SMT. PINA DIPESH SHAH, MUMBAI V. INCOME TAX OFFICER WARD 30(2)(5), MUMBAI

ITA 1105/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6799 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA.NO.1105/MUM/2018 PINA DIPESH SHAH ASSESSMENT YEAR- 2009-10 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1105/MUM/2018 ( / ASSESSMENT YEAR:2009-10) PINA DIPESH SHAH C/O M.N.VAISHNAV & CO., CA 21, ANANT BUILDING 2 ND FLOOR,217 PRINCESS STREET MUMBAI-400 002 / VS. INCOME TAX OFFICER WARD - 30(2)(5) C-13,5 TH FLOOR PRATYAKSHKAR BHAVAN, BKC MUMBAI- 400 051 ! ./ ./PAN/GIR NO. AUJPS-1335-B ( !# /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] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-41 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-41/IT-285/15-16 DATED 26/12/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED ITA.NO.1105/MUM/2018 PINA DIPESH SHAH ASSESSMENT YEAR- 2009-10 2 BY LD. INCOME TAX OFFICER WARD-30(2)(5), MUMBAI [AO] U /S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT,1961 ON 09/03/2015. WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.20 .90 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS. 7.56 LACS E-FILED BY THE ASSESSEE ON 23/09/2009 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.1,06,70,273/- FROM THREE SUCH ENTITIES. CONSEQUE NTLY, STATUTORY NOTICE U/S 148 DATED 05/03/2014 WAS ISSUED TO THE ASSESSEE WHICH WAS FOLLOWED BY NOTICES U/S 143(2) AND 142(1). THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF TRADING IN IRON & STEEL. 2.2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE, INTER-ALIA, SUBMITTED LEDGER EXTRACTS, DELIVERY CHALLANS, COPIE S OF INVOICES ETC. TO PROVE THE GENUINENESS OF PURCHASES. HOWEVER, NOTICE S ISSUED U/S 133(6) TO CONFIRM THE TRANSACTIONS TO THE AFORESAID PARTIES ELICITED NO SATISFACTORY RESPONSE. MANY DISCREPANCIES WERE FOUN D IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE. THE LD. AO, AFTER APPREC IATING THE FACTUAL MATRIX INCLUDING GROSS PROFIT RATES REFLECTED BY THE ASSESSEE, ESTIMATED THE ADDITIONS AGAINST THE SAME @12.5%, WHICH CAME T O RS.13,33,784/-. ITA.NO.1105/MUM/2018 PINA DIPESH SHAH ASSESSMENT YEAR- 2009-10 3 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 26/12/2 017 WHEREIN LD. CIT OPINED THAT ENTIRE PURCHASES WERE REQUIRED TO B E DISALLOWED SINCE THE ASSESSEE MISERABLY FAILED TO PROVE THE PURCHASE S. THE CONCLUSION OF LD. CIT(A) LED TO AN ENHANCEMENT OF RS.93.36 LACS I N THE HANDS OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN FURTHER APP EAL BEFORE US. THE LD. DR HAS PLACED RELIANCE ON THE STAND OF LD. FIRS T APPELLATE AUTHORITY. 4. UPON CAREFUL CONSIDERATION, WE ARE OF THE CONSID ERED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL SINCE THE ASSESSEE WAS ENGAGED IN TRADING ACTIVITIES. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND T HE PAYMENTS WERE THROUGH BANKING CHANNELS. THE ASSESSEE WAS IN POSSE SSION OF PRIMARY PURCHASES DOCUMENTS AND TO SOME EXTENT, PRODUCED DE LIVERY CHALLANS ALSO. AS EVIDENT FROM THE ORDER OF LD. AO, SOME COR RELATION BETWEEN SALES AND PURCHASES WAS ALSO ESTABLISHED BY THE ASS ESSEE. AT THE SAME TIME, THE ASSESSEE COULD NOT CONCLUSIVELY SUBSTANTI ATE THE PURCHASES MADE BY HIM AND FAILED TO PRODUCE THE SAID PARTY TO CONFIRM THE TRANSACTIONS. MANY DISCREPANCIES WERE FOUND IN THE DELIVERY CHALLANS AND OTHER DOCUMENTS. ALL THESE FACTORS CAST A SERIO US DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, T HE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EM BEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNE D BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. AO HAD RIGHTLY DONE. THEREFORE, THE ACTION OF LD. CIT(A), IN ENHANCING T HE INCOME, IN OUR ITA.NO.1105/MUM/2018 PINA DIPESH SHAH ASSESSMENT YEAR- 2009-10 4 OPINION, WAS NOT JUSTIFIED. THEREFORE, WE RESTORE T HE ORDER OF LD. AO AND CONCUR WITH THE ESTIMATION OF ADDITIONS @12.5%. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. 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