Continuity Printers, Navnidhi Indl Estate, Sewree V. ACIT 20(1), Piramal Chambers, Lalbaug

ITA 1784/MUM/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0919 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 14-07-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 08-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 147; 69; 69C; 133(6); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORESHRI. AMARJIT SINGH (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER) ITA No.1784/Mum/2024 (Assessment Year: 2011-12) Continuity Printers 31, NavnidhiIndl Estate, A.D.Marg, Sewree, Maharastra-400 015 PAN : AAMFC5014C vs ACIT 20(1) Piramal Chamber, Lalbaug, Parel, Maharastra-400012 APPELLANT RESPONDENT Assessee represented by Shri Ashok Bansal a/w Shri Ajay Daga Department represented by Shri Dhiraj Kumar, Sr. DR Date of hearing 15/07/2024 Date of pronouncement 16/07/2024 ORDER PER ANIKESH BANERJEE (JM): Instant appeal of the Revenue was filed against the order of the Ld. Commissioner of Income Tax, Appeal ADDL/JCIT (A)-6 Kolkata [in short, ‘Ld.CIT(A)’], date of order 12/02/2024 for A.Y. 2011-12 order passed under section 250 of the Income-tax Act, 1961(in short, the Act). Impugned order was emanated from the order of the ld.Asst. Commissioner of Income Tax-20(1), Mumbai (in short ld. AO), order passed under section 143(3)r.w.s. 147, date of order- not specified. 2 ITA No.1784 /Mum/2024 Continuity Printers 2. The Revenue has taken the following grounds: - “1. The Id. CIT (A) erred in holding that the jurisdiction u/s 147 of the Act was rightly assumed by the AO. 2. The Id. CIT(A) erred in not adjudicating ground no.2 of Grounds of Appeal raised before him with regard to validity of addition made u/s 69 C of the Act. 3. The Id. CIT(A) erred in dismissing ground no.3 of Grounds of Appeal raised before him challenging the merits of the disallowance made by the AO of alleged bogus purchases of Rs.2220594/-. 4. The Id. CIT (A) erred in not adjudicating the without prejudice ground no.5 of Ground of Appeal raised before him with regard to restricting the disallowance to 12.50% of the alleged bogus purchased based on decisions of the ITAT & high courts in the matter. 5. The Id. CIT(A) in disposing the appeal erred in not considering the submissions made before him. Your appellant, therefore, submits that the assessment order be annulled and in the alternative suitable relief be allowed. Your appellant craves leave to add to, delete, amend or alter all or any of the grounds of appeal at or before the date of hearing.” 3. Brief facts of the case are that the assessment was completed under section 148on the basis ofinformation received from the DGIT(Inv) related to bogus purchase from the different parties which amount to Rs.22,20,594/-. The ld.AO made the addition of disputed purchases with the total income of the assessee U/s 69C of the Act. The aggrieved assessee filed an appeal before the ld. CIT(A).Ld.CIT(A) passed the appeal order andrejected the appeal of the assessee. Being aggrieved on the appeal order, the assessee filed an appeal before us. 4. The ld. AR vehemently argued and prayed for restrict the addition @12.5% of the bogus purchase determined by the ld. AO. The ld. AR furter argued that the transactions with the purchasers are through banking channel, the invoice and road challans are duly filed before the revenue authority as proof of genuineness of the transaction. But the ld. AO only relied on the information of the 3 ITA No.1784 /Mum/2024 Continuity Printers MaharastraVAT department and added back the entire disputed purchase amount u/s 69C of the Act. The ld. AR has drawn our attention on the relevant paragraph of assessment order which is reproduced below: - Hawala Tin Hawala Name Hawala PAN F.Y. Amount (In Rs.) 27450526556V DEV ENTERPRISES ACGPG0684C 2010-11 199,059 27630780500V BANJARA ENTERPRISES AGKPM3256C 2010-11 457,095 27450597851V VIHOL ENTERPRISES AFFPV2972L 2010-11 515,277 27440573073V PADMAVATI ENTERPRISES ACUPL8372L 2010-11 1,048,300 TOTAL 22,20,594 3. As per the above information received from the Directorate of Investigation, Mumbai during the previous year 2010-11 relevant to A.Y. 2011-12, the assessee has taken bogus bills amounting to Rs. 22,20',594/- from the above said parties. 3.1 Since the assessee had carried out business transactions with the above said parties, keeping in view the specific information received from Sales Tax Department through 'the Investigation Directorate regarding bogus purchase transaction, the A.O recorded the reasons for belief that income chargeable to tax has escaped for A.Y. 2011-12 and accordingly issued a notice u/s.148 of the Act, to the assessee on 28.03.2018.” 5. The ld. DR vehemently argued and placed that 12.5% of the disputed purchase amount to Rs.22,20,594/- is unjustified and prayed for upheld the addition. The ld. DR relied on the appeal order. The relevant paragraphs are reproduced as below: - “V. DECISION:- ' I have gone through assessment order passed by assessing officer (AO) and detail submission made by appellant. The fact of the case is that AO had added Rs. 22,20,594- on account of bogus purchase made from accommodation entry providers. However, appellant refutes the same. 4 ITA No.1784 /Mum/2024 Continuity Printers It is seen that appellant is engaged in the business of printing. AO had received information from the Sales Tax Department through the O/o the DGIT (lnv),Mumbai, in respect of bogus purchasers along with a copy of statement of the hawala dealers. On perusal of the information, AO had noticed that the appellant had procured bogus purchase bills from the four parties. AO had independently initiated third party enquiry specifically on these four parties. AO had issued notices u/s 133(6) of the Act to the alleged parties; they remained unserved by the postal authorities. Thereafter assessee was asked to produce the alleged parties to verify the genuineness of the purchases.; Assessee could not produce the parties. Further, it is noticed that the appellant -had only furnished invoices of purchase and sales and ledger account to substantiate the claim of relevant purchases as genuine. The invoice furnished by the appellant cannot be treated as genuine in view of the fact that the concerned parties had confessed before the Sales Tax. Authorities that they were in the business of issuing bills without actually 'selling any material. Moreover, it is seen that the appellant was unable to produce any supporting third party evidences like transport receipts of the alleged goods,, ibrry receipts, delivery challans, other transportation details, details of weighments, excise^ gate pass, Octroi/ LBT payments,any other Statutory records etc. Therefore, mere furnishing of invoices/bills only do not prove the genuiness of transaction. As above, there is no infirmity in AO's action. In the result, appeal filed by appellant on this ground is dismissed.” 5 ITA No.1784 /Mum/2024 Continuity Printers 6. We heard the rival contentions and considered the documents available on record. The issue related to addition of @12.5% of the disputed purchases is already decided by this bench in other cases. Considering the binding precedence, we set aside the appeal order. On the other hand, the sales were also executed depending on the purchases of materials. In the transaction, the purchases and sales are interlinked during this impugned financial year. We respectfully relied on the order of Hon’ble Bombay High Court in case of PCIT vs S.V. Jiwani (2022) 145 taxmann.com 230 (Bom) wherein involving similar set of facts and circumstances of the case, the Hon’ble jurisdictional High Court has upheld the decision of the Hon’ble ITAT, Mumbai Bench that addition to the extent of @12.5% of the bogus purchases is fair and reasonable. The Ld. Assessing Officer had not rejected the sale of assessee but only the purchase. Hence, the addition amount of Rs. 22,20,594/- is quashed. We direct the ld. AO to restrict the addition @12.5% on bogus purchase amount to Rs. 22,20,594/- which works out to Rs. 277,574/-. The addition is restricted amount to Rs. 2777,574/-. The appeal of the assessee is considered on merit & Ground no-4 is allowed. So, the other grounds remain only for academic purpose. 8. In the result, appeal in ITA No. 1784/Mum/2024 of the assessee is allowed. Sd/- (AMARJIT SINGH) Sd/- (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, दिन ांक/Dated: 16/07/2024 Pavanan 6 ITA No.1784 /Mum/2024 Continuity Printers Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai