KHIMCHAND OKCHAND BHANSALI, MUMBAI V. INCOME TAX OFFICER, WARD -19(2)(2), MUMBAI

ITA 2682/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7331 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHILD
• Assessee Lawyers: DHAVAL SHAHLD
• Keywords: Bogus purchase; Principle of natural justice
• Section: 143(3); 142(1); 143(2); 147; 148

Judgement Text

ITA NO.2682/MUM/2019 KHIMCHANDOKCHAND. BHANSALI ASSESSMENT YEAR-2009-10 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.2682/MUM/2019 ( / ASSESSMENT YEAR:2009-10) KHIMCHANDOKCHAND BHANSALI 601/602, SIDDESH JYOTI BALARAM STREET MUMBAI-400 004. / VS. ITO - WARD 19(2)(2) MATRU MANDIR, 2 ND FLOOR, TARDEO ROAD, MUMBAI-400 007. ././PAN/GIR NO. AFZPB-7737-B ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI DHAVAL SHAH-LD. AR / RESPONDENT BY : SHRI R. BHOOPATHI-LD. DR / DATE OF HEARING : 02/09/2020 / DATE OF PRONOUNCEMENT : 02/09/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1.1 AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEA R [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-30, MUMBAI, [IN SHORT REFER RED TO AS CIT(A)], APPEAL NO. CIT(A)-30/19(2)(2)/666/2015-16 DATED 17/08/2018 ON CERTAIN GROUNDS OF APPEAL. THOUGH THE ASSESSEE H AS ITA NO.2682/MUM/2019 KHIMCHANDOKCHAND. BHANSALI ASSESSMENT YEAR-2009-10 RAISED MULTIPLE GROUNDS OF APPEAL, HOWEVER, LD. AUT HORIZED REPRESENTATIVE FOR ASSESSEE, SHRI DHAVAL SHAH, DRAW ING ATTENTION TO GROUND NO.4, PLEADED FOR REDUCTION IN ESTIMATED ADDITION OF 12.5% KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT THE ASSESSEE HAS DE CLARED GROSS PROFIT RATE OF MORE THAN 3% DURING THE YEAR WHICH I S NORMAL PROFIT RATE IN THE ASSESSEES LINE OF BUSINESS. NO OTHER A RGUMENTS HAVE BEEN ADVANCED BEFORE US. PER CONTRA, LD. DR SUBMITT ED THAT THE ASSESSEE REMAINED NEGLIGENT IN ATTENDING THE APPELL ATE PROCEEDINGS BEFORE LD. CIT(A) DESPITE BEING PROVIDE D WITH VARIOUS OPPORTUNITIES OF BEING HEARD. 1.2 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN RE-OPENING OF THE ASSESSME NT U/S. 147 OF THE ACT WHICH IS INVALID AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN PASSING ORDER WITHOUT COMPLYING WITH PRINCIPLES OF NATURAL JUSTICE. 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACC OUNTS AND MAKING ADDITION ON ESTIMATION BASIS. 4. THE LD. CLT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCEOF ALLEGED BOGUS PURCHASES OF RS.14,01, 716/- BEING 12.50% OF RS. 1,12,13,732/- IN THE HANDS OF THE APP ELLANT. 2.1 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND MATERIAL ON RECORD.FACTS AS EMANATING FROM THE RECO RD ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATEDTO BE ENGA GED IN TRADING OF FERROUS AND NON-FERROUS METAL WAS SUBJECTED TO A N ASSESSMENT U/S 143(3) R.W.S. 147 ON 20/03/2015 WHEREIN THE RET URNEDINCOME OF RS.1.91LACS WAS ASSESSED AT RS.15.94 LACS AFTER EST IMATED ITA NO.2682/MUM/2019 KHIMCHANDOKCHAND. BHANSALI ASSESSMENT YEAR-2009-10 ADDITION @12.5% ON CERTAIN ALLEGED BOGUS PURCHASES. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 22/09 /2009 WHICH WAS PROCESSED U/S 143(1). 2.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRAN SPIRED THAT THE ASSESSEE OBTAINED BOGUS PURCHASES BILLS AGGREGATING TO RS.112.13 LACS FROM AS MANY AS 11ENTITIES, THE DETAILS OF WHI CH HAVE ALREADY BEEN EXTRACTED IN PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCE SS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 19/02/2014 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 2.3 ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES BY FURNISHING PURCHASE INVOICES, BANK STATEMENTS EVIDENCING PAYME NT THROUGH BANKING CHANNELS, QUANTITATIVE DETAILS ETC. BUT FAI LED TO PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF TRANSACTIONS. THE ASSESSEE ALSO FAILED TO FURNISH DELIVERY CHALLANS, TRANSPORT RECE IPTS, OCTROI RECEIPTS ETC. TO SUBSTANTIATE THE DELIVERY OF MATERIAL. ACCO RDINGLY, A VIEW WAS TAKEN THAT THE PURCHASES WERE INFLATED TO SUPPRESS THE TRUE PROFITS. FINALLY, LD. AO ESTIMATED AN ADDITION OF 12.5% AGAI NST THESE PURCHASES FOLLOWING THE DECISION OFHONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH 356 ITR 451 AND COMPLETED THE ASSESSMENT. 2.4 ALTHOUGH THE ASSESSEE PREFERRED FURTHERAPPEAL B UT AS IS EVIDENT FROM PARA-4 OF THE IMPUGNED ORDER, IT FAILE D TO MAKE EFFECTIVE REPRESENTATION BEFORE LD. CIT(A). RESULTA NTLY, THE ITA NO.2682/MUM/2019 KHIMCHANDOKCHAND. BHANSALI ASSESSMENT YEAR-2009-10 ASSESSMENT WAS CONFIRMED. THE LEGAL OBJECTION TAKEN BY THE ASSESSEE AGAINST REOPENING THE ASSESSMENT WAS ALSO DISMISSED. AGGRIEVED THE ASSESSEE IS IN FURTHERAPPEAL BEFORE U S. 3. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX AS ENUMERATED IN PRECEDING PARAGRAPHS, IT IS QUITE CLEAR THAT THE AS SESSEE REMAINED NEGLIGENT IN ATTENDING THE APPELLATE PROCEEDINGS DE SPITE BEING PROVIDED WITH VARIOUS OPPORTUNITIES OF BEING HEARD. HOWEVER, KEEPING IN VIEW OF PRINCIPLE OF NATURAL JUSTICE AND KEEPING IN MIND THE FACTS AND CIRCUMSTANCES, WE DEEM ITFIT TO GRANT ANOTHER OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE B EFORE FIRST APPELLATE AUTHORITY. ACCORDINGLY, THE CASE STANDS R EMITTED BACK TO THE FILE OF LD. CIT(A)FOR RE-ADJUDICATION WITH A DI RECTION TO THE ASSESSEE TO DEFEND HIS CASE BEFORE FIRST APPELLATE AUTHORITY FAILING WHICH LD. CIT(A) SHALL BE AT LIBERTY TO ADJUDICATE THE APPEAL ON THE BASIS OF MATERIAL ON RECORD. 4. RESULTANTLY, THE APPEAL STANDS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED ON 02 ND SEPTEMBER, 2020. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) $ %&' / JUDICIAL MEMBER &' / ACCOUNTANT MEMBER MUMBAI; %& DATED : 02/09/2020 SR.PS:-JAISY VARGHESE ITA NO.2682/MUM/2019 KHIMCHANDOKCHAND. BHANSALI ASSESSMENT YEAR-2009-10 ;<=>?@AB? / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. %+ ,%%%- , %- , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.