DCIT 9(30(2), MUMBAI V. FUTURISTIC CONCEPTS MEDIA LTD, MUMBAI

ITA 1638/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9900 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 28 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: 09-03-2017
• 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 1638/MUM/2017 FUTURISTIC CONCEPTS MEDIA LTD 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. 1638/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX 9(3)(2) R.NO.418,4 TH FLOOR AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 / VS. FUTURISTIC CONCEPTS MEDIA LIMITED 4 TH FLOOR, F WING TEX CENTRE, NEAR HDFC BANK OFF. SAKI VIHAR ROAD, CHANDIVALI, ANDHERI(E) MUMBAI -400 072 ./ ./PAN/GIR NO. AAACF-5430-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)-16 ITA NO 1638/MUM/2017 FUTURISTIC CONCEPTS MEDIA LTD ASSESSMENT YEAR 2009-10 2 [CIT(A)], MUMBAI DATED 19/12/2016 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 OF DISCS, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 23/03/2015 AT RS.1,64,81,350/- AFTER ADDITION OF BOGUS PURCHASES FOR RS.87,52,068/-. THE ORIGINAL RETURN WAS FILED AT RS.77,29,280/- ON 25/09/2009 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.87,52,068/- FROM SIX PARTIES. CONSEQUENTLY, NOTI CE U/S 148 DATED 07/03/2014 WAS ISSUED WHICH WAS FOLLOWED BY STATUTO RY NOTICES U/S 143(2) / 142(1). 2.3 TO CONFIRM THE PURCHASE TRANSACTIONS, THE ASSES SEE WAS ASKED TO SUPPLY THE REQUISITE INFORMATION WITH PROOF OF DELI VERY OF MATERIAL. THE ASSESSEE, IN TURN, PRODUCED PURCHASE INVOICES AND P AYMENT DETAILS. HOWEVER, NOT CONVINCED, LD. AO NOTED THAT THE ASSES SEE COULD NOT PROVIDE QUANTITATIVE DETAILS AND ALSO COULD NOT SUB STANTIATE THE DELIVERY ITA NO 1638/MUM/2017 FUTURISTIC CONCEPTS MEDIA LTD ASSESSMENT YEAR 2009-10 3 OF MATERIAL AND CONSEQUENTLY, TREATED THE SAME AS N ON-GENUINE PURCHASES AND ADDED THE SAME TO THE INCOME OF THE A SSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 19/12/2 016 WHERE THE ASSESSEE FAILED TO PRODUCE ANY OF THE PARTY FOR CON FIRMATION OF TRANSACTION BUT CONTENDED THAT THE PURCHASES WERE G ENUINE SINCE THE MATERIAL WAS CONSUMED IN ASSESSEES BUSINESS. FINAL LY, LD.CIT(A) PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS RESTRICTED THE SAME TO 12.5% OF ALLEGED BOGUS PURCHASES AGAINST WHICH THE REVENUE IS IN FURTHER APPEAL BEFORE 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 THE PAYMENTS WERE THROU GH BANKING CHANNELS. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY OF THE SIX ALLEGED BOGUS SUPPLIERS BEFORE LOWER AUTHORITIES, WHICH CAST SERIOUS ITA NO 1638/MUM/2017 FUTURISTIC CONCEPTS MEDIA LTD ASSESSMENT YEAR 2009-10 4 DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SIT UATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEM ENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN T HE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTLY DONE. THEREFORE, FINDING THE SAME QUITE FAI R AND REASONABLE, WE SEE NO REASON TO INTERFERE WITH THE SAME. 7. 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