DCIT 8(1), MUMBAI V. KARAMTARA STEEL P.LTD, MUMBAI

ITA 2472/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9283 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHENDR
• Assessee Lawyers: M K PATEL
• Keywords: Bogus purchase; Peak credit
• Section: 143(3); 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.2472/MUM/2017 ASSESSMENT YEAR: 2009-10 DCIT, CENTRAL CIRCLE-8(1), ROOM NO.656, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S KARAMTARA STEEL PVT. LTD. 117, MORYA ESTATE, OSHIWARA LINK ROAD, ANDHERI-WEST, MUMBAI-400053 ( / REVENUE) ( !'# /ASSESSEE) PAN. NO. AACCK5915D ITA NO.2473/MUM/2017 ASSESSMENT YEAR: 2009-10 DCIT, CENTRAL CIRCLE-8(1), ROOM NO.656, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S KARAMTARA ENGINEERING PVT. LTD. 117, MORYA ESTATE, OSHIWARA LINK ROAD, ANDHERI-WEST, MUMBAI-400053 ( / REVENUE) ( !'# /ASSESSEE) PAN. NO. AABCK1921E ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 2 ITA NO.2753/MUM/2017 ASSESSMENT YEAR: 2009-10 M/S KARAMTARA STEEL PVT. LTD. (MERGED WITH KARAMTARA ENGINEERING PVT. LTD. 750, 7 TH FLOOR, MORYA ESTATE, OSHIWARA LINK ROAD, ANDHERI-WEST, MUMBAI-400053 / VS. DCIT-10(1)(2), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# /ASSESSEE) ( / REVENUE) PAN. NO. AACCK5915D ITA NO.2754/MUM/2017 ASSESSMENT YEAR: 2009-10 M/S KARAMTARA FASTEBERS PVT. LTD. (MERGED WITH KARAMTARA ENGINEERING PVT. LTD. 750, 7 TH FLOOR, MORYA ESTATE, OSHIWARA LINK ROAD, ANDHERI-WEST, MUMBAI-400053 / VS. DCIT-10(1)(2), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# /ASSESSEE) ( / REVENUE) PAN. NO. AACCK3082F ITA NO.2755/MUM/2017 ASSESSMENT YEAR: 2009-10 M/S KARAMTARA ENGINEERING PVT. LTD. 750, 7 TH FLOOR, MORYA ESTATE, OSHIWARA LINK ROAD, ANDHERI-WEST, MUMBAI-400053 / VS. DCIT-10(1)(2), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# /ASSESSEE) ( / REVENUE) PAN. NO. AABCK1921E / REVENUE BY SHRI M.C. OMI NINGSHEN-DR !'# / ASSESSEE BY SMT. M.K. PATEL ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 3 $ % & ' / DATE OF HEARING : 26/09/2017 & ' / DATE OF ORDER: 29/09/2017 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF FIVE APPEALS IS BY THE ASSESSEE AS WE LL AS REVENUE AGAINST THE IMPUGNED ORDERS ALL DATED 09/01 /2017 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, CLAIMED THAT FOR ASSESSMENT YEAR 2010-11, THE TRIBU NAL VIDE ORDER DATED 10/03/2017 ADJUDICATED THE ISSUE AND CO NFIRMED THE ADDITION @ 5% OF THE BOGUS PURCHASES. IT WAS EX PLAINED THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURI NG BY EXPLAINING THAT THE LD. ASSESSING OFFICER MADE THE ADDITION AT THE RATE OF 100% AGAINST WHICH THE LD. COMMISSIONER OF INCOME TAX (APPEAL) TOOK THE PEAK BALANCE PLUS 5% O F THE BOGUS PURCHASES. THE LD. COUNSEL, ON A QUESTIONING FROM BENCH, FAIRLY AGREED THAT THE ASSESSEE MADE PURCHAS ES FROM PIONEER TRADING CORPORATION ALONG WITH OTHER SUPPLIERS/PARTIES. ON THE OTHER HAND, THE LD. DR, S TRONGLY CONTENDED THAT THE ASSESSEE DID NOT PRODUCE THE PAR TIES FROM ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 4 WHOM PURCHASES WERE CLAIMED TO BE MADE AND EVEN NO STOCK REGISTER WAS PRODUCED BY THE ASSESSEE, THEREFORE, T HE ONUS CASTE UPON THE ASSESSEE WAS NEVER DISCHARGED. PLEA WAS ALSO RAISED THAT THE ASSESSEE DID NOT PRODUCE THE SUPPOR TING EVIDENCE BEFORE THE LD. ASSESSING OFFICER AS THE NO N-GENUINE NATURE OF PURCHASES WAS NEVER EXPLAINED BY THE ASSE SSEE AND THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IGNORED THE FACTUAL FINDING RECORDED IN THE ASSESSMENT ORDER. A T THIS STAGE, THE BENCH ASKED THE ASSESSEE WHETHER THE ASSESSEE C AN PRODUCE THE PARTIES AND THE STOCK REGISTER. IT WAS EXPLAINED THAT THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE ITS CLAIM AND ALSO CAN PRODUCE THE PARTIES. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFAC TURING, FABRICATION GALVANIZING, ERECTION AND COMMISSION OF TELECOM AND TRANSMISSION TOWERS, DECLARED INCOME OF ` 13,01,09380/- (ASSESSMENT YEAR 2009-10) ON 30/09/2009, WHICH WAS PROCESSED U/S 143(3) OF THE ACT, ASSESSING THE TOTA L INCOME AT ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 5 ` 15,88,60,760/- AND BOOK PROFIT OF ` 13,33,31,239/-. THEREAFTER, THE LD. ASSESSING OFFICER RECEIVED INFO RMATION FROM THE DGIT(INV.) AND ALSO FROM THE MAHARASHTRA SALES TAX DEPARTMENT THAT THE ASSESSEE IS BENEFICIARY OF ACCO MMODATION BILLS OF PURCHASES FROM CERTAIN BOGUS HAWALA DEALER S, WITHOUT ACTUAL DELIVERY OF GOODS. THE NAME OF SUCH PARTIES ARE MENTIONED IN THE IMPUGNED ORDERS. THE LD. ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 147/148 OF THE ACT. THE ENQUIRIES CONDUCTED BY THE SALES TAX DEPARTMENT AND ALSO THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT WER E SENT TO THE ASSESSEE. THE FACTUM OF PURCHASE FROM THE HAWAL A DEALERS WAS ALSO REFER TO THE ASSESSEE COMPANY VIDE NOTICE U/S 142(1) OF THE ACT AND THE ASSESSEE WAS ASKED TO SUBMIT STO CK REGISTER, BILL, INVOICES, BILL OF DELIVERY OF GOODS , TRANSPORTATION DETAILS, BANK STATEMENTS AND OTHER DOCUMENTARY EVID ENCES SUBSTANTIATING THE GENUINENESS OF THE PURCHASES. TH E ASSESSEE WAS ALSO ASKED TO PRODUCE THE PRINCIPAL OF FICER OF THE ALLEGED FIRMS FOR EXAMINATION FROM WHOM PURCHASES W ERE CLAIMED TO BE MADE. THE ASSESSEE DID NOT COMPLY WIT H THE NOTICES. THE LD. ASSESSING OFFICER, IN ORDER TO VER IFY THE ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 6 GENUINENESS OF THE PURCHASES, ISSUED NOTICES U/S 13 3(6) OF THE ACT, WHICH WERE RETURNED BACK UNSERVED. THUS, AS PE R THE REVENUE, THE ONUS CASTE UPON THE ASSESSEE WAS NOT DISCHARGED BY THE ASSESSEE. THE ONLY CLAIM MADE BY THE ASSESSEE WAS THAT THE PAYMENTS WERE MADE THROUGH BA NKING CHANNEL. IN SUCH AS SITUATION, THE LD. ASSESSING OF FICER DISALLOWED THE PURCHASES MADE FROM SUCH PARTIES AND ADDED TO THE TOTAL INCOME, WHILE CALCULATING THE BOOKS PR OFIT. 2.2. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCO ME TAX (APPEAL), SO FAR AS, REOPENING IS CONCERN, CONS IDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS, REOPENING WAS UPHE LD. SO FAR AS, MAKING THE ADDITION WITH RESPECT TO BOGUS P URCHASES, IT WAS HELD THAT THE ASSESSEE COULD NOT PROVE THE GENU INENESS OF PURCHASES. HOWEVER, THE FIRST APPELLATE AUTHORITY AGAIN DISCUSSED VARIOUS DECISIONS AND HELD THAT THE ASSES SEE INFLATED THE EXPENSES BY TAKING BOGUS BILLS OF PURC HASES FROM HAWALA DEALERS AND REDUCED THE DISALLOWANCE TO 20% OF THE BOGUS PURCHASES. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. THE DIFFERENT ASSESSEE OF THE SAME GROUP ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 7 ARE ALSO IN APPEAL, CONFIRMING THE ADDITION OF THE RESPECTIVE AMOUNTS, BEING 20% OF THE TOTAL PURCHASES ON THE B ASIS OF DECISION IN THE CASE OF POONA GALVANIZERS PVT. LTD. (2016) ITA NO.3644/MUM/2015, WHEREIN, THE ADDITIONS WERE RESTR ICTED TO 5% OF THE ALLEGED BOGUS PURCHASES. IF THE TOTALITY OF FACTS AND THE FACTUAL MATRIX IS CONSIDERED, THERE ARE VARIOUS DECISION IN FAVOUR AND AGAINST THE ASSESSEE BUT CERTAINLY DEPEN DS UPON FACTS OF EACH CASE. IN THE PRESENT CASES, THE ASSES SEES ARE MANUFACTURERS, WHO ARE EXPECTED TO PROVE THE CONSUM PTION AND ARE EXPECTED TO PRODUCE THE STOCK REGISTER FOR VERIFICATION TO THE SATISFACTION OF THE ASSESSING OFFICER, WHICH HAS NOT BEEN DONE IN THE PRESENT APPEALS. THE OBJECTIONS, LEADIN G TO THE ADDITIONS, RAISED IN THE ASSESSMENT ORDER, WERE NOT CONSIDERED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL), POS SIBLY WERE NOT BROUGHT TO THE NOTICE OF THE FIRST APPELLA TE AUTHORITY. THUS, WITHOUT GOING INTO MUCH DELIBERATION, THE ASS ESSEE IS DIRECTED TO PRODUCE THE STOCK REGISTER AND OTHER NE CESSARY EVIDENCES IN SUPPORT OF ITS CLAIM BEFORE THE LD. AS SESSING OFFICER. THE ASSESSEE IS ALSO TO PROVE THE CONSUMPT ION OF THE CLAIMED MATERIAL. THE LD. ASSESSING OFFICER IS DIR ECTED TO ITA NOS.2472, 2473, 2753, 2754 & 2755 /MUM/2017 KARAMTARA ENGINEERING PVT. LTD. & ORS. 8 EXAMINE THE CLAIM OF THE ASSESSEE AND AFTER DUE OPP ORTUNITY OF BEING HEARD DECIDE IN ACCORDANCE WITH LAW. SINCE, T HE FACTS AND THE ISSUES ARE IDENTICAL, THEREFORE, ALL THE AP PEALS OF THE ASSESSEE AS WELL AS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEALS ARE ALLOWED FOR STATISTICAL PU RPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26/09/2017 SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# /JUDICIAL MEMBER $ % MUMBAI; ) DATED : 29/09/2017 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 1 $ 2 ( +, ) / THE CIT, MUMBAI. 4. 1 1 $ 2 / CIT(A)- , MUMBAI 5. 45 / ! , 1 +,' +! 6 , $ % / DR, ITAT, MUMBAI 6. 7' 8% / GUARD FILE. / BY ORDER, 04, / //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI