RATNARAM K CHOUDHARY,MUMBAI vs. ITO 19(3)(1), MUMBAI

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ITA 2583/MUM/2017Status: DisposedITAT Mumbai31 August 2018AY 2009-103 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CIT(A)'s action of restricting the addition to 6.5% was already confirmed by the Tribunal in the Revenue's own appeal for the same assessment year. Therefore, the assessee's appeal to reduce the addition further was not found to have merit.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming the reopening of assessment and restricting estimated additions to 6.5% of alleged non-genuine purchases. The assessee claimed the purchases were genuine.

What were the issues?

Whether the reopening of assessment was valid and if the estimated addition on non-genuine purchases could be reduced below 6.5%.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 145(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM Shri Ratnaram K. Choudharay

For Respondent: Shri Chaitanya Anjaria
Hearing: 08/08/2018Pronounced: 31/08/2018

आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)- 30, Mumbai dated 17/02/2017 for A.Y.2009-10 in the matter of the order passed u/s.143(3) of the IT Act. The assessee has raised the following grounds of appeal: 1) The Learned Commissioner of Income tax (Appeals) - 30, Mumbai on the facts and in the circumstances of the case and in Law erred in confirming the action of the Assessing Officer of reopening the assessment u/s. 147 of the Act and issuing notice u/s. 148 of the Act. 2) The Learned Commissioner of Income tax (Appeals) - 30, Mumbai on the facts and in the circumstances of the case and in Law erred in restricting estimated additions @ 6.5% of total alleged non-genuine 2 M/ 17 Shri Ratnaram K. Choudharay purchase of Rs. 3,61,50,427/- in spite of the fact that the appellant has established that the total purchases made of Rs. 3,61,50,427/- were genuine purchases. 3) The appellant prays to leave, add, amend or alter the above grounds of appeal on or before the final date of hearing.

2.

Rival contentions have been heard and record perused.

3.

From the record we found that action of CIT(A) in restricting the addition to the extent of 6.5% have been confirmed by the Tribunal in assessee’s own case for the very same assessment year in the appeal filed by the Revenue in dated 25/10/2017. Precise observation of the Tribunal was as under:- “We have heard the Ld. D.R., perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and are of the considered view that in the backdrop of the fact that the notices issued by the A.O to the aforementioned 13 parties were returned by the postal authorities with the remarks 'not known', 'left', etc., the very existence of the said parties came under serious doubts. We further find that it remains as a matter of fact that the assessee even otherwise had failed to substantiate the genuineness and veracity of the aforementioned purchase transactions on the basis of irrefutable documentary evidences, viz. delivery challans, transportation receipts, octroi receipts, receipt of weigh bridge for weighing of goods, excise gate pass, goods inward register maintained at godown/warehouse/storage house etc., therefore, the A.O being of the considered view that the genuineness of the purchase transactions could not be verified, had thus rightly rejected the books of account of the assessee by invoking the provisions of Sec. 145(3) of the 'Act'. We find that after rejection of the books of account the CIT(A) had fairly restricted the addition in the hands of the assessee @ 6.5% of the total purchases aggregating to Rs. 3,61,50,427/- which were claimed by the assessee to have been made from the aforementioned 13 parties. We are of the considered view that the adoption of the rate of 6.5% by the CIT(A) is well supported on the basis of the reasoning adopted by the Hon'ble High Court of Gujarat in the case of CIT Vs. Simit P. Sheth (2013) 38 Taxmann.com 385 (Guj). We are of the considered view that the CIT(A) on the basis of his aforesaid reasoning for restricting the disallowance/addition to 6.5% 3 M/ 17 Shri Ratnaram K. Choudharay of the total non-genuine purchases, had also taken due cognizance of the fact that in the case of the assessee for the immediate succeeding years, viz. A.Y. 2010-11 and A.Y. 2011-12 the addition was restricted by the first appellate authority to 6%. We are of the considered view that the CIT(A) in the present case had on the basis of a very well reasoned order restricted the addition in the hands of the assessee to 6.5% of the total purchases aggregating to Rs. 3,61,50,427/- which were claimed by the assessee to have been made from the aforementioned 13 parties, We are persuaded to be in agreement with the view taken by the CIT(A), and finding no reason to dislodge the view taken by him, therefore, uphold his order.

9.

The appeal of the revenue is dismissed.”

4.

As the order of CIT(A) has already been confirmed by the Tribunal in assessee’s own case, in the appeal filed by the Revenue, we do not find any merit in the appeal filed by the assessee in reducing the addition below 6.5%.

5.

In the result, appeal of the assessee is dismissed.

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