ITO 28 (3)(4), MUMBAI V. VINAYKUMAR A.TIWARI, MUMBAI

ITA 2513/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5837 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2513 / / 2019 (%. .2010-11 ) ITA NO. 2513/MUM/2019 (A.Y.2010-11) ITO-28(3)(4), ROOM NO.320, 3 RD FLOOR, 6 TH TOWER, VASHI RLY STATION COMPLEX, NAVI MUMBAI 400 703 / VS. : / APPELLANT SHRI VINAYKUMAR A. TIWARI, A-403, KRISHNA COMPLEX, 4 TH FLOOR, PLOT NO.7, SECTOR-15, SANPADA, NAVI MUMBAI 400 705 PAN:ACAPT2800K : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH / DATE OF HEARING : 15/10/2020 / DATE OF PRONOUNCEMENT : 11/01/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI ( IN SHORT THE CIT (A)) DATED 22/02/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REPAIRING SHIP TUGS, BAR GES, ETC. ON CONTRACTUAL BASIS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IM PUGNED ASSESSMENT YEAR ON 2 ITA NO. 2513/MUM/2019 (A.Y.2010-11) 10/10/2010 DECLARING TOTAL INCOME OF RS.7,24,560/-. THE RETURN OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX A CT, 1961 ( IN SHORT THE ACT). ON THE BASIS OF INFORMATION RECEIVED BY DGIT(INV.), MU MBAI FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE ASSESSMENT FOR ASSES SMENT YEAR 2010-11 IN THE CASE OF ASSESSEE WAS REOPENED. AS PER THE INFORM ATION RECEIVED, THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING OF RS.38,00 ,000/- DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL FROM TWO HAWALA DEALERS. DURING REASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASK ED THE ASSESSEE TO PROVE GENUINENESS OF THE PURCHASES. THE ASSESSEE FAILED TO PRODUCE DOCUMENTS LIKE OCTROI RECEIPTS, TRANSPORT RECEIPTS, STOCK REGISTER, ETC T O SHOW TRAIL OF GOODS. THE ASSESSEE ALSO FAILED TO PRODUCE THE SUPPLIERS OF THE GOODS. EVEN THE NOTICE SENT BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE INCOM E TAX ACT, 1961 ( IN SHORT THE ACT), TO THE SUPPLIERS REMAINED UNRESPONDED. TH US, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE BOGUS PURCHASES. AGGRIEVED BY ASSESSMENT ORDER DATED 01/03/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGING THE ADDITION. THE CIT(A) AFTER EXAMINING THE FACTS AND THE SUBMISSIONS OF THE ASSESSEE RESTRICT ED THE ADDITION TO 12.5% OF BOGUS PURCHASES. AGAINST THE RELIEF GRANTED BY CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPARTM ENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE F INDING OF CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASS ESSEE FAILED TO PROVE GENUINENESS OF THE PURCHASES AND COULD NOT PRODUCE THE SUPPLIERS OF THE GOODS. THE LD.DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON T HE DECISION RENDERED BY HON'BLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEIN S VS. DCIT IN SLP NO.(C) 769 OF 2017 DECIDED ON 16/01/2017 TO UPHOLD THE ADDITION MADE IN THE ASSESSMENT ORDER. 3 ITA NO. 2513/MUM/2019 (A.Y.2010-11) 4. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HASPURPORT EDLY OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.38,00,000/- FROM DECLARE D HAWALA DEALERS . THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE PURCHASES, TH EREFORE, THE ASSESSING OFFICER MADE ADDITION OF ENTIRE SUCH BOGUS PURCHASES. IN FIRST APPELLATE PROCEEDINGS THE CIT(A) HELD THAT SINCE THE TURNOVER DECLARED BY THE ASSESS EE HAS BEEN ACCEPTED AND BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED, ENTIRE BOGUS PURCHASES CANNOT BE ADDED. IT IS ONLY THE PROFIT EMBEDDED IN THE BOGUS PURCHASES THA T HAS TO BE BROUGHT TO TAX. THE CIT(A) ESTIMATED GP @ 12.5% ON BOGUS PURCHASES. (RE: PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 O F 2017 DECIDED ON 15/07/2019 BY HON'BLE BOMBAY HIGH COURT ]. I CONCUR WITH THE FINDINGS OF CIT(A) AND UPHOLD THE SAME. THE APPEAL OF REVENUE IS DISMISSED BEING D EVOID OF MERIT. 5. NO APPEAL/CROSS OBJECTIONS FILED BY THE ASSESSEE AG AINST THE ORDER OF CIT(A) HAS BEEN BROUGHT TO THE NOTICE OF BENCH. IN CASE ANY APPEAL/CROSS OBJECTIONS BY THE ASSESSEE AGAINST IMPUGNED ORDER OF CIT(A) IS NO TICED, THEN THIS ORDER MAY BE RECALLED AND THE CROSS APPEALS MAY BE LISTED TOGETH ER FOR DISPOSAL BY A COMMON ORDER . 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 11 TH DAY OF JANUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 11/01/2021 VM , SR. PS(O/S) 4 ITA NO. 2513/MUM/2019 (A.Y.2010-11) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI