INCOME TAX OFFICER 21(1)(1), Mumbai V. SHRI ANIL P SAWARDEKAR, MUMBAI

ITA 1842/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6750 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE LD
• Assessee Lawyers: AMIT JHAVERI LD
• Keywords: Bogus purchase; Additional evidence; Reassessment proceedings; Set aside
• Section: 133(6); 147; 144

Judgement Text

ITA NO.1842/MUM/2018 ANIL P. SAWARDEKAR ASSESSMENT YEAR :2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.1842/MUM/2018 ( / ASSESSMENT YEAR:2009-10) INCOME TAX OFFICER - 21(1)(1) ROOM NO.103, 1 ST FLOOR PIRAMAL CHAMBERS, PAREL MUMBAI-400 012. / VS. SHRI ANIL P. SAWARDEKAR ROOM NO.234, KAMGAR NAGAR NO.2, NEAR BOMBAY DYEING MILL, NEW PRABHADEVI ROAD MUMBAI-400 088. 9: ./ ./PAN/GIR NO. BINPS-1468-Q ( :< /APPELLANT ) : ( =>:< / RESPONDENT ) REVENUE BY : SHRI SATISH CHANDRA RAJORE- LD. DR ASSESSEE BY : SHRI AMIT JHAVERI - LD.AR / DATE OF HEARING : 31/07/2019 / DATE OF PRONOUNCEMENT : 01/08/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-33, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-33/RG.21/164/2015-16 DATED 15/01/2018 ON FOLLOWING GROUNDS OF APPEAL: - ITA NO.1842/MUM/2018 ANIL P. SAWARDEKAR ASSESSMENT YEAR :2009-10 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCES ON BOGUS PURCHASES OF RS. 1,38,06,689/- TO 25% OF SUCH PURCHASES I.E. RS. 34,51,671/- BY RELYING U PON THE DECISION OF THE HON'BLE ITAT AHMEDABAD, IN CASE OF VIJAY PROTEINS P VT. LTD. VS. CIT (58 ITD 428), WITHOUT APPRECIATING THAT THE FACTS OF THE IN STANT CASE ARE DISTINGUISHABLE IN THAT NO DETAILS WHATSOEVER REGAR DING THE ALLEGED BOGUS PURCHASE TRANSACTIONS WERE SUBMITTED DURING ASSESSM ENT PROCEEDINGS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THE PRIMARY ONUS IS ON T HE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES CLAIMED BY THE ASSESSE E AND THE ASSESSEE HAS NOT DISCHARGED THE SAME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULE 46A OF THE INCOME TAX RULES, 1962. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED. 2.1 FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESI DENT INDIVIDUAL ENGAGED IN TRADING ACTIVITIES WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961 WHER EIN THE ASSESSEE WAS SADDLED WITH CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES FOR RS.138.06 LACS. 2.2 THE REASSESSMENT PROCEEDINGS WERE TRIGGERED AS PER DUE PROCESS OF LAW, PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), MUMBAI THAT THE ASSESSEE OBTAINED HAWALA PURCHASE BILLS AGGREGATING TO RS.138.06 LACS FROM 5 ENTITIES , THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN PARA-3 OF THE ASSESS MENT ORDER. THE ASSESSEE COULD NOT DEFEND THE PURCHASES MADE BY IT FROM THE STATED ENTITIES AND NOTICES ISSUED U/S 133(6) TO ALL THE E NTITIES WERE RETURNED BACK UNSERVED IN ALL THE CASES. THE FACTUAL MATRIX LED THE LD. AO TO DISBELIEVE THE STATED PURCHASE TRANSACTIONS AND ACC ORDINGLY, THE SAME WERE ADDED BACK TO THE INCOME OF THE ASSESSEE WHILE FRAMING THE ASSESSMENT. ITA NO.1842/MUM/2018 ANIL P. SAWARDEKAR ASSESSMENT YEAR :2009-10 3 2.3 BEFORE LD. FIRST APPELLATE AUTHORITY, THE ASSES SEE CONTESTED THE QUANTUM ADDITIONS ON MERITS BY WAY OF ELABORATE WRI TTEN SUBMISSIONS, WHICH HAVE ALREADY BEEN REPRODUCED IN THE IMPUGNED ORDER AND HENCE NOT REPEATED HERE FOR THE SAKE OF BREVITY. THE ASSE SSEE, INTER-ALIA, SUBMITTED THAT THERE WAS DIRECT NEXUS BETWEEN SALES AND PURCHASE AND THE BOOKS OF ACCOUNT WERE DULY AUDITED AS PER LAW. THE PAYMENT TO ALL THE SUPPLIERS WAS THROUGH BANKING CHANNELS AND THER E COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL. THE LD. FIRST APPELLATE AUTHORITY, AFTER DUE CONSIDERATION OF FACTUAL MATRIX AND RELYING UPO N THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN CIT VS. SIMIT P. SHETH [356 ITR 451] & CIT VS. BHOLANATH POLY FAB. P. LTD. [355 ITR 290 ] RESTRICTED THE IMPUGNED ADDITIONS TO 25% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 2.4 THE LD. DR HAS ADVANCED ARGUMENTS TO SUBMIT THA T THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DURING APPELLATE PR OCEEDINGS WERE NOT CONFRONTED TO LD. AO. IT HAS FURTHER BEEN SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN PROVIDING QUANTUM RELIEF TO THE AS SESSEE. ON THE OTHER HAND, LD. AR SUBMITTED THAT IMPUGNED ORDER WOULD NO T REQUIRE ANY INTERFERENCE ON OUR PART. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED RELEVANT MATERIAL ON RECORD AND DELIBERATED ON JUDICIAL PRONOUNCEMENT S AS CITED BEFORE US. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD B E NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASS ESSEES NATURE OF BUSINESS ACTIVITIES. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIER S WERE THROUGH BANKING CHANNELS. AT THE SAME TIME, NOTICES ISSUED U/S 133(6) TO CONFIRM ITA NO.1842/MUM/2018 ANIL P. SAWARDEKAR ASSESSMENT YEAR :2009-10 4 THE TRANSACTIONS DID NO ELICIT ANY SATISFACTORY RES PONSE FROM ANY OF THE SUPPLIERS AND THE ASSESSEE FAILED TO PRODUCE EVEN A SINGLE SUPPLIER TO CONFIRM THE PURCHASE TRANSACTIONS. THE DELIVERY OF MATERIAL REMAINED UNSUBSTANTIATED. THEREFORE, IN SUCH A SITUATION, TH E ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSE SSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE B ENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. FIRST APPEL LATE AUTHORITY HAS RIGHTLY DONE. THEREFORE, THE IMPUGNED ORDER, IN OUR OPINION, WOULD NOT REQUIRE ANY INTERFERENCE ON OUR PART IN VIEW OF THE FACT THAT LD. CIT(A) HAS CLINCHED THE ISSUED IN PROPER PERSPECTIVE. 4. IN RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST AUGUST, 2019. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 01/08/2019 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. :< / THE APPELLANT 2. =>:< / THE RESPONDENT 3. E ( ) / THE CIT(A) 4. E / CIT CONCERNED 5. FG =@H , H , / DR, ITAT, MUMBAI 6. GIJK / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.