ITO 33 (2)(3), MUMBAI V. SHRI. MUKESH HIMMATLAL MISTRY , MUMBAI

ITA 190/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7723 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 147

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER . 190 / / 20 20 (. . 2011-12 ) ITA NO.190/MUM/2020 (A.Y.2011-12) ITO-33(2)(3), ROOM NO. 848, 8 TH FLOOR, KAUTILYA BHAVAN, G-BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. ...... / APPELLANT VS. SHRI MUKESH HIMMATLAL MISTRY, B/21, KRISHNA KRUPA, SHANKAR LANE, KANDIVALI (WEST), MUMBAI-400067. PAN: AAOPM3429P ..... / RESPONDENT / APPELLANT BY : SH. SANJAY J. SETHI / RESPONDENT BY : NONE / DATE OF HEARING : 14/06/2021 / DATE OF PRONOUNCEMENT : 24/08/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-45 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 24.10.2019 FOR ASSESSMENT YEAR (AY) 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSMENT FOR A.Y. 2011-12 IN THE CASE OF ASSESSEE WAS RE- 2 . 190 / /20 20 (. .2011-12 ) ITA NO.190/MUM/2020 (A.Y.2011-12) OPENED ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA AND DGIT (INVESTIGATION), MUMBAI. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAS PROCURED BOGUS PURCHASE BILLS TO THE TUNE OF RS. 14,77,896/- FROM THE FOLLOWING PARTIES: (1) V.M. UDYOG RS. 7,57,756/- (2) VARDHMAN TRADERS RS. 7,20,140/- TOTAL RS. 14,77,896/- THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCE TO THE SATISFACTION OF ASSESSING OFFICER (AO) TO PROVE GENUINENESS OF THE DEALERS AND THE PURCHASES MADE FROM THEM. HENCE, THE AO MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGAINST THE ASSESSMENT ORDER DATED 22.12.2016 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS RESTRICTED THE ADDITION TO RS. 1,84,737/- BY ESTIMATING SUPPRESSED PROFIT @ 12.5% ON BOGUS PURCHASES. 3. NOW, THE REVENUE IS IN APPEAL ASSAILING THE RELIEF GRANTED BY THE CIT(A) IN RESPECT OF BOGUS PURCHASES. 4. SH. SANJAY J. SETHI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDINGS OF CIT(A) ON THE ISSUE OF BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NEITHER PRODUCE THE SUSPICIOUS DEALERS NOR ANY CONFIRMATIONS WERE FILED FROM THEM. THE AO HAD ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE DEALERS, THE SAME WERE RETUNED BACK BY POSTAL AUTHORITIES UNSERVED. NO DOCUMENTARY EVIDENCE IN THE 3 . 190 / /20 20 (. .2011-12 ) ITA NO.190/MUM/2020 (A.Y.2011-12) FORM OF DELIVERY CHALLENS, TRANSPORT RECEIPTS, OCTROI RECEIPTS, INWARD REGISTER, ETC. WERE FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. THE AO WAS, THEREFORE JUSTIFIED IN DISALLOWING ENTIRE BOGUS PURCHASES. THE LD. DR IN SUPPORT OF HIS CONTENTIONS PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT [84 TAXMANN.COM 195]. 5. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING AUTHENTICITY OF THE DEALERS AND THE PURCHASES MADE FROM SAID DEALERS. AT THE SAME TIME, IT IS OBSERVED THAT THE SALES TURNOVER DECLARED BY THE ASSESSEE WAS ACCEPTED BY THE AO. WITHOUT PURCHASES, THE ASSESSEE COULD NOT HAVE EXECUTED THE WORK ALLOTTED TO HIM. THE CIT(A) HAS UPHELD THE FINDINGS OF AO TO THE EXTENT OF ASSESSEES INVOLVEMENT IN OBTAINING BOGUS PURCHASE BILLS. THE CIT(A) HAS RESTRICTED THE DISALLOWANCE ON BOGUS PURCHASE BY ESTIMATING SUPPRESSED PROFIT MARGIN IN UNPROVED TRANSACTIONS @ 12.5%. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO. 413 OF 2017 DECIDED ON 15.07.2019 HAS HELD THAT WHERE SALES TURNOVER HAS BEEN ACCEPTED, ENTIRE ALLEGED BOGUS PURCHASE CANNOT BE DISALLOWED, IT IS THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN ONLY BE BROUGHT TO TAX. 6. WE CONCUR WITH THE FINDINGS OF CIT(A), HENCE, THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED, BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , THE 24 TH DAY OF AUGUST, 2021. SD/- SD/- (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, / DATED: 24/08/2021 4 . 190 / /20 20 (. .2011-12 ) ITA NO.190/MUM/2020 (A.Y.2011-12) SK, PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT , 2. / THE RESPONDENT. 3. ( )/ THE CIT(A)- 4. CIT 5. , . . . , / DR, ITAT, MUMBAI 6. [ / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI