NIVEDITA CHEMICALS P.LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 2464/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0936 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 30-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: KIRAN MEHTA LD
• Keywords: Bogus purchase; Onus to prove
• Section: 143(3)

Judgement Text

ITA NO.3487 & 2464/M/2015 NIVEDITA CHEMICALS PRIVATE LIMITED ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3487/MUM/2015 & ./I.T.A. NO. 2464/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) NIVEDITA CHEMICALS P VT. LTD. A-14 MIDC CROSS ROAD NO.5 ANDHERI (E) MUMBAI -400 093 / VS. ASSISTANT COMMISSIONER OF INCOME-TAX 10(3)(1) ROOM NO. 212, AAYAKAR BHAVAN M.K.ROAD MUMBAI 400020 ./ ./PAN/GIR NO. AAACN-7199-L ( /APPELLANT ) : ( !' / RESPONDENT ) A SSESSEE BY : SHRI KIRAN MEHTA, LD. AR RE VENUE BY : SHRI NAVEEN GUPTA, LD. DR / DATE OF HEARING : 01/05/2017 / DATE OF PRONOUNCEMENT : 01/05/2017 ITA NO.3487 & 2464/M/2015 NIVEDITA CHEMICALS PRIVATE LIMITED ASSESSMENT YEAR 2011-12 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE AS WELL AS ASSES SEE FOR ASSESSMENT YEAR [AY] 2011-12 ASSAILS THE ORDER OF L D. COMMISSIONER OF INCOME TAX (APPEALS)-17 [CIT(A)], MUMBAI DATED 25/0 3/2015 QUA CONFIRMATION OF CERTAIN ADDITIONS WITH RESPECT TO C ERTAIN BOGUS PURCHASES. 2. BRIEFLY STATED, THE ASSESSEE, BEING CORPORATE AS SESSEE, WAS ASSESSED U/S 143(3) AT RS.2,56,24,430/- AFTER CERTA IN ADJUSTMENTS / DISALLOWANCES VIDE ASSESSING OFFICER [AO] ORDER DAT ED 24/02/2014 AS AGAINST RETURNED INCOME OF RS.1,78,89,673/- E-FILED BY ASSESSEE ON 26/09/2011. THE ASSESSEE WAS ENGAGED AS MANUFACTURER OF DRUGS AND CHEMICALS. ONE OF THE ADDITION WAS RELATED WITH BOGUS PURCHASES AMOUNTING TO RS.60,34,455/- MADE BY ASSESSEE FROM T HREE PARTIES WHICH WERE LISTED AS ACCOMMODATION ENTRY PROVIDER / BOGUS SUPPLIER AS PER THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, MAHARASHTRA. IN SUPPORT, THE ASSESSEE SUBMITTED LEDGER EXTRACTS, IN VOICE COPIES, PROOF OF DELIVERY OF GOODS AND BANK STATEMENT HIGHLIGHTING T RANSACTIONS WITH THESE PARTIES. THE LD. AO NOTED CERTAIN DISCREPANCI ES IN THE DOCUMENTS AND CONDUCTED PHYSICAL INQUIRY AT THE PREMISES OF T HE SUPPLIERS WHICH REVEALED NONE OF THE PARTIES EXISTED AT THE GIVEN A DDRESSES WHICH LED THE AO TO CONCLUDE THAT THESE PURCHASES WERE BOGUS WHIC H RESULTED INTO IMPUGNED ADDITIONS. ITA NO.3487 & 2464/M/2015 NIVEDITA CHEMICALS PRIVATE LIMITED ASSESSMENT YEAR 2011-12 3 3. AGGRIEVED, THE ASSESSEE CONTESTED THE ADDITION WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 25/03/2015 WHEREIN IT SUBMITTED VARIOUS PURCHASE DOCUMENTS, QU ANTITATIVE DETAILS AND JUSTIFIED THE PURCHASES VIS--VIS THE NATURE OF ASSESSEES BUSINESS AND ALSO FURNISHED COMPARATIVE GP/NP CHART FOR SEVE RAL YEARS TO CONTEND THAT THE PURCHASES WERE GENUINE. THE LD. CI T(A) AFTER CONSIDERING THE VARIOUS CONTENTIONS / EVIDENCES REN DERED BY THE ASSESSEE COUPLED WITH FACTUAL MATRIX OF THE CASE AN D VARIOUS JUDICIAL PRONOUNCEMENTS CONFIRMED THE ADDITIONS TO THE EXTEN T OF 5% TO ACCOUNT FOR VAT, 1% TO ACCOUNT FOR COMMISSION PAID TO BOGUS SUPPLIERS AND PEAK PURCHASES MADE FROM THESE PARTIES WHICH, IN ALL, AG GREGATED TO RS.28,38,922/-. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US BY WAY OF ITA NO. 2464/MUM/2015 WHEREAS THE REVENUE VI DE ITA NO. 3487/MUM/2015 IS AGAINST THE RELIEF PROVIDED BY THE LD. CIT(A). 4. THE LD. COUNSEL FOR ASSESSEE [AR] DREW OUR ATTEN TION TO THE FACT THAT THE ASSESSEE HAS SUFFERED DISALLOWANCE OF RS.2 8,38,922/- OUT OF ALLEGED BOGUS PURCHASES OF RS.60,34,455/- WHICH IS ROUGHLY 47% AND THEREFORE, ON THE HIGHER SIDE AND THEREFORE, THE AS SESSEE DESERVES FURTHER RELIEF IN THE CASE PARTICULARLY WHEN THE AS SESSEE WAS IN POSSESSION OF PURCHASES DOCUMENTS AND ALL PAYMENTS WERE THROUGH BANKING CHANNELS. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE ASSAILED THE O RDER OF LD. CIT(A) BY CONTENDING THAT THE ONUS TO PROVE THE PURCHASES BEYOND DOUBT SQUARELY LIED ON THE ASSESSEE WHICH HE HAS FA ILED TO DISCHARGE AND HENCE, THE ASSESSEE DESERVES FULL DISALLOWANCE AGAINST BOGUS PURCHASES. ITA NO.3487 & 2464/M/2015 NIVEDITA CHEMICALS PRIVATE LIMITED ASSESSMENT YEAR 2011-12 4 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AFTER ANALYZING THE VARIOUS CON TENTIONS OF RESPECTIVE REPRESENTATIVES COUPLED WITH OBSERVATION / FINDINGS OF LD. CIT(A) AND AFTER APPRECIATING FACTUAL MATRIX OF THE CASE, WE F IND THAT THE CONCLUSION REACHED AT BY THE LD. CIT(A) IS A REASONABLE AND FA IR ONE IN VIEW OF THE FACT THAT THE ASSESSEE WAS IN POSSESSION OF REQUISI TE INVOICES, PAYMENTS WERE THOUGH BANKING CHANNELS, QUANTITATIVE DETAILS WERE PROVIDED TO THE LOWER AUTHORITIES. THE TRIBUNAL, INVARIABLY, IN ALL SUCH CASES, HAVE TAKEN A STAND THAT EVEN IF PRESUMING THAT ALL PURCHASES W ERE BOGUS, ENTIRE ADDITION THEREOF WAS NOT WARRANTED FOR PARTICULARLY WHEN THE SALES WERE NOT IN DISPUTE AND THE ADDITION, IF ANY, WHICH HAS TO BE MADE IN ALL SUCH CASES IS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN SUCH PURCHASE TRANSACTIONS. THEREFORE, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF LD. CIT(A) AND SEE NO REASON TO INTERFERE WITH THE SAME . HENCE, BY CONFIRMING THE SAME, WE DISMISS BOTH THE APPEALS. 7. IN NUTSHELL, THE REVENUES APPEAL AS WELL AS AS SESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST MAY, 2017. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 01 .05.2017 SR.PS:- THIRUMALESH ITA NO.3487 & 2464/M/2015 NIVEDITA CHEMICALS PRIVATE LIMITED ASSESSMENT YEAR 2011-12 5 / 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