INTIME FIRE APPLIANCES P.LTD, MUMBAI V. DCIT 10(1)(2), MUMBAI

ITA 2196/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9907 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Assessee Lawyers: AAKRITI SETH LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO 2196/MUM/2017 INTIME FIRE APPLIANCES PVT.LTD ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 2196/MUM/2017 ( / ASSESSMENT YEAR: 2010-11) INTIME FIRE APPLIANCES PVT.LTD 21A,GHANSHYAM INDUSTRIAL ESTATE OFF VEERA DESAI ROAD, ANDHERI(W),MUMBAI 400 053 / VS. DEPUTY COMMISSIONER OF INCOME TAX 10(1)(1) AAYKAR BHAVAN, M.K.ROAD, CHURCHGATE MUMBAI -400 020 ./ ./PAN/GIR NO. AABCI-2217-B ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : AAKRITI SETH, LD. AR REVENUE BY : SAURABH DESHPANDE, LD. DR / DATE OF HEARING : 24/08/2017 / DATE OF PRONOUNCEMENT : 06 /09/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX ITA NO 2196/MUM/2017 INTIME FIRE APPLIANCES PVT.LTD ASSESSMENT YEAR 2010-11 2 (APPEALS)-17 [CIT(A)], MUMBAI DATED 16/01/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF BOGUS PURCHASES. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE DEALING IN FIRE APPLIANCES, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 26/02/2016 AT RS.78,33,725/- AFTER ADDITION OF BOGUS PURCHASES FOR RS.4,62,855/-. THE ORIGINAL RETURN WAS E-FILED ON 30/09/2010 AT RS.73,70,870/- WHICH WAS PROCESSE D U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASES BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.41,44,280/- FROM FOUR PARTIES. CONSEQUENTLY, NOT ICE U/S 148 DATED 25/03/2015 WAS ISSUED TO THE ASSESSEE. 2.3 TO CONFIRM THE PURCHASE TRANSACTIONS, NOTICES U /S 133(6) WAS ISSUED TO ALLEGED BOGUS SUPPLIERS BUT THE SAME WERE RETURNED BACK UN- SERVED. THE ASSESSEE COULD NOT PRODUCE THE PARTIES BUT SUBM ITTED LEDGER EXTRACTS, PURCHASE/SALE INVOICES, DELIVERY C HALLANS, BANK STATEMENTS ETC. TO SUPPORT THE PURCHASE TRANSACTIONS. HOWEVER, NOT CONVINCED, LD. AO CONFIRMED THE ADDITIONS TO THE EX TENT OF 12.5% ON SUCH PURCHASES TO ACCOUNT FOR UNDUE BENEFIT OF VAT OBTAINED BY THE PARTY. THE ADDITION, THUS MADE, WORKED OUT TO BE RS .4,62,855/-. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 16/01/2 017 WHERE LD. CIT(A) PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUN CEMENTS CONFIRMED ITA NO 2196/MUM/2017 INTIME FIRE APPLIANCES PVT.LTD ASSESSMENT YEAR 2010-11 3 THE STAND OF LD. AO. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] ASSAILE D THE ADDITIONS ON THE PREMISES THAT THE PURCHASED MATERIAL WAS CON SUMED BY THE ASSESSEE AND THE TURNOVER HAS NOT BEEN DISPUTED. FU RTHER, THE PAYMENTS WERE THROUGH BANKING CHANNELS. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE [DR] DREW OUR ATTENTION TO THE FACT THAT NOTICES U/S 133(6) WAS R ETURNED BACK SINCE NONE OF THE PARTY WAS FOUND AT THE GIVEN ADDRESS. F URTHER, THE ASSESSEE COULD NOT PRODUCE A SINGLE PARTY TO CONFIRM THE PUR CHASE TRANSACTION AND THEREFORE, THE ADDITION MADE BY LD. AO WAS QUITE FA IR AND REASONABLE AND THEREFORE, NO FURTHER RELIEF COULD BE GRANTED T O THE ASSESSEE. 6. HEARD AND PERUSED RELEVANT MATERIAL ON RECORD. W E ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITH OUT PURCHASE / CONSUMPTION OF MATERIAL KEEPING IN VIEW THE ASSESSE ES NATURE OF BUSINESS. THE SALES TURNOVER ACHIEVED BY THE ASSES SEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS WERE THROU GH BANKING CHANNELS. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY CONFIRMATIONS FROM ANY OF THE ALLEGED BOGUS SUPPLIERS AND FURTHER NONE OF THE PARTIES WAS FOUND AT THE GIVEN ADDRESSES, WH ICH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SIT UATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEM ENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN T HE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. AO HAS RIGHTLY ITA NO 2196/MUM/2017 INTIME FIRE APPLIANCES PVT.LTD ASSESSMENT YEAR 2010-11 4 DONE WHICH IS FURTHER CONFIRMED BY LD. CIT(A). THER EFORE, FINDING THE SAME QUITE FAIR AND REASONABLE, WE SEE NO REASON TO INTERFERE WITH THE SAME. 7. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06 . 09.2017 SR.PS:- THIRUMALESH ! / 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