ITO, Ward - 2(1), Kalyan V. Gul Manoharlal Makhijani, Mumbai

ITA 2762/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4479 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Keywords: Bogus purchase; Unexplained expenditure
• Section: 69C; 143(3); 133(6)

Judgement Text

ITA NO.2762 & 2763/MUM/2019 GUL MANOHARLAL MAKHIJANI ASSESSMENT YEARS: 2009-10 & 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.2762/MUM/2019 ( / ASSESSMENT YEAR: 2009-10) & ./ I.T.A. NO.2763/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER, WARD - 2(1) 2 ND FLOOR, MOHAN PLAZA BLDG WAYLE NAGAR, KHADAKPADA, KALYAN(W)-421 301 / VS. GUL MANOHARLAL MAKHIJANI PROP OF M/S POONAM CONSTRUCTION, 6, RED ROSE SOCIETY OPP-CHOPRA COURT ULHAS NAGAR-421 003 !' ./ ./PAN/GIR NO. AAZPM-5806-H ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI T.S. KHALSA- LD. SR. DR / DATE OF HEARING : 03/02/2021 / DATE OF PRONOUNCEMENT : 03/02/2021 / O R D E R PER BENCH 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEA RS [IN SHORT REFERRED TO AS AY] 2009-10 & 2010-11 CONTEST SEPA RATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY. HOWEVER, THE FAC TS AS WELL AS ISSUES ARE IDENTICAL IN BOTH THE APPEALS AND THEREF ORE, THE APPEALS ITA NO.2762 & 2763/MUM/2019 GUL MANOHARLAL MAKHIJANI ASSESSMENT YEARS: 2009-10 & 2010-11 2 WERE HEARD TOGETHER AND ARE NOW BEING DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE & BREVITY. 2. THE APPEAL FOR ASSESSMENT YEAR (AY) 2009-10 CONT EST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-3, THANE [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. 1007 0-THN/2015-16 DATED 22/02/2019 WHICH HAS RESTRICTED THE ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES TO THE EXTENT OF 12.5%. 3. DURING HEARING, THOUGH NONE APPEARED FOR ASSESSE E BUT THE MATERIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF T HE APPEALS AND THEREFORE, THE MATTER WAS PROCEEDED WITH FOR ADJUDI CATION AFTER HEARING LD. DR, WHO PLEADED FOR RESTORATION OF ADDI TIONS AS MADE BY THE LD. ASSESSING OFFICER (AO) IN AN ASSESSMENT FRAMED U/S 143(3) R.W.S. 147, VIDE ORDER DATED 05/03/2015. THE ASSESSEE BEING RESIDENT INDIVIDUAL IS STATED TO BE ENGAGED I N THE BUSINESS OF CIVIL CONSTRUCTION UNDER PROPRIETARY CONCERN NAMELY M/S. POONAM CONSTRUCTION. 4. PURSUANT TO RECEIPT OF CERTAIN INFORMATION RECEI VED FROM SALES TAX DEPARTMENT, MAHARASHTRA, IT TRANSPIRED THAT THE ASSESSEE MADE AGGREGATE PURCHASES OF RS. 49.72 LACS FROM 9 S USPICIOUS DEALERS, THE DETAILS OF WHOM HAVE ALREADY BEEN EXTR ACTED IN PARA-4 OF THE ASSESSMENT ORDER. ACCORDINGLY, THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. IN DEFENSE, THE ASSESSEE SUBMITTED THAT THE PURCHASES WERE SUPPORTED BY VALI D INVOICES AND THE PAYMENTS WERE THROUGH ACCOUNT CHANNELS. THE LED GER EXTRACTS OF THE SUPPLIERS ALONG WITH THEIR CONFIRMATION OF A CCOUNTS AS WELL AS PERMANENT ACCOUNT NUMBERS WAS ALSO SUBMITTED. HOWEV ER, NOTICES ISSUED U/S 133(6) TO THESE PARTIES WAS RETU RNED BACK ITA NO.2762 & 2763/MUM/2019 GUL MANOHARLAL MAKHIJANI ASSESSMENT YEARS: 2009-10 & 2010-11 3 UNSERVED BY THE POSTAL AUTHORITIES AND THEREFORE, A CONCLUSION WAS DRAWN THAT THE PURCHASES MADE BY THE ASSESSEE FROM THESE SUPPLIERS WERE BOGUS. FINALLY, THESE PURCHASES WERE DISALLOWED AS UNPROVED AND UNEXPLAINED EXPENDITURE WITHIN THE MEA NING OF SECTION 69C OF THE ACT. 5. BEFORE LD. CIT(A), THE ASSESSEE REITERATED THAT THE PURCHASES WERE GENUINE AND DREW ATTENTION TO THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE IN SUPPORT OF THESE TRANS ACTIONS. THE EVIDENCES FURNISHED BY THE ASSESSEE WERE SUBJECT TO REMAND PROCEEDINGS, WHEREIN THE LD. ASSESSING OFFICER REIT ERATED THAT THE NOTICES ISSUED TO THE PARTIES REMAINED UNSERVED BY THE POSTAL AUTHORITIES AND THE ASSESSEE FAILED TO PRODUCE THE PARTIES FOR SUBSTANTIATING THE TRANSACTIONS. AFTER GOING THROUG H THE FACTS OF THE CASE, THE LD. CIT(A) CONCLUDED THAT IT WAS A CASE, WHERE THE GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN PERSONS WHO HAD ISSUED THE BILLS FOR SUCH GOODS. THE GOODS MUST HAVE BEEN PURCHASED FROM GREY MARKET AND THEREFORE, THE CHANCES OF PURC HASES COST BEING INFLATED COULD NOT BE RULED OUT. THEREFORE, L D. AO WAS DIRECTED TO RESTRICT THE ADDITIONS TO THE EXTENT OF 12.5% OF THESE PURCHASES AS HELD IN NUMEROUS DECISIONS OF THE TRIB UNAL. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 6. AFTER DUE CONSIDERATION OF FACTUAL MATRIX AS ENU MERATED IN THE PRECEDING PARAGRAPHS, IT IS QUITE EVIDENT THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WHICH WOULD REQUIRE CONSUMPTION OF MATERIAL. THE PURCHASE TRANSACTIONS CARRIED OUT BY THE ASSESSEE WITH SUSPICIOUS SUPPLIERS WERE EVIDENC ED BY COPIES OF INVOICES AND THE PAYMENTS WERE THROUGH BANKING C HANNELS. THE ITA NO.2762 & 2763/MUM/2019 GUL MANOHARLAL MAKHIJANI ASSESSMENT YEARS: 2009-10 & 2010-11 4 CONFIRMATION OF ACCOUNTS AS WELL AS PAN OF THE SUPP LIERS WAS DULY FURNISHED. THE SALES TURNOVER ACHIEVED BY THE ASSES SEE WAS NOT DISPUTED BY LD. AO. AT THE SAME TIME, THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF AC COUNTS AND NOTICES ISSUED U/S 133(6) DID NOT ELICIT SATISFACTO RY RESPONSE. THEREFORE, IT WAS A FIT CASE FOR ESTIMATION OF ADDI TIONS ON THESE SUSPICIOUS PURCHASES. IN OUR CONSIDERED OPINION, LD .CIT(A) HAS CLINCHED THE ISSUE IN THE CORRECT PERSPECTIVE. THE ESTIMATION OF 12.5% WAS QUIET FAIR AND REASONABLE AND THE SAME DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. THEREFORE, BY CONFIRM ING THE STAND OF LD. CIT(A), WE DISMISS THE APPEAL. 7. FACTS AS WELL AS ISSUES ARE PARI-MATERIA THE SAM E IN AY 2010-11 WHEREIN THE ASSESSEE WAS SADDLED WITH ADDIT IONS OF RS.96.98 LACS ON ACCOUNT OF SUSPICIOUS PURCHASES. T HE LD. CIT(A) RESTRICTED THE SAME TO 12.5% APPLYING SIMILAR REASO NING AND LOGIC. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US WITH IDENTICAL GROUNDS. SINCE, THE FACTS AS WELL AS ISSUES ARE IDE NTICAL AS IN AY 2009-10, APPLYING ADJUDICATION OF THAT YEAR, WE DIS MISS THIS APPEAL ALSO. 8. FINALLY, BOTH THE APPEALS STANDS DISMISSED. ORDER PRONOUNCED ON 03 RD FEBRUARY, 2021. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 03/02/2021 SR.PS, KASARLA THIRUMALESH ITA NO.2762 & 2763/MUM/2019 GUL MANOHARLAL MAKHIJANI ASSESSMENT YEARS: 2009-10 & 2010-11 5 / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./% ( 0 , 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.