M/s. Nandan Associates, Pune V. Income-tax Officer, Ward - 3(1), Pune

ITA 1106/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7746 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 20-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase
• Section: 143(3); 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1 10 6 /P U N/201 8 / ASSESSMENT YEAR : 20 11 - 12 M/S. NANDAN ASSOCIATES, FLAT NO.1, NANDADEEP APARTMENTS, S.NO.82 - 2, PRABHAT ROAD, ERANDWANE, PUNE 411004 PAN : A AFFN6713N ....... / APPELLANT / V/S. INCOME TAX OFFICER , WARD 3( 1 ) , PUNE / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : S HRI RAJESH GAWALI / DATE OF HEARING : 0 9 - 01 - 2019 / DATE OF PRONOUNCEMENT : 15 - 01 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3 , PUNE DATED 16 - 03 - 201 8 FOR THE ASSESSMENT YEAR 20 11 - 12 . 2 ITA NO .1106/PUN/2018, A.Y. 2011 - 12 2. THE ASSESSEE IN APPEAL HAS RAISED TWO GROUNDS. IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENT U/S 148 OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) . IN GROUN D NO.2, THE ASSESSEE HAS ASSAILED UPHOLDING ADDITION OF 3,71,494/ - ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 3. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF ASSESSEE SUBMITTED AT THE OUTSET THAT HE IS NOT PRESSING GROUND NO.1. 3.1 IN RESPECT OF GROUND NO.2, THE LD. AR SUBMITTED THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND IS A PROMOTER AND BUILDER. THE ASSESSMENT OF ASSESSEE FOR ASSESSMENT YEAR 2011 - 12 WAS REOPENED TO EXAMINE ALLEGED HAWALA PURCHASES MADE BY THE ASSESSEE FROM SIDDHI VINAYAK CORPORATION, A SUSPICIOUS HAWALA OPERATOR. THE ASSESSEE HAD PURCHASE D GRANITE FROM THE SAID PARTY. THE ASSESSEE IN ORDER TO SUBSTANTIATE GENUINENESS OF PURCHASES, HAD PRODUCED VARIOUS DOCUMENTS BEFORE THE ASSESSING OFFICER INCLUDING INVOICE, LEDG ER ACCOUNTS, OCTROI RECEIPTS, ETC. HOWEVER, THE ASSESSING OFFICER DIS - BELIEVED THE DOCUMENTS PRODUCED BY THE ASSESSEE ON THE GROUND OF MISMATCH OF AMOUNT IN OCTROI RECEIPTS AND THE INVOICE. THUS, THE ASSESSING OFFICER MADE ADDITION OF 3,71,494/ - I.E. 2 5% OF ALLEGED HAWALA PURCHASES. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 22.02.2016 PASSED U/S 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX 3 ITA NO .1106/PUN/2018, A.Y. 2011 - 12 (APPEALS) WITHOUT APPRECIATING THE DOCUMENTS ON RECORD FURNISHED BY THE ASSESSEE, CONFIRMED THE ADDITION. 5. THE LD. AR SUBMITTED THAT A PERUSAL OF IMPUGNED ORDER WOULD SHOW THAT THE ASSESSEE HAD FURNISHED A COPY OF CHALLAN RECEIPT INDICATING THAT THE MATERIAL WAS RECEIVED AT SI T E. A COPY OF SAMPLE CHALLAN IS AT PAGE 4 OF PAPER BOOK. THE MATERIAL RECEIPT CLEARLY INDICATES THE VEHICLE NUMBER VIDE WHICH THE MATERIAL WAS TRANSPORTED AND BEARS THE SIGNATURES OF STORE INCHARGE AND SITE INCHARGE. THE LD. AR FURTHER POINTED THA T VEHICLE NUMBER ON OCTROI RECEIPT IS SAME THAT HAS BEEN MENTIONED ON THE CHALLAN. THE DATE OF OCTROI RECEIPT , CHALLAN AND MATERIAL RECEIPT IS THE SAME I.E. 07 - 01 - 2011. THUS, IT IS NOT A CASE WHERE THE ASSESSEE HAD FAILED TO PRODUCE RELEVANT DOCUMENTS T O SHOW THE GENUINENESS OF PURCHASES. THE PAYMENTS FOR PURCHASES FROM ALLEGED HAWALA DEALER WERE THROUGH BANKING CHANNEL . I T IS NOT THE CASE OF REVENUE THAT MONEY HAS TRAVELLED BACK TO THE ASSESSEE IN CASH. 6. ON THE OTHER HAND, SHRI RAJESH GAWALI REPRES ENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION . THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE COGENT EVIDENCE IN SUPPORT OF PURCHASES MADE FROM HAWALA OPERATOR. THE LD. DR FURTHER SUBMITTED THAT THE CASE OF ASSESSEE MAY BE CONSIDERED IN THE LIGHT OF THE DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF BUNCH OF A PPEALS WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, FOR ASSESSMENT YEAR 2010 - 11, DECIDED ON 28 - 04 - 2017 . 4 ITA NO .1106/PUN/2018, A.Y. 2011 - 12 7. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE SOLITARY ISSUE RAISED IN THE PRESENT APPEAL IS WITH RESPECT TO ADDITION OF 3,71,494/ - ON ACCOUNT OF BOGUS PURCHASES. 8. THE LD. AR STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NO.1. ACCORDINGLY, THE SAME IS DIS MISSED AS NOT PRESSED. 9. IN GROUND NO.2 OF THE APPEAL, THE ASSESSEE HAS ASSAILED ADDITION OF 3,71,494/ - ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE LD. AR DEMONSTRATED THAT THE ASSESSEE HAS FURNISHED SAMPLE DOCUMENTS BEFORE THE AUTHORITIES BELOW TO SHO W THE GENUINENESS OF PURCHASES. THE ASSESSEE HAS FILED SAME SET OF DOCUMENTS BEFORE THE TRIBUNAL. A CLOSE EXAMINATION OF THE DOCUMENTS SHOW , THAT THE MATERIAL RECEI PT, INVOICE AND OCTROI RECEIPT BEAR THE SAME DATE AND SAME VEHICLE NUMBER, HOWEVER, THERE IS MISMATCH IN THE VALUE OF MATERIAL DISCLOSED IN OCTROI RECEIPT AND THE VALUE OF MATERIAL MENTIONED IN THE INVOICE. TAKING INTO CONSIDERATION ENTIRETY OF THE F ACTS AND TAKING CUE FROM THE DECISION RENDERED IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT (SUPRA) , WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION TO THE EXTENT OF 10% OF ALLEGED BOGUS PURCHASES OVER AND ABOVE GP RATE DECLARED BY ASSESSEE , DESERVES TO BE SUSTAINED. THE GROUND NO.2 IS PARTLY ALLOWED , ACCORDINGLY . 5 ITA NO .1106/PUN/2018, A.Y. 2011 - 12 10. THE GROUND NO.3 IS GENERAL IN NATURE AND HENCE, NEEDS NO ADJUDICATION. THE APPEAL OF ASSESSEE IS PARTLY ALLOWED I N THE TERMS AFORESAID. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON TUESDAY , THE 15 TH DAY OF JANUARY, 2019 . SD/ - SD/ - ( R.S. SYAL ) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 1 5 T H JANUARY, 2019 GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3 , PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 2 , PUNE 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // // TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE