M/S.STRIPCO SPRINGS PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER 13(3)(3), MUMBAI

ITA 1000/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6791 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Keywords: Bogus purchase; Revised return; Reassessment proceedings
• Section: 133(6); 147; 148; 2

Judgement Text

ITA.NO.1000/MUM/2018 STRIPCO SPRINGS PRIVATE LIMITED ASSESSMENT YEAR- 2011-12 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1000/MUM/2018 ( / ASSESSMENT YEAR:2011-12) STRIPCO SPRINGS PRIVATE LTD. 7/8, NEELKAMAL ROSHAN NAGAR BORIVALI-400 092 / VS. INCOME TAX OFFICER - 13(3)(3) ROOM NO.412 4 TH FLOOR, AAYKAR BHAVAN M.K.ROAD, MUMBAI- 400 020 ! ./ ./PAN/GIR NO. AAACS-7984-A ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : N. HEMALATHA, LD. DR / DATE OF HEARING : 22/05/2018 / DATE OF PRONOUNCEMENT : 22/05/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-21 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-21/ITO-13(2)(4)/IT- 149/2016-17 DATED 20/11/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER-13(2)(4), MUMBAI [AO] U/S 14 3(3) ITA.NO.1000/MUM/2018 STRIPCO SPRINGS PRIVATE LIMITED ASSESSMENT YEAR- 2011-12 2 READ WITH SECTION 147 OF THE INCOME TAX ACT,1961 ON 21/03/2016 WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN DETERMI NED AT RS.9.40 LACS AFTER CERTAIN ADDITIONS AS AGAINST NIL REVISED RETURN FILED BY THE ASSESSEE ON 14/01/2012 WHICH WAS PROCESSED U/S 143( 1). THE ISSUE UNDER APPEAL IS QUANTUM ADDITION AGAINST CERTAIN ALLEGED BOGUS PURCHASES. NONE HAS APPEARED FOR ASSESSEE DESPITE NOTICE AND THEREFORE, LEFT WITH NO OPTION, WE PROCEED TO DISPO SE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEA RING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 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.28,41,238/- FROM TWO SUCH PARTIES. CONSEQUENTLY, STATUTORY NOTICE U/S 148 DATED 11/03/2015 WAS ISSUED TO THE ASSESSEE WHI CH WAS FOLLOWED BY NOTICES U/S 143(2) AND 142(1). 2.2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE, INTER-ALIA, SUBMITTED LEDGER EXTRACTS BANK STATEMENT EVIDENCING PAYMENT TO THE SUPPLIERS, COPIES OF INVOICES ETC. TO PROVE THE GEN UINENESS OF PURCHASES. HOWEVER, NOTICES ISSUED U/S 133(6) TO BOTH THE SUPP LIERS TO CONFIRM THE TRANSACTIONS ELICITED NO RESPONSE. THE ASSESSEE ALS O FAILED TO PRODUCE ANY OF THE PARTY TO CONFIRM THE TRANSACTIONS. THE F ACTUAL MATRIX LED THE LD. AO TO TREAT THE PURCHASES AS BOGUS PURCHASES AGAINST WHICH ESTIMATED ADDITIONS @30% AMOUNTING TO RS.8.52 LACS WERE MADE IN THE HANDS OF THE ASSESSEE. ITA.NO.1000/MUM/2018 STRIPCO SPRINGS PRIVATE LIMITED ASSESSMENT YEAR- 2011-12 3 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 20/11/2 017 WHEREIN LD. CIT, WHILE UPHOLDING THE REASSESSMENT PROCEEDINGS, REDUCED THE ESTIMATED ADDITIONS TO 12.5% AGAINST WHICH THE ASSE SSEE IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS PLACED RELIANCE ON THE STAND OF LOWER AUTHORITIES. 4. IN SO FAR AS THE GROUND OF VALIDITY OF REASSESSM ENT PROCEEDINGS AS RAISED BY THE ASSESSEE IS CONCERNED, WE FIND NO MER IT IN THE SAME SINCE THE RETURN WAS PROCESSED U/S 143(1) AND THE NEW TAN GIBLE MATERIAL CAME INTO THE POSSESSION OF LD. AO IN THE SHAPE OF INFOR MATION FROM CONCERNED AUTHORITIES WHICH POINTED AT ESCAPEMENT O F INCOME AND THEREFORE, THE JURISDICTION WAS VALIDLY ASSUMED BY LD. AO. 5. SO FAR AS QUANTUM OF ADDITIONS IS CONCERNED, WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITH OUT PURCHASE /CONSUMPTION OF MATERIAL SINCE THE ASSESSEE WAS ENG AGED AS MANUFACTURER OF SHEET METAL COMPONENTS. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENU E AND THE PAYMENTS WERE THROUGH BANKING CHANNELS. THE ASSESSE E WAS IN POSSESSION OF PRIMARY PURCHASES DOCUMENTS. AT THE S AME TIME, THE ASSESSEE COULD NOT CONCLUSIVELY SUBSTANTIATE THE PU RCHASES MADE BY HIM AND FAILED TO PRODUCE ANY OF THE PARTY TO CONFI RM THE TRANSACTIONS. ALL THESE FACTORS CAST A SERIOUS DOUBT ON ASSESSEE S CLAIM. THEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE , WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTI ONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHA SES, ITA.NO.1000/MUM/2018 STRIPCO SPRINGS PRIVATE LIMITED ASSESSMENT YEAR- 2011-12 4 WHICH LD. CIT(A) HAS RIGHTLY DONE. THEREFORE, FINDI NG THE SAME IN ORDER, WE DISMISS THE ASSESSEES APPEAL. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MAY, 2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22. 05.2018 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