RAJU & RAJU ELECTRONICS PVT LTD., MUMBAI V. ITO WARD 5(3)(1), MUMBAI

ITA 1047/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6266 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VARMA LD
• Assessee Lawyers: ZAKIRH USEN M KAPASI LD
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI C.N. PRASAD , JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1 . ./ I.T.A. NO. 1047 /MUM/20 20 ( / ASSESSMENT YEAR : 2009 - 10 ) RAJU & RAJU ELECTRONICS PVT. LTD. DONGRE BUILDING, 384, DR. D. B. MARG, LAMI NGTON ROAD, MUMBAI - 400 007 / VS. ITO WARD - 5(3)(1 ) , R. NO. 21, 3 RD FLOOR B - WING, MITTAL COURT, NARIMAN POINT MUMBAI - 400 021 ./ ./ PAN/GIR NO . A A BCR - 6589 - F ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI ZAKIRH USEN M. KAPASI, LD. AR REVENUE BY : MS. SMITA VARMA LD. SR. DR / DATE OF HEARING : 02 /09 /2021 / DATE OF PRONOUNCEMENT : 02/09/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR AY 20 09 - 10 ARISES OUT OF THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 10 MUMBAI [CIT(A)] DATED 27/11/2019 IN THE MATTER OF ASSESSMENT FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) R.W.S. 147 ON 26/11/2014. THE SOLE SUBJECT MATTER OF APPEAL IS ESTIMATION OF ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. HAVING HEARD RIVAL SUBMISSIONS AND AFTER PERUSAL OF MATERIAL ON RECORD, OUR ADJUDICATION WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE IS STATE D TO BE ENGAGED IN TRADING OF ELECTRONIC ITEMS. 3. THE CASE WAS REOPENED PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA ON THE BASIS OF WHICH IT WAS ALLEGED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS.5.94 LACS FROM 2ENTITIES AS DETAILED IN PARA 4 OF THE ORDER. NOTICES ISSUED U/S 133(6) TO THESE SUPPLIERS DID NOT ELICIT ANY SATISFACTORY RESPONSE. THE ASSESSEE FURNISHED COPIES OF PURCHASE INVOICES, SALES INVOICES & BANK STATEMENTS ETC. HOWEVER, SINCE THE ASSESSEE COULD NOT PROVE THE MOVEMENT OF GOODS AND ALSO COULD NOT PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF TRANSACTIONS, THESE PURCHASE WERE DISALLOWED AND ADDED BACK TO ASSESSEES INCOME. 4. THE LD. CIT(A) NOTED THAT THE ASSESSEE COULD NOT PROVE THE GENUI NENESS OF THE EXPENDITURE AND THEREFORE, THE ADDITIONS WERE TO BE UPHELD. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. IT COULD BE SEEN THAT THE ASSESSEE WAS A TRADER AND THEREFORE, THERE COULD BE NO SALES WITHOUT ACTUAL PURCHASE OF MATERIAL. THE ASSESSEE WAS IN POSSESSION OF PURCHASE INVOICES AND THE PAYMENT TO THE SUPPLIERS WAS THROUGH BANKING CHANNELS. THE ASSESSEE ALSO PROVED THE DISPOSAL OF PURCHASED MATERIAL DURING ASSESSMENT PROCEEDINGS. THEREFORE, IT COULD BE PRESUMED THAT THE GOODS WE RE PROCURED FROM GREY MARKET WHEREAS THE BILLS WERE PROCURED FROM THESE SUPPLIERS. THEREFORE, TO PLUG THE LEAKAGE OF REVENUE, WE RESTRICT THE ADDITION TO THE EXTENT OF 12.5% OF DISPUTED PURCHASES OF RS.5,94,698/ WHICH COMES TO RS.74,337/ - . THE BALANCE ADDI TION STAND DELETED. 3 6. THE APPEAL STAND PARTLY ALLOWED. ORDER PRONOUNCED ON 02 ND SEPTEMBER, 2021. SD/ - SD/ - ( C. N. PRASAD ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/09/2021 SR.PS, DHANANJAY / 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.