DCIT 13(3)(1), MUMBAI V. AKHTAR HASAN RIZVI, MUMBAI

ITA 1516/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5517 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVLD
• Assessee Lawyers: VISHWAS V MEHENDALE LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 133(6); 147; 148

Judgement Text

ITA NO.1516/MUM/2016 AKHTAR HASAN RIZVI ASSESSMENT YEAR: 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1516/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX-13(3)(1) 2 ND FLOOR, AAYKAR BHAVAN M.K.ROAD MUMBAI-400 020 / VS. AKHTAR HASAN RIZVI 1 ST FLOOR, RIZVI HOUSE HILL ROAD, BANDRA(W) MUMBAI-400 050 !' ./ ./ PAN/GIR NO.AABPR-6978-H ( '$ /APPELLANT ) : ( %'$ / RESPONDENT ) REVENUE BY : RAJESH KUMAR YADAV, LD.DR ASSESSEE BY : VISHWAS V. MEHENDALE, LD.AR / DATE OF HEARING : 10/07/2018 / DATE OF PRONOUNCEMENT : 10/07/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY ] 2009-10 CONTESTS THE ORDER OF LD. COMMISSIONER OF INCOME-TA X (APPEALS)-20 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-20/ACIT-12(1)(1)/IT-145/2014-15 DATED 30/12/2015 QUA CERTAIN RELIEF PROVIDED TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY 2 ITA NO.1516/MUM/2016 AKHTAR HASAN RIZVI ASSESSMENT YEAR: 2009-10 LD. ASSISTANT COMMISSIONER OF INCOME TAX-9(3), MUMB AI [AO] U/S 143 READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 ON 31/10/2014 WHEREIN T HE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT RS.162 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS.79.37 LA CS E-FILED BY THE ASSESSEE ON 30/09/2009 WHICH WAS PROCESSED U/S 143( 1). IN THE QUANTUM ASSESSMENT, THE ASSESSEE HAS SUFFERED SOLE ADDITION OF RS.82.62 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES WHICH IS THE SUBJECT MATTER OF THIS APPEAL . IT HAS BEEN NOTED THAT THE APPEAL IS DELAYED BY 6 D AYS WHICH HAS NOT BEEN AGITATED BY LD. AUHTORIZED COUNSEL FOR ASS ESSEE [AR], SHRI VISHWAS V.MEHENDALE. KEEPING IN VIEW THE SAME, WE PROCEED TO DISPOSE- OFF THE APPEAL ON MERITS. 2. BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN CONSTRUCTION BUSINESS UNDER PROPRIETORSHIP CONCERN NAMELY RIZVI BUILDERS WAS SUBJECTED TO REASSESSMENT PROCEEDINGS FOR IMPUG NED AY PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION) / SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS BEING INDULGING IN BOGUS PURCHASE BILLS WITHOUT CARRYING OUT ANY ACTUAL BUSINESS . PURSUANT TO THE SAID INFORMATION, IT WAS FOUND THAT THE ASSESSEE MADE CE RTAIN PURCHASES AGGREGATING TO RS.82,62,499/- FROM THREE SUCH SUSPI CIOUS DEALERS, THE DETAILS OF WHICH HAVE BEEN EXTRACTED AT PARA-2 OF THE QUANTUM ASSESSMENT ORDER. CONSEQUENTLY NOTICE U/S 148 DATED 18/03/2014 WAS ISSUED TO THE ASSESSEE WHEREIN THE ASSESSEE WAS REQUIRED TO SUBST ANTIATE THE PURCHASES MADE BY HIM. THE ASSESSEE, WHILE DEFENDING THE PURC HASES MADE BY HIM, 3 ITA NO.1516/MUM/2016 AKHTAR HASAN RIZVI ASSESSMENT YEAR: 2009-10 SUBMITTED DOCUMENTARY EVIDENCES BUT FAILED TO PRODU CE ANY OF THE PARTY TO CONFIRM THE TRANSACTIONS. NOTICE U/S 133(6) ISSUED BY LD. AO REVEALED THAT NONE OF THE PARTY WAS IN EXISTENCE AT THE GIVEN ADD RESS. FINALLY, NOT CONVINCED, LD. AO MADE THE ADDITION THEREOF IN THE HANDS OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 30/12/2 015 WHEREIN THE LD. CIT(A), AFTER CONSIDERING THE FACTUAL MATRIX AND PL ACING RELIANCE ON CERTAIN JUDICIAL PRONOUNCEMENTS, RESTRICTED THE IMPUGNED AD DITIONS TO RS.10.32 LACS, BEING 12.5% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS NOT IN APPEAL AGAINST THE ORDER OF FIRST APPELLATE AUTH ORITY. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THE A SSESSEE WAS ENGAGED IN CONSTRUCTION ACTIVITIES, WHICH COULD NOT BE CARRIED OUT WITHOUT CONSUMPTION OF ACTUAL MATERIAL. THE TURNOVER ACHIEVED BY THE AS SESSEE 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, THE ASSESSEE FAILED TO P RODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS. NOTICES ISSU ED U/S 133(6) REVEALED THAT NONE OF THE SUPPLIERS WAS IN EXISTENCE AT THE GIVEN ADDRESS. ALL THESE FACTORS CAST A SERIOUS DOUBT ON ASSESSEES CLAIM. T HEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS T O ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT 4 ITA NO.1516/MUM/2016 AKHTAR HASAN RIZVI ASSESSMENT YEAR: 2009-10 ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHAS E OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST ALLEGE D BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHTLY DONE. THEREFORE, FINDI NG THE SAME IN ORDER, WE DISMISS THE REVENUES APPEAL. 5. RESULTANTLY, THE REVENUES APPEAL STAND DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2018 SD/- SD/- (C.N.PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 10.07.2018 SR.PS:-THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ()*+,- / THE APPELLANT 2. 123,- / THE RESPONDENT 3. 73873 9: ) ()*+ ( / THE CIT(A) 4. 73873 9: / CIT CONCERNED 5. CDEF*31G:GHI , 738()*+K3(HI8L , / DR, ITAT, MUMBAI 6. FNOP+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) ./01 , / ITAT, MUMBAI