Chandan Stores, Pune V. Income-tax Officer, Ward - 9(1), Pune

ITA 1401/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0935 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 06-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Bogus purchase; Accommodation entries
• Section: 69C; 143(3); 131

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.1401/PUN/2018 / ASSESSMENT YEAR : 2012-13 CHANDAN STORES, 210, PUNE BOMBAY ROAD, CHINCHWAD, PUNE 411 019. PAN NO.AAACC9943P. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 9(1), PUNE. . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 8, PUNE DT.18.06.2018 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE DEALING IN HARDWARE AND PAINTS. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCO ME FOR A.Y. 2012-13 ON 25.09.2012 DECLARING TOTAL INCOME OF RS.8,29,200 /-. ADIT (INV.), KOLHAPUR HAD FORWARDED THE INFORMATION REGARDIN G ACCOMMODATION ENTRIES PROVIDED BY SANGLI BASED HAWALA DEA LERS TO / DATE OF HEARING : 31.01.2019 / DATE OF PRONOUNCEMENT: 25.03.2019 2 ITA NO.1401/PUN/2018 VARIOUS BUSINESS ENTITIES. FROM THE DETAILS, IT WAS SEEN TH AT ASSESSEES NAME WAS APPEARING AS ONE OF THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES. ACCORDINGLY, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DT.29.12.2016 AND THEREAFTER TOTAL INCOME WAS DETERMINED AT RS.18,69,620/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.18.06.2018 (IN APPE AL NO.PN/CIT(A)-8/ITO, WD.9(1)/805/2017-18) DISMISSED THE APPEA L OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSES SEE IS NOW BEFORE THE TRIBUNAL AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND : THE LEARNED CIT-A-8 ERRED ON FACTS AND IN LAW IN M AKING ADDITION OF RS.10,40,491/- AS DISALLOWANCE AS PER PROVISION OF SECTION 69C OF INCOME TAX ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ADIT (INV.,), KOLHAPUR HAD EXAMINED THE BANK ACCOUNT OF THE SANGLI BASED HAWALA OPERATORS SHRI SURESH PAREKH AND SHRI SUS HANT LADDA. IT WAS NOTED BY HIM THAT THE HAWALA OPERATOR GROUP H AD UTILIZED VARIOUS CONCERNS STANDING IN THEIR NAME FOR PROVIDING ACCO MMODATION ENTRIES. STATEMENT U/S 131 OF THE ACT OF THE ALLEGED HAW ALA OPERATORS WAS RECORDED ON 18.03.2014 WHEREIN THEY ADMITTED ALL THE ACCOMMODATION ENTRIES PROVIDED BY THEM AND ALSO ADMITTED EARNING COMMISSION @ 1% ON SUCH ACCOMMODATION ENTRIES. ON THE B ASIS OF THE INFORMATION PROVIDED BY THE HAWALA OPERATORS, IT WAS NOTICED THAT ASSESSEE HAD MADE PURCHASES AGGREGATING TO RS.10,40,491 /- FROM THE ALLEGED HAWALA OPERATORS. AO NOTED THAT SINCE ASSESSEE COULD NOT PRODUCE ANY INFORMATION ABOUT THE DELIVERY OF THE GOODS T O THE CUSTOMERS, THE PURCHASES AGGREGATING TO RS.10,40,491/- W AS HELD TO 3 ITA NO.1401/PUN/2018 BE NON-GENUINE AND ACCORDINGLY IT WAS TREATED AS BOGUS PURCHASES AND ADDITION WAS U/S 69C OF THE ACT. LD.CIT(A) UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, LD.A.R. SUBMITTED THAT ASSESSEE HAS SUPPLIED MATERIAL DIRECTLY TO THE GOVERNMENT DEPARTMENTS. SHE P OINTED TO THE DETAILS PLACED IN THE PAPER BOOK. SHE FURTHER SUBMITTED T HAT NO OPPORTUNITY OF CROSS-EXAMINATION OF THE ALLEGED HAWALA DEA LERS WAS GIVEN TO THE ASSESSEE AND IN SUCH A SITUATION NO ADDITIO N IS CALLED FOR. IN THE ALTERNATIVE, SHE SUBMITTED THAT PUNE TRIBUNAL IN T HE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT AND OTHERS (IN ITA NO. 795/PUN/2014 FOR A.Y. 2010-11 DATED 28.04.2017) HAS UPHELD THE ADDITION TO THE EXTENT OF 10% OF THE PURCHASES. SHE FURT HER SUBMITTED THAT 10% OF THE HAWALA PURCHASES IF MADE WOULD BE ACCEPT ABLE TO THE ASSESSEE. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORD ER OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO MAKING ADDITION OF RS.10,40,491/- TO THE TOTAL INCOME ON ACCOUNT OF BOGUS PURCHASES. I FIND THAT AO IN THE ORDER HAS NOTED THAT ASSESSEE HAD FAILED TO PROVE THE ENTIRE PURCHASES AMOUNTING TO RS.10,40 ,491/- MADE FROM MAHALAXMI ELECTRICALS AND SAMARTH ENTERPRISES AN D ACCORDINGLY THE ADDITION WAS MADE BY AO. THE ADDITION W AS UPHELD BY LD.CIT(A). I FIND THAT VARIOUS SCENARIOS OF BOGUS PURCHASE ISSUE WAS ADJUDICATED IN SERIES OF DECISIONS BY THE PUNE BENCHE S OF TRIBUNAL WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT AND OTHERS (IN ITA NO. 795/PUN/2014 FOR A.Y. 2010-11 DA TED 4 ITA NO.1401/PUN/2018 28.04.2017). IN THE CASE SIMILAR TO ASSESSEE, THE CO-ORDINATE BENC H OF THE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. L TD. VS. DCIT (SUPRA) HAD UPHELD THE ADDITION OF 10% OF THE BOGUS P URCHASES. IN VIEW OF THE AFORESAID FACTS AND FOLLOWING THE DECISION OF TH E CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CHHABI ELECTR ICALS (SUPRA) AND IN VIEW OF THE ALTERNATE SUBMISSION OF LD.A.R., I UPHOLD THE ADDITION TO THE EXTENT OF 10% OF SUCH PURCHASES MA DE BY AO. I THEREFORE DIRECT ACCORDINGLY. THUS, THE GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED ON THE 25 TH DAY OF MARCH, 2019. SD/- /- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 25 TH MARCH, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-8, PUNE. PR. CIT-5, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.