ACIT CIR 28(2), NAVI MUMBAI V. KASI SYAMALA REDDY, NAVI MUMBAI

ITA 2338/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8693 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 03-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C MUMBAI BEFORE SHRI D.T.GARASIA , JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 23 2 7 /MUM/20 1 7 ( / ASSESSMENT YEAR : 20 09 - 1 0 ) RITESH KANTILAL BAFNA, SON AND LEGAL HEIR OF LATE KANTILA M BAFNA, 801, SHATRUNJAY DARSHAN, LOVE LANE, CROSS LANE, BYCULLA, MUMBAI - 400027 / VS. INCOME TAX OFFICER, WARD 19(2)( 2 ), MUMBAI. ./ PAN : AAAPB8051G ( / APPEL LANT) : ( / RESPONDENT ) / ASSESSEE BY : NONE / ASSESSEE BY : SHRI RAJAT MI TTAL / DATE OF HEARING : 4.9.2017 / DATE OF PRONOUNCEMENT : 25. 10 . 201 7 / O R D E R PE R RAJESH KUMAR, A. M: THE CAPTIONED IS APPEAL BY THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2009 - 10 AND IT IS DIRECTED AGAINST THE ORDER DATED 16.2.2017 PASSED BY THE LD . CIT(A) WHICH IN TURN HAS ARISEN OUT OF ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT(HEREINAFTER CALLED THE ACT). 2 I.T.A. NO. 23 2 7 /MUM/201 7 AT THE OUTSET, WE WOULD LIKE TO MENTION HERE THAT NEITHER THE ASSESSEE N OR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THIS TRIBUNAL WHEN THE APPEA L WAS CALLED FOR HEARING NOR THERE WAS ANY APPLICATION SEEKING ADJOURNMENT OF THE HEARING RECEIVED IN THE OFFICE OF THE TRIBUNAL DESPITE SERVICE OF NOTICE THROUGH RPAD. THEREFORE, WE PROCEED TO DISPOSE OF THE APPEAL OF THE ASSESSEE EX - PARTE AFTER HE ARING THE LD.DR. 2. GROUND RAISED BY THE ASSESSEE IS AGAINST THE ADDITION UPHELD BY THE ID. CIT(A) AS MADE BY THE AD AMOUNTING TO RS.1,43,02,913J - BEING 12.5% OF THE ALLEGED BOGUS PURCHASES BESIDE AFFIRMING THE REOPENING OF THE ASSESSMENT U / S 147 AN D 148 OF THE ACT. 3. FACTS OF THE CASE ARE THE ASSESSEE FILED RETURN OF INCOME ON 30.9.2009 DECLARING TOTAL INCOME OF RS.3,36,110J - WHICH WAS PROCESSED U / S 143(1) OF THE ACT AND THE ASSESSMENT WAS FRAMED U / S 143(3) OF THE ACT ON 31.10.2 011 ASSESSING THE INCOME AT RS.5,18,580 / - . THEREAFTER A O RECEIVED THE INFORMATION FROM THE DGIT(INV) AND ALSO FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE IS A BENEFICIARY OF BOGUS PURCHASES TO THE TUNE OF RS.11,44,23,300J - A ND ACCORDINGLY THE CASE WAS REOPENED U / S 147 OF THE ACT BY ISSUING NOTICE DATED 26.2.2014 U / S 148 OF THE ACT. THEREAFTER THE STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A O CALLED UPON THE A SSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES ALONG WITH 3 I.T.A. NO. 23 2 7 /MUM/201 7 DOCUMENTARY EVIDENCES WHICH WAS REPLIED BY THE ASSESSEE BY SUBMITTING THAT THE PURCHASES WERE ACTUALLY MADE FROM THE ALLEGED PARTIES AND WAS ALSO SOLD TO VARIOUS CLIENTS. THE ASSESSEE ALSO SUBMITTED THE PURCHASE BILLS AND PAYMENT DETAILS THROUGH BANKING CHANNELS ETC. THE AD ALSO ISSUED NOTICES TO THE PARTIES U/S 133(6) OF THE ACT TO VERIFY THE GENUINENESS OF PURCHASES BUT THE SAME WERE RETURNED UNSERVED. THUS, THE AD WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND CAME TO THE CONCLUSION THAT THE ASSESSEE MADE PURCHASES THROUGH HAWALA DEALERS PARTIES WITHOUT PURCHASING THE MATERIALS PHYSICALLY AND CONSEQUENTLY APPLIED GP RATE AT THE RATE OF 12.5% THEREBY MAKING ADDITION OF RS.1,43,02,913/ - AND ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,48,61,340/ - VIDE ORDER DATED 18.3.2015 MADE U/S 143(3) R.W.S.147 OF THE ACT. IN THE APPELLATE PROCEEDINGS, THE ID.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE, AFTER TA KING INTO ACCOUNT THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE BY HOLDING THAT THE A O HAS ADOPTED A VERY REASONED VIEW IN THE MATTER AND THUS UPHELD THE ADDITION. AGGRIEVED BY THE ORDER OF THE ID. C!T(A), THE ASSESSEE IS IN THIS TRIBUNAL. 4. WE HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE ID. DR AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE HAS AVAILED BOGUS PURCHASES BILLS TO THE TUNE OF RS.11,44,23,300/ - . THE ID. CIT(A) CONFIRMED THE SAME BY HOLDING THAT THE A O HAS TAKEN A REASONABLE VIEW OF THE MATTER AFTER TAKING INTO ACCOUNT THE 4 I.T.A. NO. 23 2 7 /MUM/201 7 C ONTENTIONS OF THE ASSESSEE. IN THE SIMILAR CASES, THE COORDINATE BENCHES HAVE BEEN TAKING A CONSISTENT VIEW THAT SOME REA SONABLE PERCENTAGE ADDITION RANGING FROM 4% TO 12.50% OF THE BOGUS PURCHASES SHOULD BE MADE TOWARDS SAVINGS MADE BY THE ASSESSEE I.E THE ASSESSEE MIGHT HAVE PURCHASED THE MATERIAL FROM GRAY MARKET THEREBY SAVING VAT AND OTHER INCIDENTAL TAXES. AFTER EXAMINING THE MATERIALS BEFORE US AND ARGUMENTS OF THE ID DR , WE OBSERVE THAT THE ID.CIT(A) HAS TAKEN A COGENT AND REASONED VIEW. THUS WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF LD .CIT(A) AND THEREFORE THE SAME IS AFFIRMED . 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25TH OCT , 2017 . SD SD ( D.T.GARASIA ) ( RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : . 25 . 10 .2017 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CI T(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI