IRFAN MUKARAB KHILJI, MUMBAI V. INCOME TAX OFFICER, WARD 26(1)(5), MUMBAI

ITA 1816/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7068 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Assessee Lawyers: DINESH RASIKLAL SHAH; SHIYA DOSHI LD ARS
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA.NO.1816/MUM/2018 IRFAN MUKARAB KHILJI ASSESSMENT YEAR- 2009-10 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1816/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) IRFAN MUKARAB KHILJI GALA NO.2 HADIS SUBEKAR INDUSTRIAL ESTATE QURESHI NAGAR KURLA(E),MUMBAI 400 070 / VS. INCOME TAX OFFICER - 26(1)(5) C-10,5 TH FLOOR PRATYAKSHKAR BHAVAN BKC COMPLEX, BANDRA(E) MUMBAI- 400 051 ! ./ ./PAN/GIR NO. AMHPK-4919-P ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : DINESH RASIKLAL SHAH & SHIYA DOSHI, LD.ARS REVENUE BY : N. HEMALATHA, LD. DR / DATE OF HEARING : 24/05/2018 / DATE OF PRONOUNCEMENT : 22/06/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-38 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)- 38/ITO.26(1)(5)/IT.60/2015-16 DATED 30/11/2016 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ITA.NO.1816/MUM/2018 IRFAN MUKARAB KHILJI ASSESSMENT YEAR- 2009-10 2 ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER- 26(1)(5), MUMBAI [AO] U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT,1961 ON 27/03/2015 WHEREIN THE INCOME OF THE ASSESSEE H AS BEEN DETERMINED AT RS.14,20,235/- AFTER CERTAIN ADD ITIONS AS AGAINST RETURNED INCOME OF RS.4.75 LACS FILED BY THE ASSESS EE ON 24/09/2009 WHICH WAS PROCESSED U/S 143(1). THE SOLE ISSUE UND ER APPEAL IS QUANTUM ADDITION AGAINST CERTAIN ALLEGED BOGUS PURCHASES. DURING IMPUGNED AY, THE ASSESSEE WAS ENGAGED AS MANUFACTURE AND TRADER UNDER PROPRIETORSHIP CONCERN NAMELY M.K.FORGE. THE ASSESSEE DECLARED GROSS PROFIT @13.10% AND NET PROFIT @3.22% IN THE IMPUGNED AY. 2.1 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASTHRA REGARDING DEALERS INDULGING IN ISSUING BOGUS PURCHASE BILLS WHEREIN IT WAS FOUND THAT THE ASSESSEE STOOD BENEFICIARY FOR BOGUS PURCHASE BILLS TO THE TUNE OF RS.37,78,365/- FROM EIGHTEEN SUCH PARTIES, THE D ETAILS OF WHICH HAVE BEEN EXTRACTED AT PARA-2 OF THE QUANTUM ASSESSMENT ORDER. CONSEQUENTLY STATUTORY NOTICE U/S 148 DATED 22/03/2 014 WAS ISSUED TO THE ASSESSEE WHICH WAS FOLLOWED BY NOTICES U/S 143( 2) & 142(1). 2.2 THE ASSESSEE DEFENDED THE PURCHASES MADE BY HIM AND SUBMITTED DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE PURCHASES . HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THESE PARTIES ELICITED NO SATISFACTORY RESPONSE AND THE ASSESSEE WAS ASKED TO PRODUCE THE STATED PA RTIES FOR CONFIRMATION OF THE TRANSACTIONS, WHICH ASSESSEE FA ILED TO DO SO. FINALLY NOT CONVINCED, LD. AO ESTIMATED THE QUANTUM ADDITIO N AGAINST THESE PURCHASES @25% WHICH RESULTED INTO AN ADDITION OF R S.9,44,591/- IN THE HANDS OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE CONT ESTED THE SAME ITA.NO.1816/MUM/2018 IRFAN MUKARAB KHILJI ASSESSMENT YEAR- 2009-10 3 WITHOUT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 30/11/2016 WHEREIN THE STAND OF LD. AO GOT CONFIRME D. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE, SHRI. DINESH RASIKLAL SHAH , WHILE DRAWING OUR ATTENTION TO THE DOCUMENTS PLAC ED IN THE PAPER-BOOK CONTESTED THE ADDITIONS MADE BY LOWER AUTHORITIES WHICH WAS CONTROVERTED BY LD. DEPARTMENTAL REPRESENTATIVE , MS.N.HEMALATHA. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDER ED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL KEEPI NG IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE TURNOVER ACHIEVE D BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMEN TS WERE THROUGH BANKING CHANNELS. THE ASSESSEE RECONCILED QUANTITAT IVE DETAILS ALSO TO SOME EXTENT. HOWEVER, AT THE SAME TIME, THE ASSESSE E COULD NOT CONCLUSIVELY SUBSTANTIATE THE DELIVERY OF MATERIAL PURCHASED MADE BY HIM AND FAIL TO PRODUCE ANY OF THE PARTY FOR CONFIR MATION OF ACCOUNT. NOTICES ISSUED U/S 133(6) TO ALL THE TAINTED PARTIES ELICITED NO SATISFACTORY RESPONSE. ALL THESE FACTORS CAST A SERIOUS DOUBT O N ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHA SES TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POS SIBLE PURCHASE MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VA T AGAINST SUCH BOGUS PURCHASES, WHICH LOWER AUTHORITIES HAVE RIGHTLY DONE SO. HOWEVER, KEEPING IN VIEW THE FACT THAT LD. CIT(A) H AS ESTIMATED SIMILAR ADDITIONS IN ASSESSEES OWN CASE FOR AY 2010-11 & 2 011-12 @12.5% AND THEREFORE, WE RESTRICT THE IMPUGNED ADDITIONS T O 12.5% OF ALLEGED ITA.NO.1816/MUM/2018 IRFAN MUKARAB KHILJI ASSESSMENT YEAR- 2009-10 4 BOGUS PURCHASES WHICH COMES TO RS.4,72,295/- AND DELETE THE BALANC E ADDITIONS. 5. RESULTANTLY, THE APPEAL STAND PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE,2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22.06.2018 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. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI