PARVEZ MUSA KHAN, MUMBAI V. ASST CIT PALGHAR CIR PALGHAR, PALGHAR

CO 245/MUM/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3252 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL LD
• Assessee Lawyers: ANIL SATHE LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA.NOS.5600 &5601/MUM/2015, CO.NOS.245 &246/MUM/20 17 PARVEZ MUSA KHAN ASSESSMENT YEARS-2010-2011,2011-2012 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5600 & 5601/MUM/2015 ( / ASSESSMENT YEARS: 2010-2011 & 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX PALGHAR CIRCLE, PALGHAR AAYKAR BHAVAN IT OFFICE BIDCO ROAD PALGHAR-401 404 / VS. PARVEZ MUSA KHAN (PROP. OF M/S AMAN STREET) SURVEY NO.116/1 SHAKTI UDYOG NAGAR MANOR ROAD OPP. JUNGLE RESORT PALGHAR (E) - 40 1 404 ./ ./PAN/GIR NO. AFMPK-0603-G ( /APPELLANT ) : ( !' / RESPONDENT ) & C.O. NOS. 245 & 246/2017 [ARISING OUT OF ITA NO.5600 & 5601/MUM/2015] ( / ASSESSMENT YEARS: 2010-2011 & 2011-2012) PARVEZ MUSA KHAN (PROP. OF M/S AMAN STREET) SURVEY NO.116/1 SHAKTI UDYOG NAGAR MANOR ROAD OPP. JUNGLE RESORT PALGHAR (E) -401 404 / VS. ASSISTANT COMMISSIONER OF INCOME TAX PALGHAR CIRCLE, PALGHAR AAYKAR BHAVAN IT OFFICE BIDCO ROAD PALGHAR-401 404 ./ ./PAN/GIR NO. AFMPK-0603-G ( /APPELLANT ) : ( !' / RESPONDENT ) A SSESSEE BY : ANIL SATHE , LD. AR RE VENUE BY : RAJAT MITTAL, LD. DR / DATE OF HEARING : 09/10/2017 / : 08/11/2017 ITA.NO.5600 &5601/MUM/2015, CO.NO.245 &246/MUM/2017 PARVEZ MUSA KHAN ASSESSMENT YEARS-2010-2011,2011-2012 2 DATE OF PRONOUNCEMENT / O R D E R PER BENCH 1. THE CAPTIONED APPEALS BY REVENUE FOR ASSESSMENT YEARS [AY] 2010-11 & 2011-12 ASSAILS SEPARATE ORDER OF FIRST A PPELLATE AUTHORITY. THE ASSESSEE HAS FILED CROSS OBJECTIONS AGAINST THE SAME. THE REGISTRY HAS NOTE THAT THE CROSS OBJECTIONS HAVE BEEN FILED WITH A DELAY OF 89 DAYS. EXPLAINING THE DELAY, THE ASSESSEE HAS FILED CONDONATION REQUEST DULY SUPPORTED BY AFFIDAVIT WHERE THE DELAY HAS BEE N ATTRIBUTED TO BONA- FIDE BELIEF THAT THE TRIBUNALS DECISION OF EARLIER YEAR SHALL AUTOMATICALLY BE APPLIED TO THE IMPUGNED ASSESSMENT YEARS. SINCE, NO SERIOUS OBJECTION IS RAISED BY THE REVENUE AGAINST THE SAME AND KEEPING IN VIEW THE QUANTUM OF DELAY, THE DELAY IS CONDONED AND WE PROCEED FURTHER TO DECIDE THE APPEALS ON MERITS. 2. FIRST WE TAKE UP REVENUES APPEAL ITA NO.5600/MU M/2015 & ASSESSEES CROSS OBJECTION CO. NO. 245/MUM/2017 FOR AY 2010-11 WHICH CONTEST THE ORDER OF LD. COMMISSIONER OF INCO ME-TAX (APPEALS)-3 [CIT(A)], MUMBAI, APPEAL NO. 235-THN/14-15 DATED 11/09/2015 . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX, PALGHAR CIRCLE U/S 143( 3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 ON 28/03/2014. 3.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING OF IRON & STEEL UNDER PROPRIETORSHIP CONCERN NAMELY AMAN STEEL WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON ITA.NO.5600 &5601/MUM/2015, CO.NO.245 &246/MUM/2017 PARVEZ MUSA KHAN ASSESSMENT YEARS-2010-2011,2011-2012 3 28/03/2014 AT RS.1,02,40,630/- AFTER ADDITION OF CE RTAIN BOGUS PURCHASES FOR RS.87,15,900/-. THE ORIGINAL RETURN WAS FILED ON 23/09/2010 AT RS.15,24,730/- WHICH WAS PROCESSED U/S 143(1). THE SOLITARY ISSUE INVOLVED IN THE APPEAL IS ADDITION AGAINST BOGUS PURCHASES . 3.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.87,15,900/- FROM EIGHT SUCH PARTIES. CONSEQUENTL Y, NOTICE U/S 148 DATED 22/03/2013 WAS ISSUED TO THE ASSESSEE WHICH W AS FOLLOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1). 3.3 NOTICE U/S 133(6) ISSUED TO ALLEGED BOGUS SUPPLIERS TO CONFIRM THE PURCHASE TRANSACTIONS REMAINED UN-SERVED BY POSTAL AUTHORITIES. IN THE MEANTIME, A SURVEY ACTION WAS CARRIED OUT ON THE AS SESSEE ON 11/02/2013 TO VERIFY THE RECORDS IN RESPECT OF BOGUS PURCHASES MADE BY THE ASSESSEE. THE ASSESSEE WAS FOUND TO BE IN POSSE SSION OF INVOICES ONLY BUT COULD NOT SUBSTANTIATE THE PHYSICAL DELIVE RY OF MATERIAL WITH DOCUMENTARY EVIDENCES . THE LD. AO ALSO NOTED VARIOUS DISCREPANCIES IN THE TRANSPORTATION DETAILS PROVIDED ON THE INVOICES WHICH LED THE LD. AO TO DISBELIEVE THE SAID PURCHASES AND ACCORDINGLY, T HE SAME WERE ADDED TO THE INCOME OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 11/09/2 015 WHERE THE LD. CIT(A) AFTER APPRECIATING THE FACTUAL MATRIX AND BY PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS RESTRICTED THE IMPU GNED ADDITIONS TO ITA.NO.5600 &5601/MUM/2015, CO.NO.245 &246/MUM/2017 PARVEZ MUSA KHAN ASSESSMENT YEARS-2010-2011,2011-2012 4 25% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US WHEREAS THE ASSESSEE, VIDE HIS CRO SS OBJECTIONS, INTER- ALIA, HAS PLEADED TO RESTRICT THE SAME TO THE EXTENT OF GROSS PROFIT MARGIN I.E..6.7% EARNED BY THE ASSESSEE DURING THE IMPUGNE D AY. 5. THE RESPECTIVE REPRESENTATIVES DREW OUR ATTENTIO N TO FACT THAT SIMILAR ISSUE AROSE IN THE CASE OF THE ASSESSEE IN IMMEDIATELY PRECEDING AY 2009-10 AND THE TRIBUNAL VIDE ITA NO. 5599/M/201 5 & CO. NO.127/M/2016 ORDER DATED 22/09/2016 RESTRICTED THE IMPUGNED ADDITIONS TO GROSS PROFIT MARGIN EARNED BY THE ASSESSEE. BOTH THE REPRESENTATIVES FAIRLY CONCEDED THAT SINCE A VIEW H AS ALREADY BEEN TAKEN BY THE BENCH, THE SAME VIEW MAY BE TAKEN IN THE MAT TER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE CITED ORDER OF THE TRIBUNAL. WE FIND THAT TRIBUNAL, ON IDENTICAL S ET OF FACTS, IN AY 2009- 10 HAS RESTRICTED THE IMPUGNED ADDITIONS TO 6.6% I. E. GROSS PROFIT MARGIN EARNED BY THE ASSESSEE. THERE BEING NO CHANGE IN FA CTS OR CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE SAME, WE RESTRICT THE IMPUGNED ADDITIONS TO 6.7% I.E. GROSS PROFIT MARGIN OF THE ASSESSEE IN THE IMPUGNED AY. IN OTHER WORDS, THE ADDITION IS RESTRI CTED TO 6.7% OF ALLEGED BOGUS PURCHASES OF RS.87,15,900/- WHICH COMES TO RS.5,83,965/-. RESULTANTLY, THE REVENUES APPEAL ST ANDS DISMISSED WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE STAND S PARTLY ALLOWED. 7. THE ASSESSEE, IN AY 2011-12, HAS SIMILARLY BEEN SADDLED WITH ADDITIONS ON ACCOUNT OF BOGUS PURCHASES FOR RS.94,90,070/- IN AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 ON 28/03/2014. THE SAME HAS BEEN RESTRICTED TO 25% AGAINST WHICH THE REVENU E IS IN APPEAL ITA.NO.5600 &5601/MUM/2015, CO.NO.245 &246/MUM/2017 PARVEZ MUSA KHAN ASSESSMENT YEARS-2010-2011,2011-2012 5 BEFORE US WHEREAS THE ASSESSEE HAS FILED CROSS OBJE CTIONS AGAINST THE SAME. SINCE FACTS AND CIRCUMSTANCES ARE SIMILAR, TA KING THE SAME VIEW, WE RESTRICT THE SAME TO 5.8% OF ALLEGED BOGUS PURCHASES WHICH COMES TO RS.5,50,424/-. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISSED WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE STAND S PARTLY ALLOWED. 8. FINALLY, ITA NOS. 5600 & 5601/MUM/2015 STANDS DI SMISSED WHEREAS CO. NO.245 & 246/MUM/2017 STANDS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH NOVEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : .10.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. !$, , , , / DR, ITAT, MUMBAI 6. -. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI