DCIT - 29(2), MUMBAI V. POLLTECH INSTRUMENTS, MUMBAI

ITA 1121/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3161 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAKLD
• Assessee Lawyers: DEVANG JOSHILD
• Keywords: Bogus purchase; Onus to prove
• Section: 143(3); 142(1); 133(6); 148

Judgement Text

ITA NOS.1121-22/MUM/2019 M/S. POLLTECH INSTRUMENTS ASSESSMENT YEARS: 2010-11 & 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.1121/MUM/2019 ( / ASSESSMENT YEAR : 2010-11 ) & ./ I.T.A. NO.1122/MUM/2019 ( / ASSESSMENT YEAR : 2011-12 ) D CIT - 29(2) ROOM NO.202, 2 ND FLOOR, C-10 PRATYAKSHKAR BHAVAN BKC BANDRA (E) MUMBAI- 400 051. / VS. M/S. POLLTECH INSTRUMENTS 309, K.K. GUPTA INDUSTRIAL ESTATE DR. R.P. ROAD, MULUND (WEST) MUMBAI- 400 080. &' ./ ./PAN/GIR NO. AAEFP-7838-H ( ') /APPELLANT ) : ( *+') / RESPONDENT ) ASSESSEE BY : SHRI DEVANG JOSHI-LD.AR REVENUE BY : MS. JYOTHILAKSHMI NAYAK-LD. DR / DATE OF HEARING : 17/02/2020 / DATE OF PRONOUNCEMENT : 12/03/2020 / O R D E R PER BENCH 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEAR S [IN SHORT REFERRED TO AS AY] 2010-11 AND 2011-12 CONTEST SE PARATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY ON CERTAIN COMMON GROUNDS OF APPEAL. SINCE ISSUE ARE IDENTICAL, APPEALS WERE HEARD TOGET HER AND ARE NOW ITA NOS.1121-22/MUM/2019 M/S. POLLTECH INSTRUMENTS ASSESSMENT YEARS: 2010-11 & 2011-12 2 BEING DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO.1121/MUM/2019 (AY 2010-11) 2.1 THE REVENUE ASSAILS THE ORDER OF LD. COMMISSION ER OF INCOME-TAX (APPEALS)-40, MUMBAI, [CIT(A)] DATED 14/12/2018 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS.28,102/- BEING 12.5% OF RS.2,24, 817/- TO RS.13,489/- I.E. 6% OF THE AFORESAID BOGUS PURCHASES FROM HAWALA PARTIES I GNORING THE FACT THAT THE ASSESSEE FAILED TO PRODUCE THE PARTIES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS.28,102/- BEING 12.5% OF RS.2,24, 817/- TO RS.13,489/- I.E. 6% OF THE AFORESAID BOGUS PURCHASES IN VIEW OF THE DECISI ON OF THE HON'BLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD. WHEREIN THE APEX COURT HAS DISMISSED THE SLP FILED AGAINST THE HIGH COURTS DECISION OF UPHOLDING THE 100% ADDITION MADE BY THE A.O. ON ACCOUNT OF BOGUS PURCHASES. AS EVIDENT FROM THE GROUNDS, THE SOLE SUBJECT MATTE R OF APPEAL IS ESTIMATED ADDITION ON ACCOUNT OF ALLEGED BOGUS PURC HASES. 2.2 WE HAVE CAREFULLY HEARD RIVAL SUBMISSIONS AND P ERUSED RELEVANT MATERIAL ON RECORD. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 FACTS ON RECORD WOULD REVEAL THAT ASSESSEE BEIN G RESIDENT FIRM STATED TO BE ENGAGED IN MANUFACTURING / TRADING OF CERTAIN AIR POLLUTION MONITORING INSTRUMENTS WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S. 143(3) R.W.S. 147 ON 12/02/2016, WHEREIN IT WAS, INTER-ALIA, SADDLED WITH ESTIMATED ADDITION OF RS.0.28 LACS, COMPUTED @12.5% OF SUSPICIOUS PURCHASES. 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), IT TRANSPIRED THAT ASSESSEE OBTAINED BOGUS BILLS AG GREGATING TO RS.2.24 ITA NOS.1121-22/MUM/2019 M/S. POLLTECH INSTRUMENTS ASSESSMENT YEARS: 2010-11 & 2011-12 3 LACS FROM 3 ENTITIES, THE DETAILS OF WHICH HAVE ALR EADY BEEN EXTRACTED IN PARA-4 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY , THE CASE WAS RE- OPENED AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF N OTICE U/S. 148 ON 18/06/2014 WHICH WAS FOLLOWED BY NOTICES U/S. 143(2 ) & 142(1) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCH ASE TRANSACTIONS. 3.3 NOTICES U/S. 133(6) AS ISSUED TO 3 ENTITIES, TO CONFIRM THE TRANSACTIONS, WERE RETURNED BACK BY POSTAL AUTHORIT IES. ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES BY SUBMITTING COPIE S OF INVOICES AND LEDGER EXTRACT ETC. HOWEVER, IT FAILED TO PRODUCE A NY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS. THE ASSESSEE, IN THE OPIN ION OF LD. AO, FAILED TO DISCHARGE THE ONUS TO PROVE THE IDENTITY OF THE ABOVE PARTIES AND ALSO FAILED TO SUBSTANTIATE THE RECEIPT / DELIVERY OF MA TERIAL. FINALLY, LD. AO ESTIMATED ADDITIONS OF 12.5% AGAINST THESE PURCHASE S WHICH RESULTED INTO ADDITION OF RS.0.28 LACS IN THE HANDS OF THE A SSESSEE. 4. THE LD. CIT(A), AFTER CONSIDERING THE FACTUAL MA TERIAL AS WELL AS ASSESSEES SUBMISSIONS REDUCED THE ESTIMATION TO 6% . AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. UPON DUE CONSIDERATION, WE ARE OF THE OPINION TH AT THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE SALES TURNOVER H AS NOT BEEN DISPUTED / DISTURBED BY THE REVENUE. THE ASSESSEE W AS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS. HOWEVER, AT THE SAME TI ME, THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM T HE TRANSACTIONS. THE DELIVERY OF MATERIAL REMAINED UNSUBSTANTIATED. THE STATED FACTUAL MATRIX, IN OUR CONSIDERED OPINION, WOULD MAKE IT A FIT CASE TO MAKE ESTIMATED ITA NOS.1121-22/MUM/2019 M/S. POLLTECH INSTRUMENTS ASSESSMENT YEARS: 2010-11 & 2011-12 4 ADDITIONS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSE SSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY / UNORGANIZED MARK ET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. CIT( A) HAS RIGHTLY DONE KEEPING IN VIEW THE STATED FACTUAL MATRIX. THE ESTI MATION OF 6% AS MADE BY LD. AO, IN OUR OPINION, WAS QUITE FAIR AND REASO NABLE AND THEREFORE, THE SAME WOULD NOT REQUIRE ANY INTERFERENCE ON OUR PART. THE APPEAL STANDS DISMISSED. ITA NO.1122/MUM/2019, AY 2011-12 6. FACTS ARE PARI-MATERIA THE SAME IN THIS YEAR. TH E ASSESSEE WAS SIMILARLY ASSESSED U/S. 143 R.W.S. 147 ON 13/02/201 6 WHEREIN IT WAS SADDLED WITH AN ESTIMATED ADDITION OF 12.5% AGAINST ALLEGED BOGUS PURCHASES OF RS.6.13 LACS WHICH RESULTED INTO ADDIT ION OF RS.0.76 LACS IN THE HANDS OF THE ASSESSEE. THE LD. CIT(A) REDUCED T HE ESTIMATION TO 6% AGAINST WHICH THE REVENUE IS IN FURTHER APPEAL BEFO RE US. FACTS BEING IDENTICAL AS IN AY 2010-11, TAKING THE SAME VIEW, W E DISMISS THE APPEAL. CONCLUSION 7. BOTH THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 12/03/2020 SR.PS, JAISY VARGHESE ITA NOS.1121-22/MUM/2019 M/S. POLLTECH INSTRUMENTS ASSESSMENT YEARS: 2010-11 & 2011-12 5 !'! / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT CONCERNED 5. 34*-5 , 5 , / DR, ITAT, MUMBAI 6. 4678 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.