RAMREKHA SHUKLA, MUMBAI V. ITO 32 (3)(1), Mumbai

ITA 219/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6961 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MAHESH SABOOLD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 143(2); 145(3); 148

Judgement Text

ITA NO.219/MUM/2019 RAMREKHA SHUKLA ASSESSMENT YEAR :2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO 219/MUM/2019 ( / ASSESSMENT YEAR : 2009-10 ) SHRI RAMREKHA SHUKLA, A 204, RIDDHI APARTMENT, SAIBABA NAGAR, S.V. ROAD, BORIVALI (W) MUMBAI 400 092. / VS. I TO 32(3)(1), C-11, PRATYAKSH KAR BHAWAN BANDRA KURLA COMPLEX, BANDRA EAST MUMBAI 400 051. %& ./ ./PAN/GIR NO. AAUPS-0630-A ( &( /APPELLANT ) : ( )*&( / RESPONDENT ) ASSESSEE BY : MR. MAHESH SABOO-LD. AR REVENUE BY : MS. JOTHILAKSHMI NAYAK-LD. DR / DATE OF HEARING : 29/01/2020 / DATE OF PRONOUNCEMENT : 05/02/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-44, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-44/ITO-32(3)(1)/IT-77/15-16 DATED 31/12/2018 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE AUTHORITIES BELOW HAVE ERRED IN MAKING/SUSTAINING AN ADDITION OF RS.6,17,5 08/- CALCULATED @ 12.5% OF THE ITA NO.219/MUM/2019 RAMREKHA SHUKLA ASSESSMENT YEAR :2009-10 2 PURCHASES MADE OF RS. 49,40,061/- FROM THE SO CALLE D HAVALA / SUSPICIOUS DEALERS AND THE REASONS/JUSTIFICATIONS ASSIGNED/GIVEN FOR D OING SO WERE VEHEMENTLY DENIED AND WERE WHOLLY WRONG WHICH ARE NOT IN ACCORDANCE W ITH THE FACTS OF THE CASE, AND PROVISIONS OF THE INCOME TAX ACT, 1961 AND RULES MA DE THERE UNDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ASSESSING OFFICER HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271(1)( C) OF THE IT ACT AS NO INCOME WAS CONCEALED NOR ANY INACCURATE DETAILS OF SUCH INCOME WERE FURNISHED BY THE APPELLANT. AS EVIDENT FROM GROUNDS OF APPEAL, THE SOLE SUBJECT MATTER OF THE APPEAL IS ESTIMATED ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. GROUND NO.2 IS RELATED WITH INITIATION OF PENALTY U/S 271( 1)(C) WHICH IS PREMATURE AT THIS STAGE AND HENCE DISMISSED. 2. WE HAVE CAREFULLY HEARD THE SUBMISSIONS MADE BY BOTH REPRESENTATIVES. WE HAVE ALSO PERUSED RELEVANT MATE RIAL ON RECORD. OUR ADJUDICATION TO ISSUE RAISED IN THE APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF METAL S UNDER PROPRIETORSHIP CONCERN NAMELY M/S AJAY TRADING CORPORATION, WAS ASSESSED FOR YEAR UNDER CONSIDERATION 143(3) R.W.S. 147 ON 16/03/2015 WHEREIN THE ASSESSEE WAS SADDLED WITH IMPUGNED ESTIMATED ADDITI ONS OF RS.6.17 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 29/09/2009 AT NIL AND THE SAME WAS PROCESSED U/S 143(1). 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRANSPIRED THAT THE ASSESSEE OBTAINED BOGUS PURCHASES BILLS AGGREGATING TO RS.49 .40 LACS FROM AS MANY AS 9 ENTITIES, THE DETAILS OF WHICH HAVE ALREA DY BEEN EXTRACTED IN ITA NO.219/MUM/2019 RAMREKHA SHUKLA ASSESSMENT YEAR :2009-10 3 PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY , THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 07/03/2014 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTAN TIATE THE PURCHASE TRANSACTIONS. 3.3 ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES BU T FAILED TO PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF TR ANSACTIONS. ACCORDINGLY, THE BOOKS WERE REJECTED U/S 145(3) AND THESE PURCHASES WERE HELD AS BOGUS / UNVERIFIABLE PURCHASES. FINALL Y, LD. AO ESTIMATED AN ADDITION OF 12.5% AGAINST SUCH PURCHASES WHICH C AME TO RS.6.17 LACS AND ADDED THE SAME TO THE INCOME OF THE ASSESS EE. 4. BEFORE LD. CIT(A), THE ASSESSEE DREW ATTENTION T O THE FACT THAT CORRESPONDING SALES WERE MADE AND THE TRANSACTIONS WERE ROUTED THROUGH BANKING CHANNELS. THE ASSESSEE HAD SUBMITTE D THE DELIVERY PROOF OF GOODS AND ADEQUATE QUANTITATIVE DETAILS OF PURCHASE AND SALES WERE FURNISHED. THE ASSESSEE ALSO SUBMITTED THAT KE EPING IN VIEW THE GROSS PROFIT / NET PROFIT RATE OF 5.62% & 1.45% RES PECTIVELY, THE ESTIMATION WAS ON THE HIGHER SIDE. THE ASSESSEE ALS O PLACED RELIANCE ON THE APPELLATE ORDER FOR AY 2010-11. HOWEVER, NOT CO NVINCED, LD. CIT(A) OBSERVED THAT THE SUPPLIERS WERE FOUND TO BE NON-EX ISTENT. IT WAS ALSO OBSERVED THAT THE FACTUAL MATRIX SUGGESTED THAT THE ASSESSEE MADE PURCHASES NOT FROM THESE SUPPLIERS BUT FROM SOME OT HER SUPPLIERS IN THE GREY MARKET AND THEREFORE, ESTIMATED ADDITIONS WERE JUSTIFIED. THE DECISION OF ITS PREDECESSOR FOR AY 2010-11 REDUCING THE ESTIMATION TO 5% WAS HELD TO BE NON-ACCEPTABLE / NON-APPLICABLE. FIN ALLY, THE ESTIMATED ITA NO.219/MUM/2019 RAMREKHA SHUKLA ASSESSMENT YEAR :2009-10 4 ADDITIONS OF 12.5% AS MADE BY LD. AO WERE UPHELD. A GGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEFORE US. 5. UPON DUE CONSIDERATION, WE FIND THAT THE REVENUE ASSAILED THE ORDER OF LD. CIT(A) FOR AY 2010-11 PASSED IN ASSESS EES OWN CASE, BEFORE THIS TRIBUNAL VIDE ITA NO.6257/MUM/2018 ORDE R DATED 02/12/2019. HOWEVER, THE COORDINATE BENCH UPHELD TH E ESTIMATION OF 5% AS MADE BY LD. CIT(A) AND DECLINED TO INTERFERE IN THE SAME. THEREFORE, KEEPING IN VIEW THE CONSISTENT STAND OF TRIBUNAL, W E REDUCE THE ESTIMATION TO 5% OF ALLEGED BOGUS PURCHASE OF RS.49,40,061/- WHICH COMES TO RS.2,47,003/-. THE ORDERS OF LOWER AUTHORI TIES STAND MODIFIED TO THAT EXTENT. THE LD. AO IS DIRECTED TO RECOMPUTE TH E INCOME OF THE ASSESSEE IN TERMS OF THIS ORDER. 6. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 2020. SD/- SD/- (MAHAVIR SINGH) (MA NOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/02/2020 SR.PS. JAISY VARGHESE !'#' / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT ITA NO.219/MUM/2019 RAMREKHA SHUKLA ASSESSMENT YEAR :2009-10 5 3. 1 ( ) / THE CIT(A) 4. 1 / CIT CONCERNED 5. 23),4 , 4 , / DR, ITAT, MUMBAI 6. 356 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.