Sankalp Technologies, Pune V. Deputy Commissioner of Income-tax, Circle - 6, Pune

ITA 2199/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5066 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 31-12-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 20-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI , AM . / ITA NO. 2 199 /P U N/201 7 / ASSESSMENT YEAR : 20 1 0 - 1 1 SANKALP TECHNOLOGIES 440/441, MANGALWAR PETH, OPP. LADKAT PETROL PUMP, NARPATGIRI CHOWK, PUNE 4110 11 . / APPELLANT PAN: A A WFS6179C VS. THE DY. COMM ISSIONER OF INCOME TAX, CIRCLE 6, PUNE . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 31 . 12 .201 8 / DATE OF PRONOUNCEMENT: 06 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 8 , PUNE , DATED 2 7 . 0 5 .201 7 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS FILED THE FOLLOWING CONCISE GROUND OF APPEAL: - ITA NO. 2199 /P U N/201 7 SANKALP TECHNOLOGIES 2 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LOWER AUTHORITY HAS ERRED IN CONFIRMING THE ADDITION OF RS.20,70,120/ - B EING ALLEGED BOGUS PURCHASES MADE FROM THE PARTIES BY DISREGARDING APPELLANTS CONTENTION AND VARIOUS DOCUMENTARY EVIDENCE SUBMITTED BEFORE LOWER AUTHORITIES. YOUR APPELLANT PRAYS FOR DELETION OF ENTIRE ADDITION. 3. THE ASSESSEE HAS RAISED CONCISE GROUND OF APPEAL AGAINST ADDITION OF 20,70,120/ - MADE ON ACCOUNT OF PURCHASES FROM BOGUS PARTIES. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DIRECTOR GENERAL (INV), PUNE THAT THE ASSESSEE HAD INDULGED IN HAWALA T RANSACTIONS AFTER RECORDING REASONS FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE HAD MADE TOTAL PURCHASES OF 20,70,120/ - FROM THREE CONCERNS WHOSE NAMES APPEARE D IN THE LIST OF SALES TAX DEPARTMENT, MAHARASHTRA FOR DEFAULTING IN PAYMENT OF VAT. THE ASSESSEE DID NOT FURNISH ANY RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER HELD THE PURCHASES MADE FROM HAWALA PA RTIES AS BOGUS PURCHASES AND MADE AN ADDITION OF 20,70,120/ - . 5. THE CIT(A) NOTED THAT THE ASSESSEE HAS FAILED TO FURNISH DOCUMENTS OF ESTABLISHING TRANSPORTATION OF GOODS, OCTROI RECEIPTS, ETC. HE FURTHER REFERS TO THE NEXT CONTENTION OF ASSESSEE, WHEREIN THE ASSESSEE HAS CHALLENGED THE ORDER OF ASS ESSING OFFICER IN MAKING DISALLOWANCE WITHOUT GIVING AN OPPORTUNITY TO CROSS EXAMINE THE PERSONS WHOSE STATEMENTS WERE USED AGAINST HIM. THE CIT(A) COUNTERS THE SAME AND POINTED OUT THAT DISALLOWANCE WAS NOT MADE ON THE BASIS OF ANY STATEMENT OF ANY PERSO N BUT WAS MADE AS THE ASSESSEE HAD FAILED TO FURNISH INFORMATION TO SUPPORT THE PURCHASES MADE FROM THE ALLEGED SUPPLIERS. THE CIT(A) ALSO EXAMINED THE DOCUMENTARY EVIDENCE FILED BY ITA NO. 2199 /P U N/201 7 SANKALP TECHNOLOGIES 3 ASSESSEE AND NOTED THAT ALL THE THREE PARTIES WERE LOCATED IN MUMBAI AND THE GOODS PURCHASED BEING COMPUTERS AND SPARE PARTS WERE LIABLE FOR OCTROI DUTY. HOWEVER, NO OCTROI RECEIPTS WERE FILED TO SUBSTANTIATE THE PURCHASES MADE FROM MUMBAI. FURTHER, IT IS NOTED THAT 15 COMPUTERS EACH WERE PURCHASED FROM M/S. OM CORPORATION AN D M/S. PARSHVA & CO. BUT THE ASSESSEE HAD FAILED TO ESTABLISH HOW THE PARTY IN MUMBAI HAD TRANSFERRED THE GOODS TO PUNE. REGARDING THIRD PARTY I.E. AMEE ENTERPRISES, THE ITEMS PURCHASED WERE SMALL ACCESSORIES OF COMPUTERS AND SMALL IT EMS WERE PURCHASED O N DIFFERENT DATES AND THE PAYMENT AGAINST THE SAME WERE MADE AFTER PERIOD OF TWO YEARS. THE CIT(A) ALSO TOOK NOTE OF 23 SALE INVOICES FILED BY ASSESSEE, OUT OF WHICH 13 HAD ONLY THE NAMES OF PARTY WITHOUT ITS ADDRESS OR ANY CONTACT NUMBERS AND THERE WAS A LSO NO EVIDENCE TO SHOW THAT HOW THE COMPUTES WERE SOLD TO THE PERSONS AND TRANSPORTED TO THEM. 6. ANOTHER ASPECT WHICH WAS NOTED BY THE CIT(A) WAS THAT THE ASSESSEE WAS PRIMARILY A SOFTWARE MANUFACTURER AND SELLER AND THE MAJOR COMPONENTS OF SALES WERE SOFTWARE SALES OF 96,29,689/ - AND WEB SALE OF 22,20,271/ - , AS AGAINST IT THE ALLEGED TURNOVER FROM SALE OF COMPUTER & HARDWARE WAS ONLY 22,58,197/ - . THE ASSESSEE AGAINST THE SAME HAD SHOWN PURCHASES OF COMPUTER AND HARDWARE FROM MUMBAI AT 20,70, 120/ - . IN VIEW THEREOF, THE CIT(A) ALSO REJECTED THE CONTENTION OF ASSESSEE THAT WHERE SALES ARE ACCEPTED, THEN PURCHASES MUST ALSO BE ACCEPTED AND IN THE ABSENCE OF PROOF OF ANY DELIVERY THROUGH TRANSPORT BILLS, OCTROI RECEIPTS, LORRY NUMBER, GATE PASS, ETC. TO SUBSTANTIATE THE RECEIVING GOODS, THE CIT(A) UPHELD THE ADDITION OF 20,70,120/ - . THE CIT(A) ALSO REJECTED THE PLEA OF ASSESSEE ON WITHOUT PREJUDICE BASIS TO APPLY THE NET PROFIT RATE TO ESTIMATE THE INCOME IN THE HANDS OF ASSESSEE. ITA NO. 2199 /P U N/201 7 SANKALP TECHNOLOGIES 4 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. THE LEARNED AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE BEFORE US STRESSED THAT FOLLOWING THE ORDER IN THE CASE OF OTHER BOGUS PURCHASES WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 28.04.2017 , ADDITION BE RESTRICTED TO THE GP RATE TO BE APPLIED. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH IS ARISING IN THE PR ESENT APPEAL IS IN RESPECT OF PURCHASES MADE BY ASSESSEE FROM THREE DIFFERENT PARTIES, WHO ARE BASED IN MUMBAI. THE ASSESSEE CLAIMS TO HAVE PURCHASED COMPUTERS, HARDWARE AND ACCESSORIES FROM THE SAID PARTIES. ALL THE THREE PARTIES ARE OPERATING IN MUMBAI , WHEREAS THE ASSESSEE IS CARRYING THE BUSINESS IN PUNE. FIRST AND FOREMOST ONUS UPON THE ASSESSEE WAS TO ESTABLISH HOW THE GOODS WHICH WE RE PURCHASED FROM MUMBAI HAVE BEEN TRANSPORTED TO PUNE, FOR WHICH THE ASSESSEE HAS FAILED TO FURNISH ANY TRANSPORT BI LLS, LORRY RECEIPTS, WEIGHING SLIP, DELIVERY CHALLANS OR GATE PASSES OR ANY OTHER EVIDENCE TO SHOW THAT GOODS HAVE BEEN TRANSPORTED FROM MUMBAI TO PUNE AND THEIR RECEIPT IN PUNE. THE ASSESSEE HAS POINTED OUT THAT IT HAD PURCHASED 15 COMPUTERS FROM M/S. OM CORPORATION FOR TOTAL CONSIDERATION OF 3,69,720/ - . THUS, THE COMPUTERS WERE PURCHASED ON 02.07.2009 AND THE PAYMENT FOR THE SAME WAS MADE ON 29.03.2010 I.E. AFTER GAP OF NINE MONTHS. FURTHER, IN THE CASE OF M/S. PARSHVA & CO. FROM WHOM 15 ITA NO. 2199 /P U N/201 7 SANKALP TECHNOLOGIES 5 COMPUTERS WERE PURCHASED ON 02.07.2009 AND ANOTHER 1 4 COMPUTERS ON 12.10.2009. THE CIT(A) HAS FAILED TO BELIEVE THE CASE OF ASSESSEE THAT THE GOODS WERE TRANSPORTED THROUGH LORRY AS THE UNITS TRANSPORTED WERE LESS. FURTHER, THE ASSESSEE HAD NOT PROVIDED ANY IOTA OF EVIDENCE AND THE NATURE OF TRANSPORT BIL LS, LORRY NUMBER, ETC. THE PURCHASE OF 15 COMPUTERS FOR 3,58,800/ - WAS MADE ON 05.05.2009 AND 14 COMPUTERS FOR 3,05,760/ - ON 12.10.2009 AND THE PAYMENTS AGAINST BOTH PURCHASES WERE RELEASED ON 26.03.2010 AFTER ALMOST 10 MONTHS FROM THE FIRST PURCHASE S. THE ASSESSEES CASE OF PURCHASING THE GOODS ON CREDIT WAS NOT ACCEPTABLE. IN RESPECT OF THIRD PARTY I.E. AMEE ENTERPRISES FROM WHOM SMALL ACCESSORIES WERE PURCHASED ON DIFFERENT DATES DURING THE PERIOD 10.04.2009 TO 02.12.2009 AND THE PAYMENTS AGAINST THEM WERE MADE FROM 30.03.2011 TO 26.07.2011 I.E. AFTER ALMOST TWO YEARS. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE FIND MERIT IN THE ORDER OF CIT(A) AND STRONGLY RELYING ON THE OBSERVATIONS OF CIT(A), WE UPHOLD THE ADDITION IN THE HANDS OF A SSESSEE. HOWEVER, FOR THE SAKE OF BREVITY, WE ARE NOT REPRODUCING THE FINDINGS OF CIT(A), THOUGH THE SAME ARE BEING REFERRED TO. ACCORDINGLY, CONCISE GROUND OF APPEAL RAISED BY ASSESSEE IS DISMISSED. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSE D. ORDER PRONOUNCED ON THIS 6 TH DAY OF FEBR UARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWL A ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 6 TH FEBR UARY , 201 9 . GCVSR ITA NO. 2199 /P U N/201 7 SANKALP TECHNOLOGIES 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 8 , PUNE ; 4. THE PR. CIT - 3 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE S ECRETARY , / ITAT, PUNE