RUBY POLYPLAST P.LTD, MUMBAI V. ITO 13(3)(2), MUMBAI

ITA 1150/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5951 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Additional evidence
• Section: 133(6); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO. 1150 /MUM/201 7 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., SHIVAM GROUND FLOOR CHARKRAVATI ASHOK ROAD ASHOK NAGAR, KANDIVALI (E) MUMBAI 400 101 PAN: AABCV 2892 H V. INCOME TAX OFFICER WARD NO. 13(3)(2 ) AYAKAR BHAVAN MUMBAI 400 002 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJENDRA SINGHAVI DEPARTMENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 06 .06.2019 DATE OF PRONOUNCEMENT : 31 .07 .2019 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 21 MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 07.11.2016 FOR THE A.Y. 2009 - 10. 2. IT IS NOTICED FROM THE TRIBUNAL RECORD THAT THIS APPEAL WAS DISPOSED OF F BY ORDER DATED 07.06.2017 ADJUDICATING G ROUND NO . 1 REGARDING BOGUS PURCHASES , WHEREIN THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 12.5% OF BOGUS PURCHASES. SUBSEQUENTLY ON FILING 2 ITA NO. 1150/MUM/2017 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., M .A.NO. 901/MUM/2017 THE APPEAL WAS RECALLED BY THE TRIBUNAL BY ORDER DATED 01.03.2019 FOR LIMITED PURPOSE OF DISPOSING OF F G ROUND NO.2 AS THE TRIBUNAL OMITTED TO DISPOSE OF F G ROUND NO. 2 OF GROUNDS OF APPEAL . THEREFORE, THE ONLY GROUND LEFT FOR DISPOSAL IN THIS APPEAL IS G ROUND NO . 2 OF GROUNDS OF APPEAL WHICH READS AS UNDER: - 2. LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER DUE TO NON - RESPONSE OF NOTICE UNDER SECTION 133(6) ISSUED TO ONE OF THE CREDITORS OF THE COMPANY - M/S. HEALTH PLUS, EVEN THOUGH THE DETAILS LIKE PAN AND AADHAR CARD OF THE PROPRIETOR OF M/S. HEALTH PLUS AND CONFIRMATION OF ACCOUNT OF APPELLANT IN THEIR DULY CERTIFIED BY PROPRIETOR WAS SUBMITTED. 2. 1. LD. CIT (A) HAS CONFIRMED THE ADDITION OF RS. 1,18,700 / - TO TOTAL INCOME INSPITE SUBMISSION OF CONFIRMATION RECEIVED FROM THE SAID CREDITOR. 2.2 . THE APPELLANT WAS DEALING WI TH THIS PARTY IN F.Y.2008 - 09 RELEVANT TO A.Y. 2009 - 10. THE APPELLANT HAS SUBMITTED CONFIRMATION OF PARTY BEFORE HON'BLE CIT (A) AS ADDITIONAL EVIDENCE AS THE APPELLANT WAS UNAWARE OF ANY NOTICE U/S 133(6) WAS SENT BY LD. AO AND RESPONSE NOT RECEIVED. THIS WAS EVIDENT FROM THE PROCEEDING SHEET OF LD. AO, SUBMITTED BEFORE LD. CIT (A). 2. 3. ATTENTION IS ALSO DRAWN TO THE FACT THAT THE POSTAL RESPONSE WAS 'LEFT'. THAT MEANS THE PARTY WAS PRESENT DURING THE EARLIER PERIOD. 3. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ISSUED NOTICE U/S. 133(6) OF THE ACT TO ONE OF THE SUNDRY CREDITOR S NAMELY M/S. HEALTH PLUS FOR CONFIRMATION OF THE BALANCES. THE NOTICE WAS RETURNED UNSERVED BY P OSTAL A UTHORITIES WITH THE REMARK LEFT . T HE ASSESSING O FFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE WAS INDULGED IN PURCHASE OF NON - GENUINE PURCHASES THE SUNDRY CREDITOR WAS ALSO TREATED AS BOGUS AND WAS ACCORDINGLY DISALLOWED U/S. 69 OF THE ACT. ON APPEAL THE LD.CIT(A) SUSTAINED THE ADDITION/DISALLOWANCE O BSERVING THAT COPY OF LEDGER ACCOUNT FILED BEFORE HIM DOES NOT BEAR ANY SIGNATURE NOR IT IS DA TED 3 ITA NO. 1150/MUM/2017 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., AND IS NOT IN ORIGINAL AND T HEREFORE IT CANNOT BE AUTHENTICATED WITHOUT THE ORIGINAL . 4. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSING OFFICER N EVER INFORMED THAT NOTICE U/S. 133(6) O F THE ACT WAS RETURNED UNSERVED, ASSESSING OFFICER NEVER ASKED FOR NEW ADDRESS OF THE CREDITOR . BEFORE THE LD.CIT(A) SELF - ATTESTED COPY OF A A DHAR AND PAN CARD OF THE PROPRIETOR OF M/S. HEALTH PLUS WAS SUBMITTED, LEDGER OF ASSESSEE AC COUNT IN THE BOOKS OF M/S. HEALTH PLUS SIGNED BY THE PROPRIETOR OF M/S. HEALTH PLUS HAS BEEN FURNISHED, ACKNOWLEDGEMENT GIVEN BY THE AUTHORITIES OF SALES TAX DEPARTMENT ON RECEIPT OF APPLICATION IN FORM - 103 FOR CANCELLA TION OF CERTIFICATE OF REGISTRATION ISSUED UNDER MVAT ACT FOR M/S.HEALTH PLUS HAS BEEN FURNISHED SINCE M/S. HEALTH PLUS HAS DISCONTINUED ITS BUSINESS AND T HE DETAILS OF T IN PROVIDED BY SALES TAX AUTHORITIES HAVE ALSO BEEN FURNISHED TO THE LD.CIT(A). T HEREFORE, IT IS SUBMITTED THAT BEFORE THE LD.CIT(A) THE ASSESSEE HAS FURNISHED ALL THE NECESSARY DETAILS AND CONFIRMATIONS FROM SUNDRY CREDITOR M/S. HEALTH PLUS IN RESPECT OF THE BALANCE AND THEREFORE THERE IS NO JUSTIFICATION IS SUSTAINING THE ADDITION OB SERVING THAT THESE DOC UMENTS CANNOT BE AUTHENTICATED. 5. LD. DR VEHEMENTLY SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 4 ITA NO. 1150/MUM/2017 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., 6. HEARD RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ASSESSING OFFICER HAS ISSUED NOTICE U/S. 133(6) OF THE ACT TO SUNDRY CREDITOR NAMELY M/S. HEALTH PLUS BUT THE NOTICE WAS RETURNED UNSERVED. ASSESSING OFFICER PRESUMED THAT THIS IS ALSO A BOG US PURCHASE TRANSACTION AND ACCORDINGLY DISALLOWED. I NOTICED THAT NO FURTHER INFORMATION WAS ASKED BY THE ASSESSING OFFICER. IT IS NOT INTIMATED TO THE ASSESSEE THAT THE NOTICE WAS RETURNED UNSERVED AND TO PROVIDE FOR NEW ADDRESS. ASSESSING OFFICER HAS SIMPLY PRESUMED THAT THE TRANSACTION WITH SUNDRY CREDITOR IS BOGUS WITHOUT ANY VERIFICATION. BEFORE THE LD.CIT(A) ASSESSEE HAS FURNISHED SELF - ATTESTED COPY OF A A DHAR AND PAN CARD OF THE PROPRIETOR OF M/S. HEALTH PLUS WAS SUBMITTED, LEDGER COPY OF ASSESSEE ACCOUNT IN THE BOOKS OF M/S. HEALTH PLUS DULY SIGNED BY THE PROPRIETOR OF M/S. HEALTH PLUS HAS BEEN FURNISHED. ASSESSEE ALSO FURNISHED ACKNOWLEDGEMENT GIVEN BY THE SALES TAX DEPARTMENT WHERE THE CREDITOR M/S. HEALTH PLUS HAS SURRENDERED ITS SA LES TAX AND APPLIED FOR CANCELLATION OF CERTIFICATE OF REGISTRATION ISSUED UNDER MVAT ACT AS THE CREDITOR H AS DISCONTINUED ITS BUSINESS . FURTHER DETAILS OF T IN ISSUED BY SALES TAX DEPARTMENT WAS ALSO FURNISHED BEFORE THE LD.CIT(A) TO PROVE THAT THE TRANSA CTION IS GENUINE . HOWEVER, ALL THESE EVIDENCES WERE BRUSHED ASIDE BY THE LD.CIT(A) OBSERVING THAT THEY CANNOT BE AUTHENTICATED WITHOUT ANY ORIGINALS. IF HE HAD ANY SUSPICION OVER THE DOCUMENTS HE COULD HAVE 5 ITA NO. 1150/MUM/2017 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., CALLED FOR ORIGINALS , WITHOUT ASKING FOR ORIGIN ALS LD.CIT(A) TREATED T HE DOCUMENTS AS UNAUTHENTICATED. IN MY VIEW , THE LD.CIT(A) HAD NOT PROPERLY APPRECIATED THE EVIDENCES. THE OBSERVATION OF THE LD.CIT(A) THAT T HE LEDGER ACCOUNT IS NOT SIGNED IS ALSO CONTRARY TO THE RECORD. THE CREDITOR HAS DULY SIGNED THE LEDGER ACCOUNT FURTHER THE SIGNATURE OF THE CREDITOR IN ALL THESE DOCUMENTS ALSO MATCHES. THEREFORE, THERE CANNOT BE ANY SUSPICION ABOUT THESE DOCUMENTS FILED BY THE ASSESSEE. SINCE THE ASSESSEE HAS FILED THE CONFIRMATION OF ACCOUNTS , PAN AND AADHAR CARDS THE TRANSACTION WITH M/S. HEALTH PLUS CANNOT BE TREATED AS NON - GENUINE AND T HEREFORE THE ADDITION MADE CANNOT BE SUSTAINED. THUS, THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED T O DELETE THE ADDITION MADE U/S. 69 OF THE ACT IN RESPECT OF THE SU NDRY CREDITOR M/S. HEALTH PLUS . GROUND NO.2 OF THE APPE AL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF TH E ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST JULY 2019 SD / - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 31 / 0 7 / 2019 GIRIDHAR , S R. PS 6 ITA NO. 1150/MUM/2017 (A.Y: 2009 - 10) M/S. RUBY POLYPLAST PVT. LTD., COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM