ITO 28 (3)(4), MUMBAI V. VINODKUMAR A. KOTHARI, MUMBAI

ITA 2514/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5842 (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: SMC
• 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
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2514 / / 2019 (%. .2010-11 ) ITA NO. 2514/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 VINOD KUMAR KOTHARI, SHOP NO.14, PLOT NO.1, OM ARCADE, SECTOR -29, TURBHE, NAVI MUMBAI 400 705, PAN:ADHPK0937A : / 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 ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI ( IN SHORT THE CIT (A)) DATED 08/02/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM T HE RECORDS ARE: THE ASSESSEE IS ENGAGED IN RETAIL BUSINESS OF ELECTRIC HARDWARE AND ALLIED GOODS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSM ENT YEAR ON 14/10/2010 2 ITA NO. 2514/MUM/2019 (A.Y.2010-11) DECLARING TOTAL INCOME OF RS.3,54,720/-. ON THE BASIS OF INFORMATION RECEIVED BY DGIT(INV.), MUMBAI FROM SALES TAX DEPARTMENT, GOVER NMENT OF MAHARASHTRA, THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 IN THE CASE OF ASSESSEE WAS REOPENED. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAS OBTA INED BOGUS PURCHASE BILLS AGGREGATING TO RS.23,96,717/- DURING THE PERIOD R ELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL FROM SIX HAWALA DEALERS. DURING ASSE SSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE GENUI NENESS OF THE PURCHASES. THE ASSESSEE FAILED TO PRODUCE DOCUMENTS LIKE OCTRO I RECEIPTS, TRANSPORT RECEIPTS, STOCK REGISTER, ETC. TO SHOW TRAIL OF GOODS. THE ASSESSE E EVEN FAILED TO PRODUCE THE SUPPLIERS OF THE GOODS. THE NOTICE SENT BY THE AS SESSING OFFICER UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), TO THE SUPPLIERS ON THE ADDRESS PROVIDED BY THE ASSESSEE REMAINED UNRESPONDED EXCEP T ONE I.E. M/S. MANAV IMPEX. THE SAID SUPPLIER DENIED ANY BUSINESS TRANSACTIONS WITH THE ASSESSEE . THUS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE BOGU S PURCHASES. AGGRIEVED BY ASSESSMENT ORDER DATED 29/02/2016 PASSED UNDER SECT ION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A CHA LLENGING THE ADDITION. THE CIT(A) AFTER EXAMINING THE FACTS AND THE SUBMISSIONS OF ASSESSEE RESTRICTED THE ADDITION TO 12.5% OF TOTAL BOGUS PURCHASES. AGAINST THE REL IEF 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 EVEN COULD NOT P RODUCE SUPPLIERS OF THE GOODS TO PROVE GENUINENESS OF SUPPLIERS. THE LD.DEPART MENTAL REPRESENTATIVE PLACED RELIANCE ON THE DECISION RENDERED BY HON'BLE SUPREM E COURT OF INDIA IN THE CASE OF N.K. PROTEINS VS. DCIT IN SLP NO.(C) 769 OF 2017 DE CIDED ON 16/01/2017 TO UPHOLD 100% ADDITION MADE IN THE ASSESSMENT ORDER. 3 ITA NO. 2514/MUM/2019 (A.Y.2010-11) 4. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS INDULG ED IN OBTAINING BOGUS PURCHASE BILLS AGGREGATING TO RS.23,96,717/- FROM THE DECLA RED HAWALA DEALERS . THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE PURCHASES AND THE SUPPLIERS. THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF ENTIRE SUCH BOGU S PURCHASES. IN FIRST APPELLATE PROCEEDINGS THE CIT(A) HELD THAT SINCE THE SALES OF THE ASSESSEE HAVE NOT BEEN DISPUTED AND WITHOUT PURCHASES THERE CANNOT BE SAL ES, IT IS ONLY THE PROFIT EMBEDDED IN THE BOGUS PURCHASES THAT HAS TO BE BROU GHT TO TAX. THE CIT(A) RESTRICTED ADDITION TO 12.5% OF BOGUS PURCHASES. THE FINDINGS OF CIT(A) ARE IN LINE WITH THE JUDGMENT RENDERED IN THE CASE OF PCIT VS. PARAMSHAK HTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2 019 BY HON'BLE BOMBAY HIGH COURT . I CONCUR WITH THE FINDINGS OF CIT(A) AND UPHOLD THE SAME. THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID 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. 2514/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