JALPESH VINAY KUMAR SHAH , MUMBAI V. ITO 23 (2)(3) , MUMBAI

ITA 174/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7824 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: USHA GAIKWADLD
• Assessee Lawyers: ADITYA LD
• Keywords: Bogus purchase; Reasonable cause
• Section: 143(3); 142(1); 133(6); 143(2); 72; 148

Judgement Text

SHRI JALPESH VINAY KUMAR SHAH ASSESSMENT YEARS: 2009 - 10 TO 2011 - 12 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1. ./ I.T.A. NO. 174 /MUM/20 20 ( / ASSESSMENT YEAR : 2009 - 10 ) & 2. ./ I.T.A. NO. 172 /MUM/2020 ( / ASSESSMENT YEAR : 2010 - 11) & 3. ./ I.T.A. NO. 173/MUM/2020 ( / ASSESSMENT YEAR : 2011 - 12 ) JALPESH VINAY KUMAR SHAH 1401, SUGEE HEIGHTS DWARKESH NAGAR C HS LTD. NAHUR ROAD, MULUND (WEST) MUMBAI - 400 080 / VS. ITO 23(2)(3), 124, 1 ST FLOOR MATRU MANDIR TARDE V R OAD MUMBAI - 400 007 ./ ./ PAN/GIR NO . A AOPS - 0207 - M ( / APPELLANT ) : ( / RESPONDENT ) & 4. ./ I.T.A. NO. 6564 /MUM/201 9 ( / ASSESSMENT YEAR : 2009 - 10 ) & 5. ./ I.T.A. NO. 6565 /MUM/2019 ( / ASSESSMENT YEAR : 2010 - 11) & 6. ./ I.T.A. NO. 6566 /MUM/2019 ( / ASSESSMENT YEAR : 2011 - 12) ITO WARD 26(1)(7 ), ROOM NO. 329, 3 RD FLOOR KAUTILYA BHAVAN, G - BLO CK, BANDRA KURLA COMPLEX (EAST) MUM B AI - 400 051 / VS. JALPESH VINAY KUMAR SHAH 1401, SUGEE HEIGHTS DWARKESH NAGAR CHS LTD. NAHUR ROAD, MULUND (WEST) MUMBAI - 400 080 ./ ./ PAN/GIR NO . A AOPS - 0207 - M ( / APPELLANT ) : ( / RESPONDENT ) SHRI JALPESH VINAY KUMAR SHAH ASSESSMENT YEARS: 2009 - 10 TO 2011 - 12 2 ASSESSEE BY : SHRI ADITYA - LD. A R REVENUE BY : MS. USHA GAIKWAD LD. SR. DR / DATE OF HEARING : 29/07/2021 / DATE OF PRONOUNCEMENT : 01/09/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE SOLE ISSUE IN A FORESAID CROSS - APPEAL S FOR ASSESSMEN T YEAR S (AY) 20 09 - 10 TO 20 11 - 12 IS ESTIMATED ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES. FACTS AS WELL AS ISSUES ARE PARI - MATERIA THE SAME IN ALL THE THREE YEARS AND IT IS ADMITTED POSITION THAT ADJUDICATION IN ANY ONE YEAR SHALL EQUALLY APPLY TO THE O THER YEAR S ALSO. FOR THE PURPOSE OF ADJUDICATION, THE APPEAL FOR AY 2009 - 10 IS TAKEN AS THE LEAD YEAR WHICH ARISES OUT OF THE ORD ER OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 40 , MUMBAI [CIT(A)], DATED 25 /0 7 /20 19 IN THE MATTER OF ASSESSMENT FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) R.W.S.147 ON 22/03/2014. THE ASSESSEE BEING RESIDENT INDIVIDUAL IS STATED TO BE ENGAGED IN TRADING OF COMPUTER PERIPHERALS UNDER PROPRIETORSHIP CONCERN NAMELY M/S JAYA ENTERPRISES. 2. THE REGISTRY HAS NOTED A DELAY OF 72 DAYS IN ASSESSEES APPEAL S . THE CONDONATION OF THE SAME HAS BEEN SOUGHT BY THE ASSESSEE ON THE STRENGTH OF CONDONATION PETITION DATED 06/01/2020 WHICH IS SUPPORTED BY THE AFFIDAVIT OF THE ASSESSEE. IT HAS BEEN SUBMITTED THAT DELAY HAS OCCURRED DUE TO AD VERSE MEDICAL CONDITIONS BEING FACED BY THE ASSESSEES SON. AFTER GOING THROUGH THE CONDONATION PETITION AND THE AFFIDAVIT OF THE ASSESSEE, THE BENCH FORMED AN OPINION THAT THERE WAS REASONABLE CAUSE IN LATE FILING OF THE SE APPEAL S AND THEREFORE, THE DELAY SHRI JALPESH VINAY KUMAR SHAH ASSESSMENT YEARS: 2009 - 10 TO 2011 - 12 3 WAS TO BE CONDONED. ACCORDINGLY, WE PROCEED WITH THE ADJUDICATION OF APPEALS ON MERITS. 3. THE LD. AR PLEADED TO RESTRICT THE ADDITION TO THE EXTENT OF 2.5% AS DONE BY TRIBUNAL IN THE CASE OF ASSESSEES BROTHER TITLED AS DHARMESH VINAY KUMAR SHAH, ITA NOS . 4881/MUM/2015 & ORS. ORDER DATED 21/04/2017. THE COPY OF THE ORDER HAS BEEN PLACED ON RECORD. THE LD. DR, ON THE OTHER HAND, PLEADED FOR RESTORATION OF ASSESSMENT ORDER. OUR ADJUDICATION WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.1 THE MATERIAL FACTS IN AY 2009 - 10 ARE THAT THE ASSESSEES CASE WAS REOPENED PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA WHEREIN IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS.314.44 LACS FROM 11 ENTITIES AS TABULATED IN P ARA - 6 OF THE ASSESSMENT ORDER. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED ON 23/03/2013 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 142(1) & 143(2) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THESE TRANSACTIONS. 4.2 IN SUPPORT OF PURCHASES, THE ASSESSEE PRODUCED LEDGER EXTRACTS, COPIES OF PURCHASE BILLS, CORRESPONDING SALES, TRANSPORTATION BILLS ETC. THE PAYMENTS WERE STATED TO BE MADE THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THE SUPPLIERS DID NOT ELICIT ANY SATISFACTORY RESPONS E. FINDING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE PURCHASES, THE SAME WERE ADDED TO THE INCOME OF THE ASSESSEE. 5. THE LD. CIT(A), AFTER CONSIDERING ASSESSEES SUBMISSIONS, NOTED THAT SALES WERE ACCEPTED BY LD. AO AND WITHOUT PURCHAS ES, THERE COULD BE NO SALES. THEREFORE, IT COULD BE CONCLUDED THAT THE ASSESSEE PURCHASED GOODS FROM GREY MARKET AND PROCURED BILLS FROM THESE SHRI JALPESH VINAY KUMAR SHAH ASSESSMENT YEARS: 2009 - 10 TO 2011 - 12 4 SUPPLIERS TO SUPPRESS THE PROFITS. RELYING UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SH ETH (356 ITR 451), THE ESTIMATION WAS MADE @12.5%. THE SAID ADJUDICATION HAS GIVEN RISE TO CROSS - APPEALS BEFORE US. 6 . GOING BY THE FACTUAL MATRIX, WE CONCUR WITH THE ADJUDICATION OF LD. CIT(A) THAT SALES TURNOVER WAS NOT UNDER DOUBT AND THERE COULD BE NO SALES WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE FACT THAT THE ASSESSEE WAS ENGAGED IN TRADING ACTIVITIES. THEREFORE, IT WAS A FIT CASE TO MAKE ESTIMATED ADDITIONS. WE FIND THAT UNDER SIMILAR FACTUAL MATRIX, COORDINATE BENCH OF THIS TRIBUNAL I N THE CITED DECISION HAS ESTIMATED THE ADDITION @2.5% IN CASE OF SIMILARLY PLACED ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DIRECT LD. AO TO RESTRICT THE ADDITION TO 2.5% OF SUSPICIOUS PURCHASES. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE STANDS PARTLY ALLOWED WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. 7. FACTS IN AY 2010 - 11 & 2011 - 12 ARE SIMILAR WHEREIN LD. AO HAS DISALLOWED ENTIRE PURCHASES. HOWEVER, LD. CIT(A) HAS ESTIMATED THE ADDITIONS @12.5% WHICH IS GIVEN RISE TO C ROSS - APPEALS. FACTS BEING PARI - MATERIA THE SAME AS IN AY 2009 - 10, WE DIRECT LD. AO TO RESTRICT THE ADDITION TO THE EXTENT OF 2.5% OF SUSPICIOUS PURCHASES. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED WHEREAS THE APPEAL OF THE REVEN UE S TANDS DISMISSED. SHRI JALPESH VINAY KUMAR SHAH ASSESSMENT YEARS: 2009 - 10 TO 2011 - 12 5 8. ALL THE APPEALS FILED BY THE ASSESSEE STAND PARTLY ALLOWED WHEREAS THE APPEALS FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 1 ST SEPTEMBER, 2021 SD/ - SD/ - (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 01/09/2021 SR.PS, JAISY VARGHESE / 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, MUMBA I.