LACHHMAN M RIJHWANI PROP M/S, ASHOKA BUILDERS, MUMBAI V. JCIT RG 23(2), MUMBAI

ITA 2015/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9451 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 2015 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 11 - 12 ) LACHHMAN M. RIJHWANI PROP.M/S ASHOKA BUILDERS, 210 - 212, VEERA BEENA TURNER ROAD, BANDRA (W), MUMBAI - 400050 / VS. THE JT. COMMISSIONER OF INCOME TAX - RANGE 23(2), 1 ST FLOOR, MATRU MANDIR, TARDEO, MUMBAI - 400007 ( / APPELLANT ) .. ( / RESPONDENT ) ./PAN NO. : AAIPR5777R / APPELLANT BY: SHRI HARI S RAHEJA / RESPONDENT BY SHRI SAURABH DESHPANDE / DATE OF HEARING : 2 9 .8. 201 7 / DATE OF PRONOUNCEMENT : 18. 9. 201 7 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 33 , MUMBAI D A T ED 18. 2.2015 PERTAINING TO A.Y. 20 11 - 12 . 2. ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF ADDITION AT THE RATE OF 10 % OF THE ALLEGED BOGUS PURCHASE AS HAS BEEN MADE BY THE AO AN CONFIRMED BY THE LD. CIT(A). 3 . FACTS OF THE CASE ARE THE ASSESSEE FILED RETURN OF INCOME ON 30.9.2011 DECLARING TOTAL INCOME OF RS.5,75,48,350/ - WHICH WAS REVISED ON 18.3.2013 DECLARING TOTAL INCOME OF RS.5,74,58,350/ - . THE CASE OF THE ASSESSEE WAS ITA NO . 2015 / M/1 5 2 SELECTED FOR SCRUTINY UNDER CASS AND STATUTORY NOTICES UNDER SECTION 143(2) AND 142 (1) WERE ISSUED AND SERVED UPON THE ASSESSEE. IN THE MEAN TIME, THE AO RECEIV ED THE INFORMATION FROM THE DGIT(INV), SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE WAS ONE OF THE BENEFICIAR IES OF THE HAWALA TRANSACTIONS AND AS A RESULT RECEIVED ENTRIES OF BOGUS PURCHASES. DURING THE COURSE OF INQUIRY THE AO FOUND THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRIES FROM FOLLOWING PARTIES: S.NO. NAME OF THE PARTY FY AMOUNT 1 SHRI OMKAR ENTERPRISES 2010 - 11 20,540 2 TOP BRICKS AND SAND S UPPLIERS 2010 - 11 9,18,524 3 ASIAN TUBE TRADING 2010 - 11 2,912 4 AJAY STONE 2010 - 11 1,75,837 5 RAMDEV TRADING 2010 - 11 17,72,008 6 SHULABH TRADING CO. 2010 - 11 8,51,967 7 GHATALIA STEELS/ DIVINE ENTERPRISES 2010 - 11 10,13,837 8 KARNI GRANIMARMO PRIVATE LTD 2010 - 11 2,14,638 9 ASHAR IMPEX. 2010 - 11 2,84,771 TOTAL 52,54,935 ACCORDINGLY, VIDE ORDER SHEET ENTRY DATED 16.1.2014 , THE ASSESSEE WAS ASKED TO PROVE GENUINENESS OF PURCHASES AND AS TO WHY THE SAME SHOULD NOT BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE AO, THE ASSESSEE COULD NOT PRODUCE THE PROOF S AND PROVE THE GENUINENESS OF THE PURCHASES THOUGH AFFORDED SEVERAL OPPORTUNITIES ON NUMBER OF TIMES . M OREOVER, NOTICES U/S 133(6) SENT TO THE PARTIES WERE RETURNED UNSERVED I N SOME OF THE CASES. HOWEVER, FINALLY, WHEN THE ASSESSEE COULD NOT PRODUCE THE NECESSARY EVIDENCES IN THE FORM OF DELIVERY CHALLAN S, PAYMENT DETAILS , CONFIRMATIONS AND STOCK TALLY REGISTER, THE AO TREATED THE PURCHASES AS NON GENUINE AND DISALLOWED TO T HE TUNE OF 13,13,733/ - BEING 25% OF AMOUNT OF ITA NO . 2015 / M/1 5 3 ALLEGED BOGUS PURCHASES OF RS.52,54,935/ - BY FRAMING THE ASSESSMENT U/S 143(3) VIDE ORDER DATED 14.2.2014 BY ASSESSING THE TOTAL INCOME AT RS. 5,87,72,080/ - THE MATTER CARRIED TO THE FIRST APPELLATE AUTHORITY, WHO AFTER CONSIDERING THE VARIOUS ASPECTS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITION TO THE EXTENT OF 10 % OF SUCH BOGUS PURCHASES. AGGRIEVED BY THE ORDER OF FAA, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE CAREFULLY CONSIDE RED THE CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE WAS FOUND TO HAVE AVAILED ACCOMMODATION ENTRIES OF BOGUS PURCHASE FROM 9 PARTIES OF WHICH THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE PURCHASES AS NO STOCK TALLY OR DELIVERY CHALLANS ETC WERE PRODUCED BEFORE THE AO. THE NOTICES ISSUED UNDER SECTION 133(6) WERE NOT SERVED ON THESE PARTIES AND RETURNED UNSERVED. IT IS COMMON PRACTICE THA T THE ASSESSEE TAKES THE ENTRIES FROM HAWALA DEALERS WITHOUT TAKING PHYSICAL MATERIAL AND THEN BUYING THE GOOFDS FROM THE GREY MARKETS THEREBY MAKING SAV INGS OF TAXES AND OTHER INCIDENTAL CHARGES . IN THE SUCH TYPE OF CASES THE COORDINATE BENCHES HAVE B EEN TAKING A CONSISTENT VIEW THAT SOME PERCENTAGE ADDITION RANGING FROM 4 TO 12.50% SHOULD BE MADE TO COVER THE LEAKAGES OF REVENUE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE LD. CIT(A) SUSTAINING THE ADDITIONS TO THE EXTENT OF 10% OF SUCH PURCHASES ARE REASONABLE AND FAIR AND NO NEED TO INTERFERE ON OUR PART. ITA NO . 2015 / M/1 5 4 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18TH SEPT , 2017 . 18TH SEPT. 2017 S D SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 9. 2017 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERN ED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, T RUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI