Itxa/751/2016 Of Principal Commissioner Of Income Tax, 12, Mumbai v. M/S Mangalam Infra Development Pvt. Ltd

Priya Soparkar 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.751 OF 2016 Principal Commissioner of Income Tax … Appellant V/s. M/s Mangalam Infra Development Pvt. Ltd.… Respondent --- Mr.Arvind Pinto for the Appellant. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : DECEMBER 10, 2018. P.C.:- 1.This Appeal under Section 260-A of the Income Tax Act,1961 (the Act), challenges the order dated 22[nd ]July, 2015passed by the Income Tax Appellate Tribunal (the Tribunal). ThisAppeal relates to Assessment Year 2010-11. 2.The Revenue urges the following question of law for ourconsideration: “Whether in facts and circumstances of the case andin law was the Tribunal justified in substitutingthe best judgment of the CIT (A) with its ownwithout assigning any specific reason when it accepts the rejection of books under Section 145 ofthe Act? 3.The respondent is carrying on business of Civil Contractor. For the subject assessment year, the respondent filed its return ofincome declaring its income of Rs.36.34 lakhs. The assessmentwas finalized by order dated 28[th] February, 2013 under Section143(3) of the Act determining the income at Rs.3.45 crores. Thisaddition was essentially on the ground that the purchases madeby the assessee in respect of seven parties were found to be notgenuine. This led to rejecting the books of account anddisregarding the entire purchase of Rs.3.09 croes made from theseven parties during the year by order dated 28[th] February, 2013passed under Section 143(3) of the Act. 4.Being aggrieved, respondent-assessee filed appeal to theCommissioner of Income Tax (Appeal) (CIT(A)). However, byorder dated 1[st] November, 2013 of the CIT (A) it was held thatbearing in mind the gross profit/net profit percentage for theearlier years the addition can be sustained at Rs.1.23 crores andnot at Rs.3.09 cores. Thus, partly allowed the appeal of the respondent. 5.Being aggrieved by order dated 1[st] November, 2013, therespondent filed an appeal to the Tribunal. The impugned orderdated 22[nd] July, 2015 of the Tribunal noted that it was the caseof the respondent that all purchases were made by paymentthrough Banks an opportunity to cross-examine sought by therespondent ought to have been given. This opportunity of cross-examination was not given only because the Assessing Officer wasrunning short of time to complete the account. It further holdsthat the net profit rate of 11 % the entire purchases madeduring the year was applied by the CIT (A) to determine theaddition. Thus, the Tribunal restricted to only 11% out of thepurchases of Rs.3.09 crores made from the seven parties. This inview of the fact that consumption of goods is not denied/disputed. 6.We find the impugned order of the Tribunal has taken aview on facts which is possible view. It cannot be said to beperverse. Priya Soparkar 7.In the above facts, the proposed question does not give rise to any substantial question of law. 8.Accordingly, the appeal dismissed. No order as to costs. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)….