ASST CIT 19(2), MUMBAI V. NANDISH CONSTRUCTION CO., MUMBAI

ITA 1185/MUM/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4296 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Keywords: Bogus purchase; Tax effect; Reassessment proceedings
• Section: 133(6); 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1185/MUM/2015 ( / ASSESSMENT YEAR: 2009-10) ASSISTANT COMMISSIONER OF INCOME TAX-19(2) ROOM NO.207, MATRU MANDIR MUMBAI-400 007 / VS. NANDISH CONSTRUCTION CO. 1 ST FLOOR, 12, HIRAKUNJ KHOTACHIWADI, V.P.ROAD MUMBAI-400 004 ! ./ ./PAN/GIR NO. AAAFN-3169-K ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : CHAUDHARY ARUN KUMAR SINGH, LD. DR / DATE OF HEARING : 01/10/2018 / DATE OF PRONOUNCEMENT : 10/10/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2009-10 IS A RECALLED MATTER WHICH CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-30, MUMBAI, [CIT(A)], APPEAL NO.CIT(A)- 30/AC 19(2)/90/2014-15 DATED 23/12/2014 QUA ESTIMATION OF ADDITIONS AGAINST ALLEGED BOGUS PURCHASES. THE APPEAL WAS INITIALLY DISMISSED 2 BY THE TRIBUNAL VIDE ORDER DATED 28/02/2017 FINDING THE TAX EFFECT OF THE APPEAL BELOW THE THRESHOLD LIMIT OF RS.10 LACS. HOWEVER, THE SAME HAS SUBSEQUENTLY BEEN RECALLED AT THE BEHEST O F REVENUE VIDE MA NO. 708/MUM/2017 DATED 06/04/2018 UPON BEING POINTED OUT THAT THE TAX EFFECT WAS, IN FACT, MORE THAN THE THRESHOL D LIMIT OF RS.10 LACS. ACCORDINGLY, THE APPEAL HAS COME UP FOR RE-HEARING BEFORE THIS BENCH. 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE P ROCEED TO DISPOSE-OFF THE SAME IN TERMS OF RULE 25 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AF TER HEARING LD. DEPARTMENTAL REPRESENTATIVE, SHRI ARUN KUMAR SINGH CHAUDHARY WHO HAS JUSTIFIED THE STAND OF LD. AO IN MAKING FUL L ADDITION OF RS.220.11 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES STATED TO BE MADE BY THE ASSESSEE FROM FOUR ALLEGED BOGUS SUPPLIERS. 3. THE ASSESSEE BEING RESIDENT FIRM WAS RE-ASSESSED U/S 143 READ WITH SECTION 147 WHEREIN THE ASSESSEE WAS SADDLED WITH ADDITION OF RS.220.11 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES STATED TO BE MADE BY THE ASSESSEE FROM FOUR SUPPLIERS, THE DETAI LS OF WHICH HAVE ALREADY BEEN EXTRACTED IN PARA-2 OF QUANTUM REASSESSMENT ORDER. THE REASSESSMENT PROCEEDINGS WERE INITIATED PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA WHEREIN IT TRANSPIRED THAT THE ASSESSEE STOOD BENEFITTED BY AC COMMODATION BILLS AGGREGATING TO RS.220.11 LACS FROM FOUR PARTIES. NO TICES ISSUED U/S 133(6) TO CONFIRM THE TRANSACTIONS ELICITED NO SATI SFACTORY RESPONSE AND THE PHYSICAL INSPECTION OF THE ADDRESSES OF SUP PLIERS REVEALED THAT 3 NO SUCH PARTY WAS EXITING AT THE GIVEN ADDRESSES. A CCORDINGLY, THE ASSESSEE WAS REQUIRED TO SUBSTANTIATE THE SAME. THE ASSESSEE DEFENDED THE SAME, HOWEVER, NOT CONVINCED, LD. AO T REATING THE SAME AS BOGUS PURCHASES ADDED THE PURCHASES TO THE INCOME OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 23/12/2014 WHICH IS COMMON ORDER FOR AY 2009-10 & 2010-11. THE LD. CIT(A) AFTER DUE CONSIDERATION OF FACTUAL MATRIX, RESTRICT ED THE IMPUGNED ADDITIONS TO 12.5% OF ALLEGED BOGUS PURCHASES. 5. AFTER DUE CONSIDERATION OF ORDERS OF LOWER AUTHO RITIES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE WAS ENGAGE D AS CIVIL CONTRACTOR WHICH COULD NOT BE CARRIED OUT WITHOUT CONSUMPTION OF ACTUAL MATERIAL. THE TURNOVER ACHIEVED BY THE ASSES SEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS WERE THROU GH BANKING CHANNELS. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS. HOWEVER, AT THE SAME TIME, NOTICES ISSUE D U/S 133(6) REMAINED UNANSWERED AND PHYSICAL INSPECTION REVEALE D THAT NONE OF THE PARTIES WAS OPERATING FROM THE GIVEN ADDRESSES. THE ASSESSEE COULD NOT PRODUCE ANY OF THE SUPPLIERS TO CONFIRM T HE TRANSACTIONS. IN SUCH A SCENARIO, THE ESTIMATED ADDITION OF 12.5% AS MADE BY FIRST APPELLATE AUTHORITY, IN OUR OPINION, JUSTIFIES THE FACTUAL MATRIX AND HENCE, WE DO NOT FIND ANY INFIRMITY IN THE SAME. 6. THE APPEAL STANDS DISMISSED. 4 ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :10.10.2018 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. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI