58,775. The assessment in case of assessee was originally completed under section 143(3) of the Income-tax Act, 1961 (for short "the Act") vide order dated 26th March 2013, determining the total income at ` 1,31,02,600. Subsequently, on the basis of information received from the Sales Tax Department that purchases worth ` 1,96,38,700, made from three parties viz. Raj Traders, Ajanta Enterprises and Trishna Impex, were non–genuine, as the concerned parties were providing accommodation entries without actual sale of goods, the Assessing Officer re–opened the assessment s 147 of the Act. During the assessment proceedings, the Assessing Officer found that purchases made from Raj Traders and Ajanta Enterprises were already considered for addition in the original assessment completed under section 143(3) of the Act. Therefore, he called upon the assessee to prove the purchases of ` 83,94,880, claimed to have been made from Trishna Impex, through supporting evidence. Further, to verify the genuineness of such purchases, the Assessing Officer issued notice under section 133(6) of the Act which, as alleged by the Assessing Officer, returned back un–served. Thus, ultimately, the Assessing Officer held that the purchases made from Trishna Impex, is not genuine and proceeded estimated profit @ 12.5% of such purchases, which worked out to ` 10,49,360. The aforesaid amount was added
3 Minerva Biogenix Pvt. Ltd. back to the income of the assessee. The assessee challenged the aforesaid addition before the first appellate authority.
Learned Commissioner (Appeals) noticed that while deciding identical issue of addition made on account of non–genuine purchases arising out of original assessment order passed under section 143(3) of the Act, the Tribunal had directed the Assessing Officer to estimate profit @ 8%. Therefore, following the said decision of the Tribunal, he directed the Assessing Officer to restrict the addition to 8%.
I have considered rival submissions and perused material on record. I have also applied my mind to the decisions relied upon by the learned Departmental Representative. As could be seen from the facts discussed by the Assessing Officer, purchases made during the year from three parties were found to be non–genuine as per the information received from the Sales Tax Department. Further, it is seen that purchases from two parties were subject matter of addition in the original assessment order passed for the impugned assessment year. While considering assessee’s appeal on the issue arising out of original assessment order, learned Commissioner (Appeals) had restricted the addition to 0.10%. Against the said decision of learned Commissioner (Appeals), the Revenue came in appeal before the Tribunal. The Tribunal while deciding Revenue’s Appeal in ITA no.133/Mum./2016, dated 1st November 2017, enhanced the addition
4 Minerva Biogenix Pvt. Ltd. to 8% of the non–genuine purchases. While deciding the appeal arising out of the re–assessment proceedings, learned Commissioner (Appeals) has followed the aforesaid decision of the Tribunal and has restricted the addition to 8% of the non–genuine purchases as against 12.5% made by the Assessing Officer. The aforesaid decision of the learned Commissioner (Appeals) being in consonance with the decision of the Tribunal in assessee’s own case and in respect of identical issue, I do not find any infirmity in the decision of learned Commissioner (Appeals). Insofar as the decision relied upon by the learned Departmental Representative, on a careful examination, I find that all these decisions are factually distinguishable, hence, not applicable to the facts of the present case. Accordingly, the grounds raised are dismissed.
In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 13.09.2019