ACIT 20(1), MUMBAI V. BHUSHAN K VORA, MUMBAI

ITA 2081/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9105 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMARDR
• Assessee Lawyers: DINESH RASIKLAL SHAHAR
• Keywords: Bogus purchase; Difference of opinion; Tax effect; Change of opinion
• Section: 147

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -BBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./I.T.A./2081/MUM/2015, /ASSESSMENT YEAR: 2009-10 ACIT-20(1) 4TH FLOOR,R.NO.406, PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI. VS. SHRI BHUSHAN K. VORA FLAT NO.2, LAMBA BUILDING 215, SIR, BALCHANDRA ROAD MATUNGA, MUMBAI-400 019. PAN:AAAPV 8776 E ( /APPELLANT ) ( / RESPONDENT) /CROSS OBJECTION/187/MUM/2016 AY.2009-10 ACIT-20(1) 4TH FLOOR,R.NO.406, PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI. VS. SHRI BHUSHAN K. VORA FLAT NO.2, LAMBA BUILDING 215, SIR, BALCHANDRA ROAD MATUNGA, MUMBAI-400 019. PAN:AAAPV 8776 E / REVENUE BY: SHRI SUMAN KUMAR-DR /ASSESSEE BY: SHRI DINESH RASIKLAL SHAH-AR / DATE OF HEARING: 06/01/2017 / DATE OF PRONOUNCEMENT: 06/01/2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDERS DATED 16.01.2015 OF THE CIT( A)-32,MUMBAI,THE ASSESSING OFFICER (AO)HAS FILED THE PRESENT APPEAL.ASSESSEE,AN INDIVI DUAL,ENGAGED IN THE BUSINESS OF EXPORTS AND IMPORTS OF SURGICAL INSTRUMENTS, FILED HIS RETU RN OF INCOME ON 27.09.2009 DECLARING A TOTAL INCOME OF RS.1,08,66,731/-.THE AO COMPLETED THE ASS ESSMENT ON 31.12.2013,U/S.143(3) R.W. S.147 OF THE ACT,DETERMINING THE TOTAL INCOME OF TH E ASSESSEE AT RS. 1.46 CRORES. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR)DID NOT PRESS THE CO.HENCE,SAME STANDS DISMISSED,AS NOT PRESSED. I.T.A./2081/MUM/2015: 2. EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING THE AD DITION MADE BY THE AO ON ACCOUNT OF BOGUS PURCHASES.IN THIS MATTER ORIGINAL SCRUTINY AS SESSMENT WAS COMPLETED ON 5.12.2011, DETERMINING THE INCOME OF THE ASSESSEE AT RS.1.16 C RORES.SUBSEQUENTLY, THE CASE WAS REOPENED U/S. 147 OF THE ACT ON THE BASIS OF INFORM ATION RECEIVED FOR DGIT(INV.)MUMBAI ALLEGING THAT THE ASSESSEE HAD MADE PURCHASES OF RS . 29.98 LAKHS AND SAME WERE FICTITIOUS IN 2081/M/15-BHUSHAN K. VORA 2 NATURE.THE ASSESSEE OBJECTED TO REOPENING OF THE AS SESSMENT AND FILED HIS OBJECTION BEFORE THE AO. IT WAS STATED THAT THE AO HAD FAILED TO PROVIDE COPIES OF STATEMENT OF THE PARTIES WHOSE STATEMENTS WERE RECORDED BY THE SALES TAX DEPARTMEN T,THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY TO CROSS EXAMINE THOSE PARTIES,THAT IT WAS A CASE OF CHANGE OF OPINION, THAT HE HAD FURNISHED THE COPIES OF PURCHASE BILLS AND THE BANK STATEMENT,THAT THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS, THAT QUANTITY WISE D ETAILS OF PURCHASE AND SALES MADE FROM THE ALLEGED HAWALA DEALERS WERE SUBMITTED TO THE AO , THAT MOST OF THE SALES HAD BEEN MADE TO GOVT. HOSPITALS, THA THE AO HAD ACCEPTED THE SALES MADE BY THE ASSESSEE,THAT AFTER ACCEPTING THE SALES THE AO WAS NOT JUSTIFIED IN REJECTING THE PURCHASES,THAT THERE WAS NO INDEPENDENT EVIDENCE TO PROVE NON-GENUINENESS OF THE PURCHASES. HE RELIED UPON THE CASES OF NIKUNJ EXIMP ENTERPRISES (216 TAXMAN 161); BALAJI TEXTILES INDUSTRIES LTD.(49ITD177);NANGLIA FABRICS PVT. LTD.(220 TAXMAN 17). AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE ORDER OF THE AO, THE FAA HELD THAT THERE COULD NOT BE ANY SALE WITHOUT PURCHASES,THAT THE ADDITION WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT,THAT THE PARTIES HAD NOT DIRECTLY NAMED THE ASSESSEE, THAT THE ALLEGED SUPPLIERS HAD MADE A GEN ERAL STATEMENT OF ISSUING BOGUS BILLS BEFORE THE SALES TAX AUTHORITY,THAT THE AO HAD NOT MADE AN Y ATTEMPT ABOUT THE TRANSACTION ,THAT HE DID NOT CONFRONT THE ASSESSEE WITH ANY ADVERSE FINDING, THAT UNDER THE ACT ONLY REAL INCOME COULD BE TAXED, THAT IN CASE OF NON VERIFIABLE TRANSACTIO NS ONLY INCOME COMPONENT COULD BE ADDED AND NOT THE ENTIRE TRANSACTION AMOUNT.FINALLY,HE CO NFIRMED THE ADDITION TO THE EXTENT OF RS.12.5%. DURING THE COURSE OF HEARING BEFORE US THE DEPARTME NTAL REPRESENTATIVE(DR) SUPPORTED THE ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE(AR)R ELIED UPON THE CASES OF SHRI MADHUKANT B. GANDHI(ITA/1950/MUM/2009 DATED 23.2.2010 FOR AY 2005-06); M/S. PRASHANT ENTERPRISES (ITA/5467/MUM/2013 DATED 24.2.2016 FOR AY 2010-11); M/S. JITENDRA HARSHADKUMAR TEXTILES P. LTD. (ITA/771/MUM/2011 & ITA NO.2211/MU M/2011 DT.21.11.2012 FOR AY 2007 -08)AND SHREE RAJEEV G. KALATHIL (ITA/6727/MUM/2012 & C.O. NO.06/MUM/2014 DATED 20. 08.2014 FOR AY 2009-10). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD MADE ADDITION OF RS.29.98 LAKHS, THAT THE FA A HAD DELETED THE ADDITION OF RS.26.23 LAKHS, THAT HE HAD CONFIRMED THE ADDITION OF RS.3. 74 LAKHS. THUS, THE APPEAL FILED BY AO,WAS FOR THE RELIEF GRANTED,BY THE FAA,OF RS.26,23,950/- .THE TAX EFFECT FOR THE DISPUTED AMOUNT 2081/M/15-BHUSHAN K. VORA 3 WILL BE LESS THAN RS.10.00 LAKHS, SO,THE APPEAL IS NOT MAINTAINABLE AS PER THE CENTRAL BOARD OF DIRECT TAXES (CBDT), CIRCULAR NO.21/2015(F.NO.279/M ISC. 142/2007-ITJ (PT.) DATED 10 TH DECEMBER, 2015. EVEN ON MERITS WE FIND THAT THE ORDER OF THE FAA DO ES NOT SUFFER FROM ANY LEGAL INFIRMITY. THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF TOTAL DISPUTED AMOUNT AFTER ACCEPTING THE GENUINENESS OF THE SALES.WE FIND THAT THE FAA HAD G IVEN PART RELIEF TO THE ASSESSEE. CONFIRMING HIS ORDER,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE ASSESSING OFFICER AND THE CO OF THE ASSESSEE STAND DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2017. , 201 SD/- SD/- ( / AMARJIT SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.