M/S.LORDS SHOES BANDRA, MUMBAI V. INCOME TAX OFFICER-19(3)(2) NOW ACIT-23(2), MUMBAI

ITA 1189/MUM/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0217 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Bogus purchase; Corroborative evidences
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 1189 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 1 1 ) M/S. LORDS SHOES BANDRA 534, LINKING ROAD BANDRA (W), MUMBAI 400 050 PAN AAAFL1823C . APPELLANT V/S INCOME TAX OFFICER WARD 23(2), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI S.K. BEPARI DATE OF HEARING 1 2 .09.2018 DATE OF ORDER 19.09.2018 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 20 TH NOVEMBER 2017 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 33 , MUMBAI, FOR THE ASSESSMENT YEAR 20 10 11 . 2 . THE ONLY DISPUTE IN THE PRESENT APPEAL IS IN RELATION TO THE ADDITION OF ` 3,96,364, ON ACCOUNT OF BOGUS PURCHASES. 3 . WHEN THE APPEAL WAS CALLED FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. IT IS SEEN FROM RECORD, NOTICE OF HEARING ISSUED PER REGISTERED POST, THOUGH, SERVED ON THE ASSESSEE, HOWEVER, THE ASSESSEE HAS N OT APPEARED. THUS, IT APPEARS, THE ASSESSEE IS NOT 2 M/S. LORDS SHOES BANDRA INTERESTED IN PURSUING THE APPEAL. THAT BEING THE CASE, I PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 4 . BRIEF FACTS ARE, THE ASSESSEE A PARTNERSHIP FIRM IS ENGAGED IN THE BUSINESS OF TRADING IN FOOT WARE AND ALLIED PRODUCT. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2010, DECLARING INCOME OF ` 15,15,505 . DURING THE ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, MAHARASHTRA GOVERNMENT, FOUND THAT PURCHASES MADE BY THE ASSESSEE FROM M/S. DEEP ENTERPRISES, IS NOT GENUINE SINCE THE SAID PARTY HAS BEEN IDENTIFIED AS A HAWALA OP ERATOR PROVIDING ACCOMMODATION BILLS. TO EXAMINE THE GENUINENESS OF THE PURCHASES MADE, THE ASSESSEE ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) TO M/S. DEEP ENTERPRISES, HOWEVER, THE SAID NOTICE RETURNED UNSERVED T O THE POSTAL REMARK LEFT AT ADDRESS . THOUGH, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PRODUCE THE CONCERNED PARTY BEFORE HIM, HOWEVER, THE ASSESSEE FAILED TO PRODUCE THE SAID PARTY. FURTHER, TO VERIFY THE AUTHENTICITY OF THE PURCHASE MADE FROM M/S. DEEP ENTERPRISES, THE ASSESSING O FFICER SUMMONED ONE OF THE PARTNERS OF THE ASSESSEE FIRM AND EXAMINED HIM ON OATH. AS OBSERVED BY THE ASSESSING OFFICER, THE SAID PARTNER OF THE ASSESSEE FIRM THOUGH STATED THAT THE PURCHASES WERE MADE BY THE FIRM, HOWEVER, HE ALSO ADMITTED 3 M/S. LORDS SHOES BANDRA THAT NEITHER HE CAN PRODUCE THE CONCERNED PARTY NOR ANY OTHER SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF THE PURCHASES. ON THE BASIS OF THE MATERIAL AVAILABLE ON THE RECORD, THE ASSESSING OFFICER ULTIMATELY HELD THAT PURCHASE OF ` 3,96,364, MADE FROM M/S. DEEP ENTER PRISES, ARE NON GENUINE, ACCORDINGLY, ADDED BACK TO THE INCOME OF THE ASSESSEE. 5 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, THE LEARNED COMMISSIONER (APPEALS) ALSO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBERVATIONS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS). 7 . I HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT, DURING THE ASSESSMENT PROCEEDINGS, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE ASSESSING OFFICER WANTED TO VERIFY THE GENUINENESS OF PURCHASE MADE FROM M/S. DEEP ENTERPRISES. THOUGH, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE CONCERNED PARTIES, SEEKING CERTAIN INFORMATION, THE SAID NOTICE WAS RETURNED BACK UNSERVED DUE TO UNAVAILABILITY OF THE SAID PARTY IN THE GIVEN ADDRESS. EVEN THE ASSESSEE 4 M/S. LORDS SHOES BANDRA W AS UNABLE TO PRODUCE THE CONCERNED PARTY OR CONFIRMATION BEFORE THE ASSESSING OFFICER IN SUPPORT OF THE PURCHASE MADE. IN FACT, IN A STATEMENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE ASSESSMENT PROCEEDINGS, ONE OF THE PARTNERS OF THE ASSESSEE CATE GORICALLY STATED THAT HE CANNOT PRODUCE EITHER THE SELLER OR ANY OTHER SUPPORTING EVIDENCE TO PROVE THE PURCHASES. IN SUCH CIRCUMSTANCES, THE SOURCE OF PURCHASE MADE BY THE ASSESSEE REMAINED UNPROVED. HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFI CER HAS NOT DISPUTED THE SALES E FFECTED BY THE ASSESSEE. THAT BEING THE CASE, THE PRESUMPTION WOULD BE , THE ASSESSEE HAS PURCHASED THE GOODS FROM GREY MARKET. IN THESE CIRCUMSTANCES, THE PROPER COURSE IS TO ADD THE PROFIT ELEMENT EMBEDDED IN THE UNPROVED PU RCHASES. THUS, IN VIEW OF THE AFORESAID, I DIRECT THE ASSESSING OFFICER TO SUSTAIN ADDITION @ 12.5% OF THE BOGUS PURCHASES OF ` 3,96,364. GROUNDS RAISED ARE PARTLY ALLOWED. 8 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALL O WED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.09.2018 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 19.09.2018 5 M/S. LORDS SHOES BANDRA COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI