SHRI AJAY GUPTA, MUMBAI V. ACIT CENT. CIR. 43, MUMBAI

ITA 2146/MUM/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1952 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: R C JAIN
• Keywords: Bogus purchase; Unexplained expenditure; Search and seizure; Accommodation entries
• Section: 69C; 133(6); 13; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO . 2146 & 2150 / MUM . / 2016 ( ASSESSMENT YEAR : 2012 13 & 2007 08 ) SHRI AJAY GUPTA 301 A, MITHILA APARTMENT J.B. NAGAR, ANDHERI (EAST) MUMBAI 400 059 PAN AACPG8928R . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 43, MUMBAI . RESPONDENT ITA NO .1824 , 1825 & 1826 /MUM./ 2016 ( ASSESSMENT YEAR : 2006 07 , 2007 08 & 2009 10 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 7(4), MUMBAI . APPELLANT V/S SHRI AJAY GUPTA 301 A, MITHILA APARTMENT J.B. NAGAR, ANDHERI (EAST) MUMBAI 400 059 PAN AACPG8928R . RESPONDENT ASSESSEE BY : SHRI R.C. JAIN REVENUE BY : SMT. JACINTA ZIMIK VASHAI DATE OF HEARING 13 . 11 .2019 DATE OF ORDER 26.11.2019 2 SHRI AJAY GUPTA O R D E R THIS IS A BUNCH OF FIVE APPEALS CONCERNING THE SAME ASSESSEE. OUT OF THESE , THREE ARE BY REVENUE AND TWO BY THE ASSESSEE. THE APPEALS PERTAIN TO THE ASSESSMENT YEAR S 2006 07. 2007 08, 2009 10 AND 2012 13. ITA NO.1824/MUM./2016 REVENUES APPEAL A.Y. 2006 07 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN RESTRICTING THE ADDITION OF COMMISSION TO ` 1,21,841, BY TAKING COMMISSION @ 0.25% AS AGAINST ` 14,62,097, MADE BY THE A.O. TAKING THE COMMISSION @ 3% WITHOUT APPRECI ATING THE FACT THAT THE OTHER PARTIES WHO HAD GIVEN ACCOMMODATION ENTRIES IN THE FORM OF BOGUS PURCHASES AND SALE TO M/S. LIL, HAVE ACCEPTED IN STATEMENT U/S 131 THAT THEY HAD RECEIVED 3% COMMISSION ON SUCH TRANSACTIONS MADE WITH LOHA ISPAAT GROUP . 3. BRIEF FACTS ARE, IN THE COURSE OF A SEARCH AND SEIZURE OPERATION CARRIED OUT UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) IN CASE OF THE ASSESSEE AS WELL AS LOHA ISPAAT LTD. (LIL), IT WAS FOUND THAT THE ASSESSEE HAS UNDERTAKEN CERTAIN SALE AND PURCHASE TRANSACTIONS WITH LIL WHICH ARE ONLY IN THE NATURE OF PAPER TRANSACTIONS. IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT DURING THE SEARCH AND SEIZURE OPERATIONS, THE ASSESSEE ALSO 3 SHRI AJAY GUPTA ADMITTED THIS FACT. IT WAS SUBMITTED BY THE AS SESSEE THAT THE SALE AND PURCHASE TRANSACTIONS WITH LIL ARE NOT GENUINE TRANSACTIONS AND THE ASSESSEE HAD JUST LENT HIS NAME BY RECEIVING COMMISSION OF 0.25% OF THE BILL VALUE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, ON THE BASIS OF INCRI MINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE OPERATION AS WELL AS THE STATEMENT RECORDED UNDER SECTION 133(4) OF THE ACT FROM THE ASSESSEE , HELD THAT SALE AND PURCHASE TRANSACTION WITH LIL AND OTHER GROUP ENTITIES ARE BOGUS AND ACCORDINGLY PROCEED ED TO COMPUTE COMMISSION INCOME @ 3% OF THE BILL AMOUNT WHICH RESULTED IN ADDITION OF ` 14,62,097. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4. L EARNED COMMISSIONER (APPEALS) , AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE AND RELYING UPON THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT WHEREIN THE ASSESSEE ADMITTED OF HAVING RECEIVED COMMISSION OF 0.25% OF THE BILL VALUE , DIRECTED THE ASSESSING OFFICER TO WORK OUT THE ADDITION @ 0.25% OF THE VALUE OF ALL T HE TRANSACTIONS WITH LIL. ACCORDINGLY, HE RESTRICTED THE ADDITION TO ` 1,21,841. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 4 SHRI AJAY GUPTA 6. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ISSUE IS COVERED BY THE D ECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2008 09 TO 2011 12 IN ITA NO.3261/MUM./2016 & ORS., DATED 23 RD JUNE 2017, WHEREIN THE TRIBUNAL HAS UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION O N ACCOUNT OF COMMISSION INCOME TO 0.25% OF THE TRANSACTION VALUE WITH LIL. 7. WE HAVE CONSIDERED RIVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD. THE DISPUTE IS ONLY WITH REGARD TO THE RATE AT WHICH THE COMMISSION INCOME IN RELATION TO SALE AND PURCHASE TRANSACTION WITH LIL IS TO BE ASSESSED. WHILE THE ASSESSEE HAS CLAIMED THE COMMISSION INCOME @ 0.25% OF THE TRA NSACTION VALUE, THE ASSESSING OFFICER HAS ENHANCED IT TO 3%. NOTABLY, WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 09 TO 2011 12, THE TRIBUNAL , IN THE ORDER REFERRED TO ABOVE , HAS UPHELD THE DECISION OF LEARNED COMMISS IONER (APPEALS) IN RESTRICTING THE ADDITION O N ACCOUNT OF COMMISSION INCOME TO 0.25% OF THE TRANSACTION VALUE WITH LIL. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH, WE UPHOLD THE ORDER OF LEARNED COMMISSION ER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 5 SHRI AJAY GUPTA ITA NO. 1825 /MUM./2016 REVENUES APPEAL A.Y. 200 7 08 9. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE 14. CIT(A) ERRED IN RESTRICTING THE ADDITION OF COMMISSION TO RS. 1,65,672/ - BY TAKING COMMISSION @ 0.25% AS AGAINST RS.19,88,0631 - MADE BY THE AO TAKING THE COMMISSION CA) 3% WITHOUT APPREC IATING THE FACT THAT THE OTHER PARTIES WHO HAD GIVEN ACCOMMODATION ENTRIES IN THE FORM OF BOGUS PURCHASES AND SALE TO M/S LIL HAVE ACCEPTED IN STATEMENT U/S131 THAT THEY HAD RECEIVED 3% COMMISSION ON SUCH TRANSACTIONS MADE WITH LOHA ISPAAT GROUP.' '2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THE AO TO RESTRICT THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO RS. 11,79,531/ - BEING 12.5% OF THE BOGUS PURCHASES AS AGAINST ADDITION OF PEAK OF INVESTMENT OF THE PURCHASES AMOUNTING TO RS.85,13,2491 - MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FAILED TO PRODUCE DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES AND DOCUMENTS EVIDENCING DELIVERY AND RECEIPT OF GOODS AND DETAILS O F THE PARTIES TO WHOM SUCH MATERIAL WAS SOLD DIRECTLY.' 10. GROUND NO.1, IS IDENTICAL TO THE GROUND RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.1824/MUM./2016. FOLLOWING OUR DECISION THEREI N, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND IS DISMISSED. 11. APROPOS GROUND NO.2, THE FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT AS PER THE SALES T AX DEPARTMENT, STATE OF MAHARASHTRA , PURCHASE S WORTH ` 94,36,249 , CLAIMED TO HAVE BEEN MADE FROM APEX STEEL IS NON GENUINE , AS , THE CONCERNED SELLING DEALER IS A HAWALA OPERATOR AND PROVIDES 6 SHRI AJAY GUPTA ACCOMMODATION ENTRIES BY WAY OF PURCHASE BILLS. NOTICING THIS FACT, THE ASSESSING OFFICER APART FROM CALLING UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES, ALSO CONDUCTED INDEPENDENT ENQUIRY BY ISSUING NOTICE UNDER SECTION 133(6) OF THE ACT. AS ALLEGED BY THE ASSESSING OFFICER, THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT RETURNED BACK UN SERVED AS THE SELLING DEALER WAS NOT FOUND IN THE GIVEN ADDRESS. THUS, ULTIMATELY, THE ASSESSING OFFICER TREATED THE PURCHASE AS NON GENUINE AND ADDED BACK THE BALANCE OF ` 85,13,249 BY TREATING IT AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. THE ASSESSEE CHALLENGED THE AF ORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 12. L EARNED COMMISSIONER (APPEALS), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, RESTRICTED THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. 13. WE HAVE CONSIDERED RIVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD. IN THE COURSE OF HEARING, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED BEFORE US THAT WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2008 09 TO 2010 11, THE TRIBUNAL , IN ORDER DATED 23 RD JUNE 2017, HAS UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO 12.5% OF 7 SHRI AJAY GUPTA THE NON GENUINE PURCHASES. I T IS OBSERVED , IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2008 09, 20 09 10 AND 2010 11 I N APPEALS PREFERRED BY THE ASSESSEE CONTESTING THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN SUSTAINING THE ADDITION OF 12.5% O N THE NON GENUINE PURCHASES. WHILE DECIDING THE ISSUE IN THE ORDER REFERRED TO ABOVE, THE TRIBUNAL HAS UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS). IN VIEW OF THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, WE DO NOT FIND A NY REASON TO INTERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 14. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO. 2150 /MUM./2016 ASSESSEE S APPEAL A.Y. 200 7 08 15. IN GROUND NO.1, THE ASSESSEE HAS CH ALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION ON ACCOUNT OF COMMISSION INCOME TO 0.25% OF THE TOTAL TRANSACTION. 16. IN VIEW OF OUR DECISION IN GROUND NO.1, RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.182 5 /MUM./2016, THIS GROUND HAS BECOME INFRUCTUOUS, HENCE, DISMISSED. 8 SHRI AJAY GUPTA 17. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION ON ACCOUNT OF NON GENUINE PURCHASES TO 12.5% OF SUCH PURCHASES. 18. WHILE DECIDING IDENTICAL ISSUE RAISED IN GROUND NO.2, BY THE REVENUE IN ITS APPEAL BEING ITA NO.1825/MUM./2016, WE HAVE UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO 12. 5% OF THE NON GENUINE PURCHASES. THAT BEING THE CASE, THE GROUND RAISED HAS BECOME INFRUCTUOUS, HENCE, DISMISSED. 19. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ITA NO. 1826 /MUM./2016 REVENUE S APPEAL A.Y. 20 09 10 20. IN GROUND NO.1, THE REVENUE HAS CHALLENGED THE DECISION OF LEARNED COMMISS IONER (APPEALS) IN RESTRICTING THE COMMISSION INCOME TO 0.25% OF THE TOTAL TRANSACTION VALUE WITH LIL. 21. THIS GROUND IS IDENTICAL TO GROUND NO.1 RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.1824/MUM./2016. WHILE DECIDING THE ISSUE IN THE SAID APPEAL, WE HAVE UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION ON ACCOUNT OF COMMISSION INCOME TO 0.25% OF THE TRANSACTION VALUE WITH LIL. IN VIEW OF THE AFORESAID, THE GROUND RAISED IS DISMISSED. 9 SHRI AJAY GUPTA 22. IN GROUND NO.2, THE REVENUE HAS C HALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. 23. THIS GROUND IS IDENTICAL TO GROUND NO.2, RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.1825/MUM./2016. WHILE DECIDING THE ISSUE IN THE SAID APPEAL, WE HAVE UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO 12.5% OF THE NON GENUINE PURCHASES. IN VIEW OF THE AFORESAID, GROUND RAISED IS DISMISSED. 24. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA N O. 2146 /MUM./2016 ASSESSEE S APPEAL A.Y. 20 12 13 25. THE ONLY GROUND RAISED BY THE ASSESSEE IS CONTESTING THE ADDITION OF ` 2.50 LAKH ON ACCOUNT OF INSUFFICIENT DRAWING TOWARDS HOUSEHOLD EXPENSES. 26. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAVING FOUND THAT THE ASSESSEE HAS SHOWN INADEQUATE HOUSEHOLD EXPENSES IN DIFFERENT ASSESSMENT YEARS , BEGINNING FROM THE ASSESSMENT YEAR 2006 07 TO 2012 13 ENHANCED THE HOUSEHOLD EXPENSES . C ONSEQUENTLY , HE MADE ADDITION S TOWARDS UNEXPLAINED EXPENDI TURE UNDER SECTION 69C OF THE ACT IN THE ASSESSMENT YEAR S 10 SHRI AJAY GUPTA 2008 09 TO 2012 13. THOUGH, THE ASSESSEE CONTESTED THE ADDITION S BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, HE WAS UNSUCCESSFUL. 27. WE HAVE CONSIDERED RIVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD. IT IS OBSERVED , IN THE ASSESSMENT YEAR S 2008 09, 2009 10 AND 2011 12, THOUGH , THE ASSESSEE HAD CONTESTED SIMILAR ADDITION S IN THE APPEALS PREFERRED BEFORE THE TRIBUNAL, HOWEVER, IN COURSE OF HEARING OF APPEAL S THE ASSESSEE ACCEPTED THE ADDITION S . FACTUAL POSITION BEING SIMILAR IN THE IMPUGNED ASSESSMENT YEAR, WE DECLINE TO INTERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 28. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. 29. TO SUM UP, ALL THE APPEAL S ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 26.11.2019 SD/ - PRAMOD KUMAR VICE PRESIDENT SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 26.11.2019 11 SHRI AJAY GUPTA COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI