SHRI RAVI PADMARAM CHOUDHARY, MUMBAI V. INCOME TAX OFFICER - 19(3)(1), MUMBAI

ITA 1130/MUM/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0715 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Bogus purchase; Onus to prove
• Section: 133(6); 147; 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 1130/MUM/2018 (ASSESSMENT YEAR 2011-12 ) SHRI RAVI PADMARAM CHOUDHARY 9/11, 2 ND FLOOR, 2 ND CARPENTER STREET, NEAR GOAL DEWOOL, MUMBAI-400004. PAN: ADSPC4371R VS. ITO - 19(3)(1) MATRU MANDIR, TARDEO ROAD, MUMBAI-40007. APPELLANT RESPONDE NT APPELLANT BY : NONE RESPONDENT BY : SHRI S.K. BEPARI (DR) DATE OF HEARING : 03.10.2018 DATE OF PRONOUNCEMEN T : 03.10.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME -TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-53, MUMBAI DATED 22 .12.2017 FOR ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [HE REINAFTER REFERRED TO AS LD. CIT(A)] HAS ERRED IN UPHOLDING THE ORDER O F THE LD. ASSESSING OFFICER AND DISALLOWING THE PURCHASE TO THE EXTENT OF 12.5% OF RS. 42,72,178 AMOUNTING TO RS. 5,34,022/- ON ACCOUNT OF PURCHASE FROM NON GENUINE PURCHASE PARTIES. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S DYNAMIC STEEL (INDIA), DEALING WITH FERROUS & NON-FERROUS M ETALS. THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 28.09.2011 ITA NO. 1130 MUM 2018-SHRI RAVI PADMARAM CHOUDHARY 2 DECLARING INCOME OF RS. 7,67,971/-. THE RETURN OF I NCOME WAS PROCESSED AND ACCEPTED UNDER SECTION 143(1) OF THE ACT. THE A SSESSMENT WAS RE- OPENED UNDER SECTION 147 ON 13.11.2014. THE ASSESSM ENT WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT SOME OF THE DEALERS WERE INDULGING IN PROVIDING ACCOMMODATION ENTRY BY ISSUING BOGUS BILL S WITHOUT SUPPLY OF ANY GOODS OR MATERIAL. THE ASSESSEE WAS ALSO ONE OF THE BENEFICIARIES WHO HAS AVAILED ACCOMMODATION ENTRY FROM THREE PARTIES AGGREGATING TO RS. 42,72,178/-. NOTICE UNDER SECTION 148 DATED 13.11.2 014 WAS SERVED UPON THE ASSESSEE. THE ASSESSEE WAS SUPPLIED WITH THE RE ASONS FOR RE-OPENING. THE ASSESSING OFFICER PROCEEDED FOR RE-ASSESSMENT. DURING THE RE- ASSESSMENT PROCEEDING, THE ASSESSEE WAS ASKED TO FU RNISH THE SUPPORTING DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE PURCHASES FROM ALL THREE PARTIES. THE ASSESSEE FURNISHED THE ADDRESS OF ALL THREE PAR TIES. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) TO ALL T HE PARTIES AT THE ADDRESSES PROVIDED BY ASSESSEE. THE NOTICES SENT BY ASSESSING OFFICER WERE RETURNED BACK WITH THE REMARK NOT KNOWN. THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSE SSEE FURNISHED THE COPY OF BANK STATEMENT AND THE DETAILS OF PURCHASES . THE CONTENTION OF THE ASSESSEE AND THE EVIDENCE FURNISHED BY ASSESSING OF FICER WAS NOT ACCEPTED BY ASSESSING OFFICER HOLDING THAT THE ONUS TO PROVE THE GENUINENESS OF PURCHASES WERE UPON THE ASSESSEE. TH E ASSESSEE FILED ITA NO. 1130 MUM 2018-SHRI RAVI PADMARAM CHOUDHARY 3 MERELY EVIDENCE THAT PURCHASES