ITO 4(3)(3), MUMBAI V. VIKRANT PHARMACEUTICALS LTD, THANE

ITA 1551/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9871 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

ITA NO 1551/MUM/2017 VIKRANT PHARMACEUTICALS LIMITED ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1551/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 4(3)(3) 6 TH FLOOR, R.NO.637 AAYKAR BHAVAN MUMBAI 400 020 / VS. VIKRANT PHARMACEUTICALS L T D W-78, MIDC, BADLAPUR, THANE THANE -421 503 ./ ./PAN/GIR NO. AAACV-1686-L ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SAURABH DESHPANDE, LD. DR / DATE OF HEARING : 23/08/2017 / DATE OF PRONOUNCEMENT : 06 /09/2017 ITA NO 1551/MUM/2017 VIKRANT PHARMACEUTICALS LIMITED ASSESSMENT YEAR 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2009- 10 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9 [CIT(A)], MUMBAI DATED 07/12/2016 QUA RELIEF PROVIDED TO THE ASSESSEE ON ACCOUNT OF CERTAIN BOGUS PURCHASES. NONE HAS APPEARED ON BEHALF OF ASSESSEE DESPITE NOTICE AND NO ADJOURNMENT APPLICAT ION IS ON RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN MANUFACTURING & TRADING OF PHARMACEUTICALS / CHEMIC ALS, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 23/03/2015 AT RS.70,82,010/- AFTER A DDITION OF BOGUS PURCHASES FOR RS.60,08,830/-. THE ORIGINAL RETURN WAS FILED A T NIL ON 12/11/2010, WHICH WAS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.60,08,830/- FROM TWO PARTIES. CONSEQUENTLY, NOTI CE U/S 148 DATED 06/03/2014 WAS ISSUED WHICH WAS FOLLOWED BY STATUTO RY NOTICE U/S 143(2) / 142(1). ITA NO 1551/MUM/2017 VIKRANT PHARMACEUTICALS LIMITED ASSESSMENT YEAR 2009-10 3 2.3 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE, IN SUPPORT, PRODUCED PURCHASE AND CORRESPONDING SALES BILLS, VA T DOCUMENTS ETC. AND CONTENDED THAT THE PURCHASES WERE GENUINE SINCE THE PARTIES ACCOUNTS WERE SETTLED IN IMMEDIATELY SUCCEEDING AY. THE ASSESSEE ALSO PRODUCED STOCK REGISTER FOR CHEMICALS THAT WAS PURCHASED FROM THE SUPPLIER AND SUBSEQUENTLY SOLD BY THE ASSESSEE. HOW EVER, NOT CONVINCED, LD. AO OPINED THAT THE ASSESSEE COULD NO T DISCHARGE THE ONUS OF PROVING THE PURCHASE TRANSACTION AND THEREF ORE ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD.CIT(A) VIDE IMPUGNED ORDER DATED 07/12/20 16. THE LD. CIT NOTED THAT THE ADDITION WAS BEING MADE ON THE BASIS OF THIRD PARTY INFORMATION WHICH WAS NEVER CONFRONTED TO THE ASSES SEE WHEREAS THE ASSESSEE PRODUCED LEDGER ACCOUNTS, BILLS, BANK STAT EMENTS ETC. TO SUBSTANTIATE THE PURCHASES TRANSACTIONS WHICH COULD NOT BE CONTROVERTED BY LD. AO. FURTHER, NO ADDITIONS COULD BE MADE ON T HE BASIS OF MERE PRESUMPTION / SUSPICION BY LD. AO WITHOUT INDEPENDE NT INVESTIGATION AND WITHOUT BRINGING ON RECORD ANY COGENT MATERIAL TO ESTABLISH THAT THE PURCHASES WERE BOGUS PURCHASES. THE LD. CIT(A) AFTER APPRECIATING THE GP/NP RATES REFLECTED BY THE ASSESSEE, ESTIMATED TH E ADDITIONS AT RS.32,444/-, AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] DREW OU R ATTENTION TO THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY CO NFIRMATION ETC. FROM THE PARTIES TO SUBSTANTIATE THE PURCHASES. FURTHER, THE ASSESSEE FAILED TO ESTABLISH TO ACTUAL DELIVERY OF GOODS AND THEREFORE , THE ADDITIONS WERE ITA NO 1551/MUM/2017 VIKRANT PHARMACEUTICALS LIMITED ASSESSMENT YEAR 2009-10 4 JUSTIFIED. IT WAS FURTHER CONTENDED THAT THE ONUS T O SUBSTANTIATE THE PURCHASES SQUARELY LIED ON THE ASSESSEE AND MERE PA YMENT THROUGH BANKING CHANNELS WAS NOT SUFFICIENT TO PROVE THE SA ME SINCE NO CONFIRMATIONS ETC. WAS FILED BY THE ASSESSEE BEFORE LOWER AUTHORITIES AND NONE OF THE PARTIES COULD BE PRODUCED FOR CONFIRMAT ION OF PURCHASES. 5. HEARD AND PERUSED RELEVANT MATERIAL ON RECORD. W E ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITH OUT PURCHASE / CONSUMPTION OF MATERIAL SINCE ASSESSEE WAS ENGAGED AS TRADER & MANUFACTURER. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCE D PURCHASES INVOICES AND CORRESPONDING SALES BILLS WI TH STOCK REGISTER OF THE CONCERNED ITEM. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS W ERE THROUGH BANKING CHANNELS. THE LD. AO, PRIMA FACIE, WITHOUT MAKING ANY INDEPENDENT INQUIRIES OR WITHOUT CALLING FOR ANY CO NFIRMATIONS ETC. FROM THE ALLEGED BOGUS SUPPLIERS, REJECTED THE SAME STRAIGHTWAY AND MADE THE ADDITIONS MERELY BY PLACING RELIANCE ON THE WEB SITE INFORMATION, WHICH, IN OUR OPINION, WAS NOT JUSTIFIED PARTICULAR LY WHEN THE THIRD PARTY INFORMATION WAS NOT CONFRONTED TO THE ASSESSEE. IT IS SETTLED LAW THAT ADDITIONS COULD NOT BE MADE MERELY ON THE BASIS OF PRESUMPTION, SUSPICION, CONJECTURES OR SURMISES. THE LD. AO FAIL ED TO BRING ON RECORD ANY COGENT MATERIAL TO ESTABLISH THE FACT THAT THE PURCHASES WERE NOT GENUINE AND NO INQUIRIES OR EFFORTS, WHATSOEVER OF ANY NATURE, WERE MADE BY LD. AO TO SUBSTANTIATE HIS STAND. FURTHER, THE ASSESSEE IS TRADER AND MANUFACTURER AND THIS ACTIVITY COULD NOT BE CARRIED OUT WITHOUT PURCHASE / CONSUMPTION OF MATERIAL AND THE ASSESSEE PRODUCED ONE TO ITA NO 1551/MUM/2017 VIKRANT PHARMACEUTICALS LIMITED ASSESSMENT YEAR 2009-10 5 ONE CORRELATION OF THE MATERIAL. THE BOOKS OF ACCOU NTS WERE NOT REJECTED. IN VIEW OF THE SAME, WE FIND THAT THE ASSESSEE HAD DISCHARGED PRIMARY ONUS OF SUBSTANTIATING THE PURCHASES AND THEREFORE, THE ADDITIONS WERE NOT JUSTIFIED. THE LD.CIT(A) APPRECIATED THE ISSUE IN THE CORRECT PERSPECTIVE AND THEREFORE, FINDING THE DECISION OF LD. CIT(A) QUITE LOGICAL AND FAIR ONE, WE SEE NO REASON TO INTERFERE WITH TH E SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06. 09.2017 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. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI