ITO 19(2)(5), MUMBAI V. PANKHIDEVI N DOSHI, MUMBAI

ITA 1594/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9870 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 29 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: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO 1594/MUM/2017 PANKHIDEVI N DOSHI 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. 1594/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 19(2)(5) ROOM NO. 210 MATRU MANDIR MUMBAI 400 007 / VS. PANKHIDEVI N DOSHI 52-A NANUBHAI DESAI ROAD, SINDHI LANE NAKA MUMBAI -400 004 ./ ./PAN/GIR NO. AEJPD-6317-G ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SAURABH DESHPANDE, LD. DR / DATE OF HEARING : 24/08/2017 / DATE OF PRONOUNCEMENT : 06 /09/2017 / 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)-30 [CIT(A)], MUMBAI DATED 21/12/2016 QUA RELIEF PROVIDED TO THE ASSESSEE ITA NO 1594/MUM/2017 PANKHIDEVI N DOSHI ASSESSMENT YEAR 2009-10 2 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 INDIVIDUAL DEALING IN FERROUS AND NON-FERROUS METALS UNDER PROPRIETORSHIP CONCERN NAMELY PUSHPAM METAL, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 16/03/2015 AT RS.1,00,64,150 /- AFTER ADDITION OF BOGUS PURCHASES FOR RS.95,37,931/-. THE ORIGINAL RETURN WAS FILED ON 24/09/2009 AT RS.2,61,213/- 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 PURCHASES BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.95,37,931/- FROM EIGHT PARTIES. CONSEQUENTLY, NO TICE U/S 148 DATED 06/03/2014 WAS ISSUED WHICH WAS FOLLOWED BY STATUTO RY NOTICES U/S 143(2) / 142(1). 2.3 TO CONFIRM THE PURCHASE TRANSACTIONS, NOTICES U /S 133(6) WERE ISSUED TO THE ALLEGED BOGUS SUPPLIERS, HOWEVER, THE SAME WERE RETURNED BACK UN-SERVED BY POSTAL AUTHORITIES. TO SUBSTANTIATE THE PURCHAS ES, THE ASSESSEE PRODUCED INVOICES ETC. HOWEVER, LD. AO NOT ED THAT THE ASSESSEE COULD NOT PRODUCE STOCK REGISTER AND NO EX PENDITURE WAS INCURRED TOWARDS TRANSPORTATION CHARGES WHICH LED T HE LD. AO TO ITA NO 1594/MUM/2017 PANKHIDEVI N DOSHI ASSESSMENT YEAR 2009-10 3 DISBELIEVE THE PURCHASE TRANSACTIONS AND CONSEQUENT LY, 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 21/12/2 016 WHERE THE ASSESSEE FAILED TO PRODUCE ANY OF THE PARTY FOR CON FIRMATION OF TRANSACTION. FINALLY, LD. CIT(A) PLACING RELIANCE O N SEVERAL JUDICIAL PRONOUNCEMENTS, RESTRICTED THE SAME TO 12.5% OF ALLEGED BOGUS PURCHASES AGAINST WHICH THE REVENUE IS IN FURTHER APPEAL BEFO RE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] DREW OU R ATTENTION TO THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY OF THE PARTY FOR CONFIRMATION OF TRANSACTION AND ALSO COULD NOT ESTA BLISH ACTUAL DELIVERY OF MATERIAL BEFORE LOWER AUTHORITIES AND HENCE, FULL A DDITION WAS JUSTIFIED. IT WAS FURTHER CONTENDED THAT THE ONUS TO SUBSTANTIATE THE PURCHASES SQUARELY LIED ON THE ASSESSEE WHICH HE FAILED TO DI SCHARGE AND MERE PAYMENT THROUGH BANKING CHANNELS WAS NOT SUFFICIENT TO PROVE THE SAME AND THEREFORE, LD. CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE. 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 KEEPING IN VIEW THE ASSESSE ES NATURE OF BUSINESS. THE SALES TURNOVER ACHIEVED BY THE ASSES SEE HAS NOT BEEN DISPUTED BY THE REVENUE AND BOOKS OF ACCOUNT WERE D ULY AUDITED. FURTHER, THE PAYMENTS TO SUPPLIERS WERE THROUGH BAN KING CHANNELS. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY O F THE EIGHT ALLEGED BOGUS SUPPLIERS BEFORE LOWER AUTHORITIES, WHICH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THE NOTICES SENT U/S 133(6) REMAI NED UN-SERVED. ITA NO 1594/MUM/2017 PANKHIDEVI N DOSHI ASSESSMENT YEAR 2009-10 4 THEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHA SE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGA INST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTL Y DONE. THEREFORE, FINDING THE SAME QUITE FAIR AND REASONABLE, WE SEE NO REASON TO INTERFERE WITH THE 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