WERE MADE THROUGH AC COUNT PAYEE CHEQUE, WHICH IS NOT CONCLUSIVE PROOF WHEN GENUINENESS OF T RANSACTION IS IN DOUBT. THE ASSESSING OFFICER ON THE BASIS OF DECISION OF H ONBLE GUJARAT HIGH COURT IN CIT VS. SIMIT P. SHETH (356 ITR 451 (GUJ.) DISALLOWED 12.5% OF THE ALLEGED NON-GENUINENESS PURCHASES BEING PROFIT EARNED FROM SUCH PURCHASES. ON APPEAL BEFORE THE LD. CIT(A), THE ACT ION OF ASSESSING OFFICER WAS CONFIRMED. THUS, FURTHER AGGRIEVED BY T HE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US . 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE THE SER VICE OF NOTICE OF HEARING THROUGH RPAD FOR THE DATE OF HEARING FIXED FOR TODAY. THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE SUBMISSION OF LD. DR FOR THE REVENUE AND TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVA ILABLE ON RECORD. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUT HORITIES. THE LD. DR FOR THE REVENUE FURTHER SUBMITS THAT INVESTIGATION WING OF INCOME-TAX DEPARTMENT AND THE SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA MADE A FULL-FLEDGED ENQUIRY, THE PARTIES FROM WHOM THE ASSESSEE HAS SHOWN THE PURCHASES ARE BOGUS HAWALA DEALERS. THE H AWALA DEALERS WERE ENGAGED IN ISSUING THE BOGUS BILLS WITHOUT DELIVERY OF ANY MATERIAL OR GOODS. THE ASSESSEE IS ONE OF THE BENEFICIARIES WHO HAVE AVAILED ACCOMMODATION BILL ONLY TO INFLATE THE EXPENSES AND TO BRING OUT THE PROFITABILITY IN ORDER TO AVOID THE TAX. THE LD. DR FOR THE REVENUE FURTHER ITA NO. 1130 MUM 2018-SHRI RAVI PADMARAM CHOUDHARY 4 SUBMITS THAT THE LOWER AUTHORITY HAS ALREADY GIVEN SUFFICIENT RELIEF TO THE ASSESSEE. THE ASSESSEE IS NOT ENTITLED FOR ANY FURT HER RELIEF. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE N OTED THAT THE ASSESSING OFFICER HAS IDENTIFIED THE DISPUTED/HAWAL A PURCHASES FROM THREE PARTIES OF RS. 42,72,178/-. HOWEVER, WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER ADDED ONLY 12.5% OF SAID PURC HASES AS ESTIMATED PROFIT EARNED ON SUCH PURCHASES. THE ASSESSING OFFI CER DISALLOWED THE PURCHASES TO THE EXTENT OF PROFIT EMBEDDED IN THE A LLEGED BOGUS PURCHASES ON THE BASIS OF DECISION OF HONBLE GUJARAT HIGH CO URT IN SIMIT P SHETH(SUPRA). THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER. WE HAVE NOTED THAT THE ASSESSEE IS ENGAGED IN THE B USINESS OF FERROUS & NON-FERROUS METAL. THEREFORE, CONSIDERING THE NATUR E OF BUSINESS ACTIVITIES OF THE ASSESSEE, WE DO NOT FIND ANY ILLEGALITY OR I NFIRMITY IN THE ORDER PASSED BY LOWER AUTHORITIES. NO DOCUMENTARY EVIDENC E OR ANY SUBMISSION EXPLAINING THE FACT IS FILED BY ASSESSEE. THEREFORE , WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF LOWER AUTHORITIES. HE NCE, GROUND OF APPEAL RAISED BY ASSESSEE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/2018. SD/- SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER ITA NO. 1130 MUM 2018-SHRI RAVI PADMARAM CHOUDHARY 5 MUMBAI, DATE: 03.10.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI