ASST CIT 32(3), MUMBAI V. VINAY UNIQUE CONSTRUCTION, MUMBAI

ITA 1957/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0327 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: SUBODH RATNAPARKHI LD
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

ITA NO 1957/MUM/2016 VINAY UNIQUE CONSTRUCTION ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1957/MUM/2016 ( / ASSESSMENT YEAR: 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX 32(3) ROOM NO.108,1 ST FLOOR, BUILDING NO.C-11, PRATYAKSHKAR BHAVAN, BKC,BANDRA(E) MUMBAI 400 013 / VS. VINAY UNIQUE CONSTRUCTION A-8 OM MAHESHWAR NIKETAN HARSHA PARK, CHANDAVARKAR ROAD, BORIVALI(E) MUMBAI -400 066 ! ./ ./PAN/GIR NO. AAFFV-6659-M ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : SUBODH RATNAPARKHI, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 10/08/2017 / DATE OF PRONOUNCEMENT : 16 /08/2017 ITA NO 1957/MUM/2016 VINAY UNIQUE CONSTRUCTION ASSESSMENT YEAR 2011-12 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011- 12 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-44 [CIT(A)], MUMBAI DATED 19/01/2016 QUA RELIEF PROVIDED TO THE ASSESSEE AGAINST CERTAIN BOGUS PURCHASES. THE REGISTRY HAS NOTED A DELAY OF 352 DAYS IN FILING THE APPEAL. HOWEVER, IT IS NOTED THA T THE IMPUGNED ORDER IS DATED 19/01/2016 AND THE APPEAL IS WITHIN TIME AND REGISTRY NOTING HAS OCCURRED ONLY DUE TO WRONG MENTIONING OF DATE IN FO RM 36. HENCE, WE PROCEED TO DISPOSE-OFF THE APPEAL ON MERITS. 2.1 BRIEFLY STATED, THE ASSESSEE BEING RESIDENT FIRM ENGAGED AS BUILDER & DEVELOPER WAS ASSESSED U/S 143(3) FOR THE IMPUGNED AY ON 25/03/2014 AT RS.2,26,86,010/- AFTER CERTAIN ADDITI ONS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.1,27,39,434/- E-FILED BY THE ASSESSEE ON 30/09/2011. THE ASSESSEE SUFFERED DISALLOWANCE OF R S.50,28,053/- ON ACCOUNT OF CERTAIN BOGUS PURCHASES AND THE SAME IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.2 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE MADE PURCHASES OF RS.50,28,053/- FROM EIGHT PARTIES WHO WERE LISTED AS SUSPICIOUS DEALERS INDULGING IN ACCOMMODATION BILLS AS PER OFFICIAL WEBSITE OF SALES TAX DEPARTMENT, MAHARASHTRA . THE NOTICES ISSUED U/S 133(6) WERE RETURNED UN-SERVED WITH REMARKS LEFT / UNKNOWN ETC . THE SAME WAS CONFRONTED TO THE ASSESSEE WHO FILED COPIE S OF LEDGER EXTRACTS, PURCHASE INVOICES AND BANK STATEMENTS AND CONTENDED THAT THE ITA NO 1957/MUM/2016 VINAY UNIQUE CONSTRUCTION ASSESSMENT YEAR 2011-12 3 PURCHASES WERE GENUINE AND ADDITIONS COULD NOT BE M ADE MERELY BY RELYING UPON THE WEBSITE INFORMATION. HOWEVER, NOT CONVINCED, LD. AO TREATED THE SAME AS BOGUS PURCHASES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 19/01/2 016 AND CONTENDED THAT THE MATERIAL WAS CONSUMED IN THE CONSTRUCTION WORK CARRIED OUT BY THE ASSESSEE, THE ASSESSEE WAS IN POSSESSION OF PUR CHASE DOCUMENTS AND PAYMENTS WERE THOUGH BANKING CHANNELS AND THERE FORE ADDITION COULD NOT BE MADE AS PER SEVERAL JUDICIAL PRONOUNCE MENTS. THE LD. CIT(A) NOTED THAT THE ASSESSEE WAS IN POSSESSION OF PURCHASE DOCUMENTS AND THE PAYMENTS WERE THROUGH BANKING CHA NNELS BUT THE SAME, IN ITSELF, WAS NOT CONCLUSIVE TO PROVE THE GE NUINENESS OF THE PURCHASES. AT THE SAME TIME, IT WAS NOTED THAT THE TURNOVER WAS NOT DISPUTED BY THE LD. AO AND CONSTRUCTION WORK COULD NOT BE CARRIED OUT BY THE ASSESSEE WITHOUT CONSUMPTION OF MATERIAL. FI NALLY, THE IMPUGNED ADDITION WAS RESTRICTED TO 20% OF BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] SUPPORT ED THE STAND TAKEN BY LD. AO AND CONTENDED THAT MERE PAYMENT THR OUGH BANKING CHANNELS WAS NOT SUFFICIENT TO ESTABLISH THE GENUIN ENESS OF THE PURCHASES. MOREOVER, NONE OF THE SUPPLIER WAS FOUND AT THE GIVEN ADDRESS AND THE ONUS TO SUBSTANTIATE THE PURCHASES SQUARELY LIE ON THE ASSESSEE, WHICH HE HAS FAILED TO DISCHARGE AND THER EFORE, FULL ITA NO 1957/MUM/2016 VINAY UNIQUE CONSTRUCTION ASSESSMENT YEAR 2011-12 4 DISALLOWANCE THEREOF WAS JUSTIFIED. PER CONTRA, LD. COUNSEL FOR ASSESSEE [AR] PLACED RELIANCE ON THE FINDINGS OF LD. CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE IS EN GAGED AS BUILDER & DEVELOPER WHICH COULD NOT BE CARRIED OUT WITHOUT CONSUMPTION OF MATERIAL. THE SALE / TURNOVER OF THE ASSESSEE HAVE BEEN ACCEPTED BY THE REVENUE AND THERE IS NO ALLEGATION IN SUPPRESSION THEREOF. LOGICALLY, THERE COULD BE NO SALE WITHOUT PURCHASES. THEREFORE , IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT F OR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZ E FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBILITY OF PURCHASE OF MATE RIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTLY DONE. THEREFORE, WE FIND THE ORDER OF LD. CIT(A) TO BE QUITE FAIR AND REASONABLE AND HENCE, FIND NO REA SON TO INTERFERE WITH THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16. 08.2017 SR.PS:- THIRUMALESH ITA NO 1957/MUM/2016 VINAY UNIQUE CONSTRUCTION ASSESSMENT YEAR 2011-12 5 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI