VIKAS SALES CORPORATON, THANE V. ITO WD 3(4), THANE

ITA 2764/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9684 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO.2764/M/2017 VIKAS SALES CORPORATION ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 2764/MUM/2017 ( / ASSESSMENT YEAR: 2010-11) VIKAS SALES CORPORATION FLAT NO.2003, 20 TH FLOOR BUILDING NO.3 STEPPES VASANT LAWNS NEAR JUPITER HOSPITAL MAJIWADA, THANE(W) THANE / VS. INCOME TAX OFFICER WARD 3(4) 6 TH FLOOR, ASHAR IT PARK ROAD NO.16Z WAGLE INDUSTRIAL ESTATE THANE(W) THANE- 400 604 ./ ./PAN/GIR NO. AAHFV-0783-C ( ! /APPELLANT ) : ( '#! / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 06/09/2017 / DATE OF PRONOUNCEMENT : 08 /09/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILS THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX ITA NO.2764/M/2017 VIKAS SALES CORPORATION ASSESSMENT YEAR 2010-11 2 (APPEALS)- 2 [CIT(A)], THANE DATED 31/01/2017 QUA CONFIRMATION OF ADDITION OF 12.5% AGAINST CERTAIN BOGUS PURCHASES. NONE HAS APPEARED ON BEHALF OF ASSESSEE DESPITE NOTICE. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAIL ABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT FIRM ENGAGED IN TRADING OF IRON & STEEL WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 17/ 03/2015 AT RS.71,43,960/- AFTER CERTAIN ADDITION OF BOGUS PURCHASES FOR RS.67,38,594/-. THE ORIGINAL RETURN WAS E-FILED ON 20/08/2010 AT RS.4,05,370/- WHICH WAS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASES BILLS AND IT W AS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE B ILLS TO THE TUNE OF RS.5,39,08,754/- FROM THREE PARTIES. CONSEQUENTLY, NOTICE U/S 148 DATED 05/04/2013 WAS ISSUED TO THE ASSESSEE WHICH WAS FOL LOWED BY REQUISITE STATUTORY NOTICES U/S 143(2) & 142(1). THE ASSESSEE REFLECTED GP RATE OF 3.27% AGAINST TURNOVER OF RS.14.37 CRORES. 2.3 THE ASSESSEE, IN SUPPORT OF PURCHASE TRANSACTIO NS, PRODUCED COPY OF INVOICES AND SOME OCTROI RECEIPTS ETC. AND CONTENDED THAT THE PURCHASES WERE GENUINE. HOWEVER, NOTICES U/S 133(6) SENT TO CONFIRM THE TRANSACTIONS REVEALED THAT THE PARTIES WERE NON -EXISTENT AT THE GIVEN ADDRESSEES, WHICH LED THE LD. AO TO DISBELIEVE THE SAID TRANSACTIONS. FINALLY, PLACING RELIANCE ON SEVERAL JUDICIAL PRONO UNCEMENTS, THE ADDITION ITA NO.2764/M/2017 VIKAS SALES CORPORATION ASSESSMENT YEAR 2010-11 3 ON ACCOUNT OF BOGUS PURCHASES WAS ESTIMATED AT 12.5% AND ADDED TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 31/01/2 017 WHERE THE STAND OF LD. AO WAS CONFIRMED AFTER APPRECIATING SE VERAL JUDICIAL PRONOUNCEMENTS ON THE ISSUE AND THE GP RATE REFLECTED BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN FURTHER AP PEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] DREW OU R ATTENTION TO THE FACT THAT NONE OF THE PARTY WAS FOUND AT THE GI VEN ADDRESSEE AND THE ASSESSEE COULD NOT PRODUCE ANY PARTY FOR CONFIRMATI ON OF THE ACCOUNT AND HENCE, THE ESTIMATION OF INCOME @12.5% WAS QUIT E FAIR & REASONABLE. 5. WE HAVE HEARD THE CONTENTIONS AND PERUSED RELEVA NT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL KEEPING IN VIEW THE AS SESSEES NATURE OF BUSINESS WHICH WAS TRADING. THE SALES TURNOVER ACHI EVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND T HE PAYMENTS WERE THROUGH BANKING CHANNELS. THE PURCHASES WERE BACKED BY INVOICES AND OTHER EVIDENCES & QUANTITATIVE DETAILS WERE AVAILAB LE ON RECORD. AT THE SAME TIME, NOTICES ISSUED U/S 133(6) REVEALED THAT NONE OF THE PARTY EXISTED AT THE GIVEN ADDRESS AND THE ASSESSEE COULD NOT PRODUCE ANY OF THE PARTY FOR CONFIRMATION OF THE TRANSACTIONS, WHI CH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION , THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EM BEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEME NT EARNED BY ASSESSEE ITA NO.2764/M/2017 VIKAS SALES CORPORATION ASSESSMENT YEAR 2010-11 4 AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. C IT(A) HAS RIGHTLY DONE. THEREFORE, FINDING THE SAME QUITE FAIR AND RE ASONABLE, WE SEE NO REASON TO INTERFERE WITH THE SAME. 6. RESULTANTLY THE ASSESSEES APPEAL STANDS DISMISS ED . ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH SEPTEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08 . 09.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. '%- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI