ANIL KUMAR GARG, MUMBAI V. ACIT 21(3), MUMBAI

ITA 1845/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1768 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: N AVNEET KUMAR ARORA
• Keywords: Bogus purchase; Principle of natural justice; Accommodation entries; Onus to prove
• Section: 143(3); 133(6); 37(1); 68

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 1845 /MUM/2016 ( / ASSESSMENT YEAR : 2010-11) SHRI ANIL KUMAR GARG, D-1404, LAKE PLEASANT, LAKE HOME, A.S. MARG, MUMBAI -400076. / V. ACIT 23(3), MUMBAI. ./ PAN : AAUPG1553C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI NAVNEET KUMAR ARORA REVENUE BY : SHRI A. RAMACHANDRAN / DATE OF HEARING : 06-10-2016 / DATE OF PRONOUNCEMENT : 08-12-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 1845/MUM/2016, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 11 TH JANUARY, 2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 38, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2010- 11, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE PENALTY ORDER DATED 27 TH SEPTEMBER, 2013 PASSED BY THE LEARNED ASSESSING OF FICER (HEREINAFTER CALLED THE AO) U/S 271(1)(C) OF THE INCOME-TAX AC T,1961 (HEREINAFTER CALLED THE ACT). ITA 1845/MUM/2016 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. IN THE PRESENT CASE I FIND THAT THE ADDITION WA S MADE PURELY ON THE BASIS OF FINDINGS MADE BY THE SALES T AX DEPARTMENT WHICH WAS BEYOND THE CONTROL OF ASSESSEE . THERE IS NO CLINCHING EVIDENCE AS REGARDS TO THE CONCEALMENT. 2. AFTER A LAPSE OF PERIOD OVER A TIME WHEN SUPPLIE R WERE DECLARED HAWAL TRADERS ASSESSEE EXPRESSED INAB ILITY TO PRODUCE THE PARTIES FOR CROSS-EXAMINATION. IT IS TO BE VIEWED IN THE CONTEXT THAT THE PARTIES WERE NOT DIR ECTLY KNOWN TO THE ASSESSEE. IN THE CONTEXT OF THE PROVIS IONS OF SECTION 68 OF THE ACT, IT WOULD NOT BE OUT OF PLACE TO MENTION THAT ONE HAS TO KEEP IN MIND THE LEGAL MAXI M; 'LEX NON COGIT AD IMPOSSIBILLA' (WHICH MEANS THE LAW DOE S NOT COMPEL A MAN TO DO WHICH HE CANNOT POSSIBLY PERFORM ). EXPERIENCING THESE DIFFICULTIES THE ASSESSEE SURREN DERED THE AMOUNT FOR TAXATION. AS SAID IN THE PETITION, T HE PURPOSE WAS TO BUY PEACE AND AVOID LITIGATION THE ASSESSING OFFICER DID NOT RECORD ANY FINDING THAT T HE EXPLANATION OFFERED BY THE ASSESSEE WAS FALSE AND T HE BONA FIDE WAS NOT PROVED. AS SUCH, THE CONDITIONS PRECEDENT FOR INVOKING EXPLANATION 1 TO SECTION 271 (L)(C) OF THE ACT DID NOT EXIST IN THE FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE. ONCE IT IS HELD THAT THE CASE OF THE ASSESSEE FALLS BEYOND THE KEN OF EXPLANATION 1 TO SECTION 27 1(L}(C), THE CONCLUSION IS IRRESISTIBLE THAT THE CASE DOES N OT COME WITHIN THE SWEEP OF THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99. IT COMES WITHIN THE AMBIT OF THE DECISION LAID DOWN IN THE CASE OF CIT V. SURESH CHANDRA MITIAL [2001] 2511TR 9 (SC}. SO THERE IS NO MISSTATEMENT OF PERTICULARS, OR CONCEAL MENT OF THE PERTICULARS OF THE INCOME,HENCE OUR CASE IS NOT COVERED UNDER SECTION 271(1)(C}. IN VIEW OF THIS TH E DEMAND RAISED BY THE LEARNED ITO IS BAD IN LAW ,AND SHOULD BE SET ASIDE IN TOTO. 3. SINCE ASSESSEE HAS PAID THE TAXES IN ORDER TO BU Y PIECE DUE TO DIFFERENCE OF OPENION,THIS SHOWES THAT THE ASSESSEE IS NOT INTERESTED OR OF THE VIEW TO AVOID THE TAXES OR HAVING THE INTENTION NOT TO PAY TAXES, IN VIEW OF ITA 1845/MUM/2016 3 THIS WE HEREBY PRAY THAT THE PENALTY UNDER SECTION 271(1)(C} SHOULD BE SET ASIDE IN TOTO. 4. THE LEARNED ACIT DISALLOWED THE ABOVE SAID PURCH ASE UNDER SECTION 37(1) AS EXPENDITURE, INSPITE OF KNOW ING THE FACTS THAT THE LIFT /CRANES CAN NOT WORK WITHOUT SP ARE PARTS AND ASSESSEE CAN NOT PROVIDE SERVICES WITHOUT MAINTENANCE. IT IS WELL SETTLED LAW THAT CERTIN PAR T OF THE EXPENDITURE CAN BE DISALLOWED AND NOT THE FULL EXPENDITURE IN CASE OF PURCHASES DECLARED FROM HAWA LA TRADERS, THE ITAT HAS TAKEN THE SAME VIEW IN VARIOU S CASES, BUT INSPITE OF THAT THE ASSESSEE HAS PAID THE TAX J UST TO BUY THE PIECE. IN VIEW OF ABOVE THE PENALTY IMPOSE UPON ASSESSEE SHOULD BE SET ASIDE IN TOTO. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. DISALLOWED BOGUS PURCHASES AM OUNTING TO RS. 25,98,278/- ON ACCOUNT OF SPARES AND PARTS. THE AS SESSEE IS ENGAGED IN THE BUSINESS OF RENTING OF BOOM AND SCISSOR LIFTS WHICH ARE USED IN THE INFRASTRUCTURE PROJECTS. PENALTY PROCEEDINGS WERE INITIATED BY THE A.O. U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. IT WAS OBSERVED BY THE A.O. THAT THE ASSESSEE HAS D EBITED AN AMOUNT OF RS. 27,24,342/-. ON PERUSAL OF THE DETAILS OF PURCHASE S, THE A.O. NOTICED THAT OUT OF THE ABOVE TOTAL PURCHASES, THE ASSESSEE HAS MADE PURCHASES FROM FOLLOWING THREE PARTIES:- SR NO. NAME OF THE PARTY AMOUNT (IN RS) 1 M/S ARIHANT TRADERS 8,60,715/- 2 M/S ADINATH TRADING CO. 7,87,501/- 3 M/S HARSH CORPORATION 9,50,062/- TOTAL 25,98,278/- THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDING S ISSUED NOTICES U/S 133(6) OF THE ACT TO THE ABOVE PARTIES SEEKING DETA ILS OF THE TRANSACTION DONE BY THE PARTIES WITH THE ASSESSEE FOR THE PERIOD FRO M 01-04-2009 TO 31-03- ITA 1845/MUM/2016 4 2010 ALONGWITH COPY OF LEDGER, BANK STATEMENT, BALA NCE SHEET WITH SCHEDULES AND ACKNOWLEDGMENT OF INCOME-TAX RETURN FOR ASSESSM ENT YEAR 2010-11 , BUT THE NOTICES RETURNED BACK WITH THE REMARK LEFT ADD RESSES. THE ASSESSEE WAS CONFRONTED WITH THE SAME AND ACCORDINGLY THE ASSESS EE SUBMITTED NEW ADDRESSES OF THE PARTIES AND AGAIN NOTICES WERE ISS UED BY THE AO U/S 133(6) OF THE ACT TO THESE PARTIES ON NEW ADDRESS , WHICH AGAIN RETURNED BACK WITH THE REMARKS NON-KNOWN/NOT CLAIMED. THE A.O. ASKE D THE ASSESSEE TO PRODUCE THE THESE PARTIES AND JUSTIFY THE EXPENDITU RE FOR PURCHASES FROM THESE PARTIES AMOUNTING TO RS.25,98,278/-, BUT THE ASSESSEE NEITHER PRODUCED THE PARTIES NOR FURNISHED ANY DOCUMENTARY EVIDENCES TO ESTABLISH THE GENUINENESS OF THE PURCHASES FROM ABOVE THREE P ARTIES. THE A.O. OBSERVED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE THREE PARTIES NAMELY M/S ARIHANT TRADERS, M/S ADINATH TRADING CO. AND M/S. H ARSH CORPORATION ARE IN EXISTENCE AND THAT THE PURCHASES MADE FROM THEM ARE GENUINE. IT WAS FURTHER OBSERVED BY THE AO THAT THE ASSESSEE WAS GIVEN SUFF ICIENT OPPORTUNITIES TO PRODUCE THE ABOVE PARTIES BUT THE ASSESSEE FAILED T O DISCHARGE HIS ONUS TO PROVE THE PURCHASES AS GENUINE. THE A.O. FURTHER OB SERVED THAT THE NAMES OF THESE THREE PARTIES WERE ALSO APPEARING IN THE HAWA LA LIST OF THE SALES TAX DEPARTMENT WHEREBY THESE PARTIES WERE MARKED AS HAW ALA DEALERS WHO WERE MERELY ISSUING BILLS TO VARIOUS PARTIES WITHOUT ACT UAL PURCHASE AND SALE OF GOODS HAVING TAKEN PLACE. THE A.O. ACCORDINGLY TREA TED THE PURCHASES MADE FROM M/S ARIHANT TRADERS, M/S ADINATH TRADING CO. & M/S HARSH CORPORATION WERE NOT GENUINE PURCHASES AND WHILE CO MPUTING THE PROFITS AND GAINS OF THE BUSINESS OF THE ASSESSEE, THE A.O DISA LLOWED THE EXPENDITURE ON PURCHASES FROM THE SAID THREE PARTIES AMOUNTING TO RS.25,98,278/- U/S 37(1) OF THE ACT. THE A.O. ALSO LEVIED PENALTY U/S 271(1) (C) OF THE ACT AMOUNTING TO RS. 8,02,868/- AS THE ASSESSEE COMMITTED DEFAULT WI THIN THE MEANING OF EXPLANATION 1 OF SECTION 271(1)(C) OF THE ACT HAVIN G CONCEALED INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME, VIDE PE NALTY ORDER DATED 27-09- 2013 PASSED BY THE AO U/S 271(1)(C) OF THE ACT. ITA 1845/MUM/2016 5 4. AGGRIEVED BY THE PENALTY ORDER DATED 27-09-2013 PASSED BY THE A.O. U/S 271(1)(C) OF THE ACT, THE ASSESSEE FILED FIRST APP EAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A) , THE ASSESSEE CONTENDED T HAT ADDITIONS HAVE BEEN MADE PURELY ON THE BASIS OF FINDINGS MADE BY THE SA LES TAX DEPARTMENT WHICH WAS BEYOND THE CONTROL OF ASSESSEE AND THAT THERE W AS NO CLINCHING EVIDENCE AS REGARDS TO THE CONCEALMENT OF INCOME. IT WAS SUB MITTED THAT THE PRINCIPLES OF NATURAL JUSTICE REQUIRES THAT CONFESSIONAL STATE MENT SHOULD BE MADE AVAILABLE TO THE ASSESSEE AND SHOULD BE PROVIDED WI TH AN OPPORTUNITY TO CROSS-EXAMINE THE WITNESS. IT WAS SUBMITTED THAT TH E PURCHASE TRANSACTIONS WERE MADE THROUGH BROKERS AND CHEQUE PAYMENTS WERE MADE , AND ONCE THE SUPPLIERS WERE DECLARED HAWALA TRADERS, ASSESSEE EX PRESSED HIS INABILITY TO PRODUCE THE PARTIES AND THAT THE PARTIES WERE NOT D IRECTLY KNOWN TO THE ASSESSEE. IT WAS FURTHER CONTENDED THAT THE ASSESSE E SURRENDERED THE AMOUNT FOR TAXATION PURPOSE TO BUY PEACE AND AVOID LITIGAT ION AND THAT THE A.O. DID NOT RECORD ANY FINDING THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS FALSE AND THE BONAFIDE WAS NOT PROVED.IT WAS SUBMITTED TH AT LAW DOES NOT REQUIRE MAN TO DO IMPOSSIBLE AND AS THE PARTIES FROM WHOM P URCHASES WERE MADE WERE DECLARED HAWALA DEALERS BY SALES TAX DEPARTMEN T AND THEREAFTER NOT TRACEABE, THE ASSESSEE EXPRESSED ITS INABILITY TO P RODUCE THEM . IT WAS SUBMITTED THAT THE CONDITIONS PRECEDENT FOR INVOKIN G EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT DID NOT EXIST IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THUS, THE ASSESSEE PRAYED THAT THE PENALTY LE VIED SHOULD BE SET ASIDE AND RELIEF MAY BE GRANTED. THE ASSESSEE RELIED UPON DECISION IN THE CASE OF K.P.MADHUSUDHANAN V. CIT (2001) 251 ITR 99(SC) AND ALSO IN THE CASE OF CIT V. SURESH CHANDRA MITTAL (2001) 251 ITR 9(SC). THE LD. CIT(A) OBSERVED THAT THE ASSESSMENT WAS COM PLETED U/S 143(3) OF THE ACT WHEREIN THE AO DISALLOWED AN AMOUNT OF RS. 25,9 8,278/- TREATING ITA 1845/MUM/2016 6 EXPENDITURE ON PURCHASE OF SPARE PARTS AS BOGUS/NON GENUINE AGAINST WHICH THE ASSESSEE DID NOT FILE APPEAL BEFORE THE CIT(A) AND THEREFORE SUCH ORDER PASSED BY THE AO STANDS FINAL ON MERITS AS FAR AS Q UANTUM ADDITIONS WERE CONCERNED. THE REVENUE DISALLOWED THE EXPENSES BASE D UPON THE INFORMATION/MATERIAL SUPPLIED BY DGIT (INV.) MUMBAI AND HELD THAT THE ASSESSEE HAD ONLY TAKEN ACCOMMODATION ENTRIES. THE AO RELIED ON THE INFORMATION OF THE SALES TAX AUTHORITIES AS GIVEN B Y DGIT(INV.), MUMBAI, AS PER WHICH THE SUPPLIERS WERE STATED TO HAVE GIVEN O NLY BOGUS BILLS WITHOUT SUPPLYING ANY MATERIAL. THE LD. CIT(A) FURTHER OBSE RVED THAT THE ASSESSEE FAILED TO PRODUCE ANY OF THE AFORESAID PARTIES BEFO RE THE A.O.. NO DETAILS REGARDING MODE OF TRANSPORTATION, TRANSPORTER'S NAM E & ADDRESS, VEHICLE NUMBER, WEIGHBRIDGE COPY, OCTROI RECEIPTS ETC. WERE FURNISHED TO SUBSTANTIATE ACTUAL DELIVERY OF GOODS AS CLAIMED BY THE ASSESSEE . THE NOTICES WERE ISSUED U/S 133(6) OF THE ACT TO THE SAID SUPPLIERS BUT THE SAME COULD NOT BE SERVED DUE TO INCORRECT PARTICULARS AND FURTHER THE ASSESS EE COULD NOT FURNISH THE CORRECT ADDRESSES OF THE SAID PARTIES WHICH COULD E STABLISH BONAFIDE/GENUINENESS OF THE SUPPLIERS APPEARING IN THE BOOKS OF THE ASSESSEE. THE NOTICES WERE SENT TWICE ON THE OLD AS WELL AS N EW ADDRESSES FURNISHED BY THE ASSESSEE BUT THE ASSESSEE COULD NEITHER PRODUCE THE PARTIES FOR VERIFICATION NOR TRACE THE CURRENT ADDRESS OF THE S AID SUPPLIERS AND EXPRESSED HIS INABILITY TO TRACE THE PRESENT WHEREABOUTS AND VOLUNTARILY OFFERED TRANSACTION OF PURCHASES FROM THE PARTIES AMOUNTING TO RS. 25,98,278/- AS ADDITIONAL INCOME FOR THE IMPUGNED ASSESSMENT YEAR TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION. THE AO DISALLOW ED THE SAID SUM AND ADDED THE SAME TO INCOME OF THE ASSESSEE U/S 37(1) OF THE ACT. THUS, IT WAS ESTABLISHED THAT IT WAS DUE TO THE INABILITY OF THE ASSESSEE TO GIVE THE CORRECT ADDRESSES OF THE PARTIES, THE ASSESSEE OFFERED TO S URRENDER AN AMOUNT OF RS. 25,98,278/- WHICH WERE THE PURCHASES SHOWN FROM SUC H PARTIES DURING THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) HELD THAT THE ASSESSEE COULD NOT PRODUCE ANY COGENT EVIDENCE BEFORE THE A.O DURING T HE COURSE OF ASSESSMENT ITA 1845/MUM/2016 7 PROCEEDINGS WHICH COULD HAVE LED CREDENCE TO THE SU BMISSION AND EXPLANATION OFFERED BY THE ASSESSEE AND ESTABLISH T HE GENUINENESS OF SUCH PURCHASES. THE BURDEN OF PROVING THAT A PARTICULAR EXPENDITURE WAS GENUINE IS ON THE ASSESSEE. BY RELYING ON THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF MAK DATA PRIVATE LIMITED V. CIT IN CIVIL AP PEAL NO 9772 OF 2013 REPORTED IN (2013) 38 TAXMANN.COM 448(SC) AND K.P. MADHUSUDHANAN V. CIT (2001) 169 CTR 489 (SC) , THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT , VIDE APPELLATE ORDE RS DATED 11.01.2016 PASSED BY LEARNED CIT(A). 6. AGGRIEVED BY THE APPELLATE ORDER DATED 11.01.201 6 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RENTING OF BOOM AND SCISSOR LIFT S WHICH ARE USED IN THE INFRASTRUCTURE PROJECTS. THE ASSESSEE PURCHASED THE SPARE PARTS FOR USE IN THE CRANE WHICH IS FOR THE PURPOSES OF HIS BUSINESS. T HE SAID EXPENSES OF RS. 25,98,278/- WAS DISALLOWED BY THE A.O. ON THE GROU ND THAT THESE WERE BOGUS PURCHASES MADE FROM HAWALA DEALERS. IT WAS THE SAY OF LEARNED COUNSEL FOR THE ASSESSEE THAT AO HAS ALLEGED THAT NO SUPPLY OF MATERIAL WAS MADE BY THE SUPPLIER AND ONLY ACCOMMODATION BILLS WERE SUBMITTE D. THE ENTIRE PURCHASES WERE ADDED BY THE A.O. DURING THE ASSESSMENT PROCEE DINGS WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE BY FILING FIRST AP PEAL BEFORE THE LD. CIT(A) IN ORDER TO BUY PEACE AND AVOID PROTRACTED LITIGATION. THUS, IT WAS SUBMITTED BU LEARNED COUNSEL FOR THE ASSESSEE THAT THE QUANTUM A SSESSMENT WAS ACCEPTED BY THE ASSESSEE AND NO APPEAL WAS FILED IN ORDER TO BUY PEACE AND AVOID PROTRACTED LITIGATION. THE LD. COUNSEL SUBMITTED T HAT THE PURCHASE OF SPARE PARTS WERE MADE FOR THE PURPOSE OF ASSESSEES BUSIN ESS WHICH IS TO BE USED FOR THE CRANES AND THE PAYMENTS WERE MADE THROUGH C HEQUES. THE A.O. DISALLOWED 100% EXPENSES TOWARDS THESE SPARE PART P URCHASES. THE ASSESSEE ITA 1845/MUM/2016 8 ACCEPTED THE ASSESSMENT MADE BY THE A.O. AND PAID T HE TAXES IN THE QUANTUM ASSESSMENT AND NO APPEAL WAS PREFERRED. IT WAS SUBM ITTED THAT WHEN THE PURCHASES WERE MADE , THE PARTIES WERE AVAILABLE AN D THEIR TIN WAS ACTIVE . THE PAYMENTS WERE MADE THROUGH BROKERS THROUGH CHEQ UE. AFTER THE PARTIES WERE DECLARED AS HAWALA DEALERS,THESE PARTIES WERE NOT TRACEABLE AND HENCE THE NOTICES ISSUES U/S 133(6) OF THE ACT BY THE AO AT OLD ADDRESS AND NEW ADDRESS RETURNED UNSERVED AND THE PARTIES COULD NOT BE PRODUCED. 8. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS MAD E ALLEGED SPARE PARTS PURCHASES FROM THREE PARTIES WHO WERE INDULGING IN HAWALA ACTIVITIES AND BOGUS BILLS WERE PROCURED BY THE ASSESSEE FROM THES E HAWALA DEALERS TO INFLATE EXPENSES AND TO REDUCE INCOME TO EVADE TAXES. HE S UBMITTED THAT NO SUPPLIES WERE MADE BY THE SUPPLIER AND THESE ARE ME RELY ACCOMMODATION ENTRIES. THE ASSESSEE HAS MADE BOGUS PURCASES TO S UPPRESS THE PROFIT AND TO EVADE THE TAXES. NOTICE U/S 133(6) WAS ISSUED BY T HE A.O. BUT THE NOTICES WERE RETURNED BACK BY THE POSTAL AUTHORITIES. THE ASSESSEE HAD ACCEPTED THE QUANTUM ADDITION AND NO APPEAL WAS FILED WHICH CONF IRMS THAT THE ASSESSEE HAS MADE BOGUS PURCHASES AND ACCOMMODATION BILLS WE RE PROCURED. THE LD. D.R. RELIED ON THE DECISION OF HONBLE SUPREME COUR T IN THE CASE OF MAK DATA P. LTD. V. CIT (2013) 38 TAXMANN. COM 448(SC). 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE LEGAL DECISIONS RELIED UPON. WE HAVE OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REN TING OF BOOM AND SCISSOR LIFTS WHICH ARE USED IN THE INFRASTRUCTURE PROJECTS . WE HAVE OBSERVED THAT THE ASSESSEE HAS ALLEGEDLY PURCHASED SPARE PARTS COSTIN G RS. 25,98,278/- FROM THE FOLLOWING THREE PARTIES WHO ARE ALLEGED BY REVE NUE TO BE HAWALA DEALERS AND THESE PURCHASES ARE ALLEGED BY REVENUE TO BE B OGUS PURCHASES BEING ACCOMMODATION ENTRIES. ITA 1845/MUM/2016 9 SR NO. NAME OF THE PARTY AMOUNT (IN RS) 1 M/S ARIHANT TRADERS 8,60,715/- 2 M/S ADINATH TRADING CO. 7,87,501/- 3 M/S HARSH CORPORATION 9,50,062/- TOTAL 25,98,278/- IT IS THE ALLEGATION OF THE REVENUE THAT BASED UPON THE INFORMATION RECEIVED FROM SALES TAX AUTHORITIES AS GIVEN BY DGIT(INV.), MUMBAI, THE SUPPLIERS WERE STATED TO HAVE GIVEN ONLY BOGUS BILLS WITHOUT SUPPLYING ANY MATERIAL AND THESE PURCHASES WERE MERELY ACCOMMODATION ENTRIES T O SUPPRESS/REDUCE PROFITS TO EVADE TAXES. THE ASSESSEE DID NOT FILE A NY EVIDENCE TO PROVE THAT THESE WERE GENUINE TRANSACTIONS UNDERTAKEN BY THE A SSESSEE. WE HAVE OBSERVED THAT THE A.O. ISSUED NOTICES U/S 133(6) OF THE ACT TWICE TO VERIFY THE TRANSACTIONS OF THE ASSESSEE BUT THESE NOTICES RETU RNED UN-SERVED AND RETURNED BACK BY THE POSTAL AUTHORITIES AND THE ASS ESSEE ALSO COULD NOT PRODUCE THESE PARTIES BEFORE THE AUTHORITIES BELOW. THE A.O. HAD GIVEN SUFFICIENT OPPORTUNITY TO PRODUCE THE PARTIES DURIN G ASSESSMENT PROCEEDINGS BUT THE ASSESSEE FAILED TO DISCHARGE HIS ONUS. THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVIDE COGENT EVIDENCES/EXPLANATIONS T HAT THESE WERE GENUINE TRANSACTIONS FOR THE PURCHASE OF SPARE PARTS WHICH ARE USED FOR THE BUSINESS OF THE ASSESSEE. THE REVENUE HAS DOUBTED THE GENUIN ENESS / BONAFIDE OF THE PURCHASE TRANSACTIONS WHICH ARE ALLEGED TO BE ACCOM MODATION ENTRIES/ BOGUS PURCHASES. THE ONUS IS ON THE ASSESSEE TO JUSTIFY T HE CONSUMPTION OF THE SPARE PARTS FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE ASSESSEE DID NOT FILE ANY EVIDENCE TO PROVE THAT THESE WERE GENU INE PURCHASE TRANSACTIONS UNDERTAKEN BY THE ASSESSEE. THE ASSESSEE WAS NOT A BLE TO QUANTITATIVELY RECONCILE AND EXPLAIN THE CONSUMPTION OF SPARE PART S FOR HIS BUSINESS ACTIVITIES AND PROVE THAT THESE WERE GENUINE PURCHA SES WHICH WERE USED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. NO A TTEMPT HAS BEEN MADE EVEN BEFORE US BY THE LEARNED COUNSEL FOR THE ASSESSEE T O PROVE THAT THESE WERE GENUINE PURCHASES MADE FOR BUSINESS OF THE ASSESSEE AND THE SPARE PARTS ITA 1845/MUM/2016 10 WERE GENUINELY AND BONAFIDELY CONSUMED IN THE BUSIN ESS OF THE ASSESSEE AND ALLEGATION OF THE REVENUE WAS NOT CORRECT.THE ASSES SEE CONTENDED THAT IN ORDER TO BUY PEACE AND AVOID PROTRACTED LITIGATION ON THE ADVICE OF HIS CA , THE ASSESSEE HAS SURRENDERED THE AMOUNT FOR TAXATION DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAD NOT PREFERRED APPEAL AGAINST THE QUANTUM ASSESSMENT. THE QUANTUM ASSESSMENT HAD ATTAINED FI NALITY ON MERITS. DURING PENALTY PROCEEDINGS ALSO , THE ASSESSEE DID NOT CAME FORWARD TO BRING ON RECORD, COGENT MATERIAL/EXPLANATION TO JUSTIFY THE CONSUMPTION OF SPARES PURCHASED FROM THESE THREE PARTIES TO DISPROVE THE CONTENTIONS/ALLEGATION OF REVENUE THAT THESE WERE MERELY BOGUS PURCHASES BEIN G ACCOMMODATION ENTRIES TO INFLATE EXPENSES AND TO SUPPRESS PROFITS . IN OUR CONSIDERED VIEW, THE REVENUE HAS RIGHTLY IMPOSED PENALTY U/S 271(1)( C) OF THE ACT WHICH WE HEREBY CONFIRM AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH WE AFFIRM AND UPHOLD. THE LD. CIT(A) HAS RIGH TLY DISTINGUISHED JUDICIAL PRONOUNCEMENTS CITED BY THE ASSESSEE AS DETAILED IN HIS APPELLATE ORDERS DATED 11.01.2016.WE ORDER ACCORDINGLY. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 1845/MUM/2016 FOR THE ASSESSMENT YEAR 2010-11 IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH DECEMBER, 2016. # $% &' 08-12-2016 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 08-12-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ITA 1845/MUM/2016 11 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI