DCIT 14(3)(2), MUMBAI V. S.D MATERIAL HANDLERS P.LTD, MUMBAI

ITA 137/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7509 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Keywords: Bogus purchase
• Section: 133(6); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHR I SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUTANT MEMBER ITA NO. 137 /MUM./2016 ( ASSESSMENT YEAR : 20 11 12 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 14(3)(2), MUMBAI . APPELLANT V/S M/S. S.D. MATERIAL HANDLERS PVT. LTD. 312, 3 RD FLOOR, GEMSTAR COMMERCIAL COMPLEX, RAMCHANDRA LANE EXTN. MALAD (WEST), MUMBAI 400 064 PAN AACCD3481B . RESPONDENT REVENUE BY : SHRI M.C. OMI NINGSHEN ASSESSEE BY : NONE DATE OF HEARING 26 . 0 3 .2018 DATE OF ORDER 11.04.2018 O R D E R PER SAKTIJIT DEY, J.M. THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 16 TH OCTOBER 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 22, MUMBAI, FOR THE ASSESSMENT YEAR 2011 12. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER: 1. ASSESSING OFFICER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN DELETING THE ADDITION OF ` 66,92,040, MADE ON ACCOUNT OF BOGUS PURCHASES MADE FROM THE SUPPLIERS, WITHOUT APPRECIATING THE FACT THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER TO THE IMPUGNED SUPPLIERS UNDER SECTION 133(6) OF THE ACT SO AS TO 2 M/S. S.D. MATERIAL HANDLERS PVT. LTD. CROSS EXAMINE THE AUTHENTICITY OF THE FACT OF HAVING MADE THE PURCHASES FROM THE SUPPLIERS, HAVE BEEN RETURNED UN SERVED BY THE GOVERNMENT POSTA L AUTHORITY WITH NO EXISTENCE OF THE PURPORTED SUPPLIERS. 2 . WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE IN SPITE OF ISSUANCE OF NOTICE OF HEARING. FROM THE ORDER SHEET ENTRIES, IT IS SEEN THAT ON EARLIER OCCASIONS A LSO, WHEN THE APPEAL WAS FIXED FOR HEARING, THE ASSESSEE DID NOT APPEAR. IN VIEW OF THE ABOVE, WE PROCEED TO DISPOSE OFF THE APPEAL EX PARTE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN THE B USINESS OF MATERIAL HANDLING AN D ERECTION OF HEAVY EQUIPMENT ON CONTRACT BASIS AND PROVIDING EQUIPMENT ON HIRE. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 22 ND AUGUST 2011, DECLARING TOTAL INCOME OF ` 1,07,29,850. DUR ING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WANTED TO VERIFY THE GENUINENESS OF PURCHASES WORTH ` 66,92,040, CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE FROM FIVE PARTIES. THEREFORE, HE CALLED UPON THE ASSESSEE TO FURNISH SUPPORTING DOCUMENTARY EVIDENCE TO PROVE THE PURCHASES. AS OBSERVED BY THE ASSESSING OFFICER , THE ASSESSEE , VIDE LETTER DATED 26 TH DE CEMBER 2013, SUBMITTED COPY OF BILLS, DELIVERY CHALLAN, ACCOUNT CONFIRMATION, COPY OF LEDGER IN ITS BOOKS. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EVIDENCE S SUBMITTED 3 M/S. S.D. MATERIAL HANDLERS PVT. LTD. BY THE ASSESSEE. HE OBSERVED, THE ASSESSEE FAILED TO FURNISH CONFIRMATI ON FROM THE PARTIES STATING THAT THEY HAVE ACTUALLY SOLD AND DELIVERED GOODS TO THE ASSESSEE. TO FURTHER VERIFY THE GENUINENESS OF PURCHASES THE ASSESSING OFFICER SENT NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE CONCERN ED SELLERS TO FURNISH CERTAIN INFO RMATION. IT IS OBSERVED BY THE ASSESSING OFFICER , THE NOTICES ISSUED UNDER SECTION 133(6) EVOKED NO RESPONSE FROM FOUR PARTIES AND IN RESPECT OF ONE PARTY, IT COULD NOT BE SERVED. THEREFORE, THE ASSESSING OFFICER ALLEGING THAT THE ASSESSEE WAS UNABLE TO PR OVE THE GENUINENESS OF PURCHASES TREATED THEM AS BOGUS AND ADDED BACK TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE AND EVIDENCE BROUGHT ON RECORD, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WHILE DOING SO, HE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN ANIS AHMAD & SONS V/S CIT, 297 ITR 441. 5 . LEARNED DEPARTMENTAL REPR ESENTATIVE RELIED UPON THE GROUND RAISED AND OBSERVATIONS MADE BY THE ASSESSING OFFICER. 6 . WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT, DURING THE ASSESSMENT 4 M/S. S.D. MATERIAL HANDLERS PVT. LTD. PROCEEDINGS TO PROVE THE PURCHASES MADE OF ` 66,92,040, THE ASSESSEE PRODUCED PURCHASE BILLS, DELIVERY CHALLAN, ACCOUNT CONFIRMATION, COPY OF LEDGER ACCOUNT, ETC. ONLY BECAUSE THE CONFIRMATION PRODUCED BY THE ASSESSEE WERE NOT IN A PARTICULAR MODE AND MANNER AND THE NOTICE S ISSUED UNDER SECTION 133(6) OF THE ACT TO THE SELLERS WERE NOT RESPONDED TO OR NOT SERVE D THE ASSESSING OFFICER TREATED THE PURCHASES MADE BY THE ASSESSEE AS BOGUS AND IN THE PROCESS HAS COMPLETELY BRUSHED ASIDE THE EVIDENCES PRODUCED BY THE ASSESSEE. THE LEARNE D COMMISSIONER (APPEALS) AFTER EXAMINING THE MATERIAL ON RECORD HAS FOUND THAT THE PURCHASES WERE SUPPORTED BY DOCUMENTARY EVIDENCE S SUCH AS COPIES OF PURCHASES ORDER, COPIES OF INVOICES FOR PURCHASES WITH SUPPLIERS ADDRESS, VAT/CST REGISTRATION NUMBER WI TH DESCRIPTION OF SPARE PARTS AND COST, DELIVERY CHALLAN AT ASSESSEES SIDE, CONFIRMATION OF PURCHASE TRANSACTIONS AND RECEIPT OF PAYMENT FROM SUPPLIERS WITH THEIR PAN NUMBER, BANK STATEMENTS SHOWING PAYMENT MADE BY CHEQUES, ETC. THUS, IT IS ESTABLISHED ON RECORD THAT WHILE THE ASSESSEE HAS BROUGHT MATERIAL / EVIDENCE ON RECORD TO PROVE GENUINENESS OF THE PURCHASES MADE , THE ASSESSING OFFICER COMPLETELY IGNORING THEM HAS DISALLOWED THE PURCHASES ON FLIMSY GROUNDS OF NON SUBMISSIONS OF CONFIRMATION IN A PART ICULAR MANNER AND NON FURNISHING OF INFORMATION BY THE SUPPLIERS IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT. IN OUR VIEW, WHEN THE ASSESSEE HAS BROUGHT 5 M/S. S.D. MATERIAL HANDLERS PVT. LTD. EVIDENCE S ON RECORD TO PROVE THE GENUINENESS OF THE PURCHASES, THE ASSESSING OFFIC ER IS DUTY BOUND TO EXAMINE THEM. BEFORE DISCARDING THE EVIDENCE S BROUGHT ON RECORD AS FALSE OR UNACCEPTABLE, THE ASSESSING OFFICER MUST CONDUCT PROPER ENQUIRY TO FALSIFY THE EVIDENCE. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS FINISHED HIS JOB BY SIMP LY ISSUING NOTICE S UNDER SECTION 133(6). FAILURE TO RESPOND TO THE NOTICE UNDER SECTION 133(6) BY ITSELF CANNOT LEAD TO THE CONCLUSION THAT THE PURCHASES ARE NON GENUINE. WHEN THE ASSESSEE HAS FURNISHED DELIVERY CHALLAN, PURCHASE INVOICE, ACCOUNT CONFIRMAT ION, BANK STATEMENT, ETC. TO PROVE THE GENUINENESS OF PURCHASES, THE ASSESSING OFFICER CANNOT TREAT THE PURCHASES AS BOGUS BY COMPLETELY IGNORING SUCH EVIDENCE. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUND RAISED IS DISMISSED. 7 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.04.2018 SD/ - G. MANJUNATHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 11.04.2018 6 M/S. S.D. MATERIAL HANDLERS PVT. LTD. 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 (ASSTT. REGISTRAR/SR.P.S) ITAT, MUMBAI