PRAVEEN KUMAR GUPTA, MUMBAI V. ITO 20(2)(5), MUMBAI

ITA 2692/MUM/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9352 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHREEKALA PARDESHAI
• Assessee Lawyers: N O N E
• Keywords: Reopening of assessment; Bogus purchase
• Section: 143(3); 133(6); 147; 148

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , . . , BEFORE S H RI VIKAS AWASTHY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN , ACCOUNTANT MEMBER ./ ITA NO. 2692 / MUM/ 2019 ( / ASSESSMENT YEAR 2011 - 12 ) PRAVEEN KUMAR GUPTA SHOP NO.228, MOTIWAL MANSION, MAULANA AZAD ROAD, MUMBA I - 400 008 / VS. THE INCOME TAX OFFICER WARD 20(2)(5), R. NO.208, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400 012 ( / APPELLANT) ( / RESPONDENT) . / PAN NO. AACPG 3961 A / APPELLANT BY : N ONE / RESPONDENT BY : MS. SHREEKALA PARDESHAI, DR / DATE OF HEARING: 2 1 .1 2 . 2020 / DATE OF PRONOUNCEMENT: 30 .12 .2020 / O R D E R , PER VIKAS AWASTHY , J M : THIS APPEAL BY THE IS DIRECTED AGAINST THE ORDER OF COMMIS SIONER OF INCOME TAX (APPEALS) - 32 , MUMBAI (IN SHORT THE CIT(A)) DATED 06.03.2019 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE NOTICE OF HEARING OF THIS APPEAL WAS SENT TO THE ASSESSEE THROUGH RPAD. TH E NOTICE HAS BEEN RECEIVED BACK UNSERVED WITH POSTAL REMARKS LEFT . THE NOTICE WAS SENT TO THE ASSESSEE ON THE ADDRESS PAGE | 2 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 MENTIONED IN FORM NO.36 FILED BY THE ASSESSEE. THE ASSESSEE HAS NOT FILED ANY REVISE D FORM 36, INTIMATING NEW / FRESH ADDRESS. THE NOTICE OF HEARING OF THE APPEAL WERE EARLIER SENT TO THE ASSESSEE THROUGH RPAD FOR HEARING FIXED ON 29.04.2020 AND 05.11.2020 AS PER FILE THE SAME HAVE NOT BEEN RECEIVED BACK UNSERVED THEREFORE DEEMED TO BE SERVED. IT SEEMS, THE ASSESSEE IS NOT INTERESTED IN PUR SUING THE APPEAL. ACCORDINGLY, THE SAME IS DECIDED ON THE BASIS OF DOCUMENTS ON RECORD AND THE SUBMISSIONS MADE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3. MS. SHREEKALA PARDESHAI , RE PRESENTING THE REVENUE SUBMITTED THAT THE REVENUE HAD ALSO FILED CROSS A PPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2011 - 12 IN ITA NO. 3699/MUM/2019. THE APPEAL OF REVENUE WAS HEARD BY C BENCH ON 02.11.2020. AT THE TIME OF HEARING OF APPEAL BY THE REVENUE, THE DEPARTMENT WAS NOT AWARE OF THE CR OSS APPEAL FILED BY THE ASSESSEE AGAINST THE SAME ORDER OF CIT(A). THEREFORE, ONLY APPEAL OF THE REVENUE WAS HEARD. THE LEARNED DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE TRIBUNAL VIDE ORDER DATED 14.12.2020 HAS DISMISSED THE APPEAL OF REVENUE UPHOLDIN G THE FINDINGS OF CIT(A). 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS A PROPRIETOR OF M/S HARYANA STEEL INTERNATIONAL AND IS ENGAGED IN TRADING OF IRO N AND STEEL SHEETS ETC. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 21.09.2011 DECLARING TOTAL INCOME OF 3,47,560/ - . THE RETURN PAGE | 3 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143( 1 ) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER THE ACT) . THEREAFTER, ON THE BASIS OF THE INFORMATION RECEIVED BY DGIT INVESTIGATION, MUMBAI FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHT RA, THE ASSESSMENT FOR ASSESSMENT YEAR 2011 - 12 WAS REOPENED UNDER SECTION 148 READ WITH SECTION 147 OF THE ACT. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO 16, 00 , 59 ,300/ - FROM M/S MIRU ENTERPRISES, A DECLAR ED HAWALA OPERATOR. THE ASSESSING OFFICER ESTIMATED GP AT THE RATE OF 12.5% ON THE BOGUS PURCHASES AND MADE ADDITION OF 2 ,00,07,413 / - . AGGRIEVED, BY THE ASSESSMENT ORDER DATED 07.11.2016 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGING VALIDITY OF REOPENING , AS WELL AS , ADDITION ON MERITS. THE CIT(A) UPHELD THE VALIDITY OF REOPENING. SO FAR AS ON MERITS OF THE ADDITION , THE CIT(A) FOLLOWED THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 853/MUM/2017 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 30.08.2017 AND RESTRICTED THE ADDITION TO 73,62,728/ - BY APPLYING THE RATE OF 4.6% . STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL A SSAILING THE FINDINGS OF CIT(A) UPHOLDING VALIDITY OF REOPENING AND THE EXTENT OF ADDITION SUSTAINED QUA BOGUS PURCHASES. 5. A PERUSAL OF THE ASSESSMEN T ORDER SHOWS THAT THE ASSESSEE IN ORDER TO PROVE GENUINENESS OF PURCHASES HAD PRODUCED PURCHASE AND SALE INVOICES, LEDGER ACCOUNTS, UNSIGNED DELIVERY CHALLANS AND THE AFFIDAVIT FROM THE PROPRIETOR OF M/S MIRA ENTERPRISES ADMITTING THAT HE HAD ISSUED BOGUS PURCHASE BILLS TO SOME PARTIES, HOWEVER AS PER THE AFFIDAVIT, THE TRANSACTIONS WITH THE ASSESSEE WERE STATED TO BE PAGE | 4 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 GENUINE. HOWEVER, DOCUMENTS TO PROVE TRAIL OF GOODS SUCH AS , PURCHASE REGISTER, LORRY RECEIPTS, TRANSPORTATION DETAILS, ETC. WERE NOT FURNISHED B Y THE ASSESSEE. THE ASSESSING OFFICER IN ORDER TO VERIFY GENUINENESS OF THE TRANSACTION ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO M/S MIRU ENTERPRISES AND DIRECTED TO PRODUCE SALES BILLS. NEITHER THE SAID SUPPLIER APPEARED BEFORE THE ASSESSING OFFIC ER NOR ANY DOCUMENTS WERE FURNISHED BY HIM TO SUPPORT ASSESSEES CLAIM. THUS, THE ASSESSEE COULD NOT PROVE GENUINENESS OF PURCHASE S MADE FROM M/S MIRU ENTERPRISES IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. 6. WE OBSERVE THAT IN ASSESSMENT YE AR 2010 - 11, ADDITION ON ACCOUNT OF BOGUS PURCHASES WERE MADE IN THE HANDS OF THE ASSESSEE FOR SIMILAR REASONS. IN ASSESSMENT YEAR 2010 - 11, THE A SSESSEE HAD PURPORTEDLY MADE BOGUS PURCHASE TRANSACTION S WITH M/S MIRU ENTERPRISES. THE ASSESSING OFFICER MADE A DDITION BY ESTIMATING GP AT 12.5% ON BOGUS PURCHASES . IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE ADDITION TO 4.60% . THE REVENUE CARRIED THE ISSUE IN APPEAL BEFORE THE TRIBUNAL IN ITA NO. 853/MUM/2017 (SUPRA) . THE TRIBUNAL UPHELD THE FINDINGS OF CIT(A) . FOR THE SAKE OF COMPLETENESS, THE RELEVANT EXTRACT OF THE FINDINGS OF THE CO - ORDINATE BENCH ARE REPRODUCED HEREIN BELOW: - 7. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE AFORESAID FACT, THE ESTIMATION OF THE PROFIT ELEM ENT ON THE PURCHASE OF THE STEEL SHEETS BY THE ASSESSEE FROM THE OPEN/GREY MARKET WOULD FAIRLY BE COVERED BY THE RATE OF 4.60% ADOPTED BY THE CIT(A). WE THUS FIND OURSELVES PAGE | 5 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 TO BE IN AGREEMENT WITH THE ADDITION SUSTAINED BY THE CIT(A), AND FIND NO REASON TO DISLODGE THE SAME. WE THUS UPHOLD THE ORDER OF THE CIT(A). 7. THE CIT(A) IN IMPUGNED ORDER HAS FOLLOWED THE ABOVE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2010 - 11 AND RESTRICTED THE ADDITION TO 4.60%. THE CO - ORDINATE BENCH OF THE TRIBUNAL WHILE DECIDING THE APPEAL OF REVENUE FOR THE IMPUGNED ASSESSMENT YEAR (I.E. ASSESSMENT YEAR 2011 - 12 ) IN ITA NO.3699/MUM/2019 (SUPRA) HAS UPHELD THE FINDINGS OF THE CIT(A). THE RELEVANT EXTRACT OF THE ORDER OF THE TRIBUNAL IN CROSS APPEAL FILED BY THE DEPARTMENT FOR THE S AME ASSESSMENT YEAR IS AS UNDER: - 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2010 - 11 IN ITA NO.853 /MUM/2017 WHEREIN A GP RATE OF 4.6% HAS BEEN APPLIED THEREBY SUSTAINING THE ADDITION OF 73,62,728/ - AS AGAINST 2,00,07,413/ - MADE BY THE AO. WE OBSERVE THAT LD. CIT(A) HAS FOLLOWED THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES O WN CASE IN ASSESSMENT YEAR 2010 - 11 AND THEREFORE, THERE IS NO SCOPE FOR INFERENCE IN THE ORDER PASSED BY LD. CIT(A). CONSEQUENTLY, WE ARE INCLINED TO DISMISS THE APPEAL OF THE REVENUE BY UPHOLDING THE ORDER OF LD. CIT(A). 8. THE CIT(A) HAS RESTRICTED THE ADD ITION BY APPLYING GP RATE OF 4.60% IN LINE WITH THE ORDER OF T RIBUNAL IN ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING ASSESSMENT YEAR. WE SEE NO REASON TO TAKE A DIFFERENT VIEW. CONSEQUENTLY, THE GROUND NO. 2 RAISED IN THE APPEAL BY ASSESSEE ASSAILING THE ADDITION BY ADOPTING GP RATE OF 4.6% IS DISMISSED. PAGE | 6 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 9. THE ASSESSEE IN GROUND NO.1 HAS ASSAILED REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT. WE FIND THAT THE ASSESSEE HAS RAISED A GROUND CHALLENGING REOPENING BEFORE THE CIT(A). THE CIT(A) S HAS PASS ED A REASONED ORDER IN DISMISSING THE GROUND AGAINST REOPENING OF ASSESSMENT. WE CONCUR WITH THE FINDINGS OF THE CIT(A) . WE FURTHER OBSERVE THAT IN IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2010 - 11, THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHA SE BILLS FROM THE SAME HAWALA DEALER I.E. MIRU ENTERPRISES. THE ASSESSEE ACCEPTED THE VALIDITY OF REOPENING IN ASSESSMENT YEAR 2010 - 11, THE FACTS IN THE IMPUGNED ASSESSMENT YEAR ARE IDENTICAL EXCEPT FOR THE QUANTUM OF BOGU S PURCHASES. WE FIND NO INFIRMITY IN THE FINDINGS OF CIT(A) ON THE ISSUE . ACCORDINGLY, THE GROUND NO.1 OF THE APPEAL BY ASSESSEE IS DISMISSED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY THE 30 TH DAY OF DECEMBER, 2020. SD/ - SD/ - ( . . / N.K. PRADHAN) ( / VIKAS AWASTHY) ( / ACCOUNTANT MEMBER) ( / JUDICIAL MEMBER) , / MUMBAI, DATED: 30.12 .2020 , . / SUDIP SARKAR, SR.PS PAGE | 7 ITA NO. 2692/MUM/2019 PRAVEEN KUMAR GUPTA; AY 11 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FI LE. / BY ORDER, //TRUE COPY// / (ASSTT. REGISTRAR) , / ITAT, MUMBAI