ITO, Ward - 2(4), Ambernath V. M/s Shree Balaji Processors, Kalyan

ITA 2764/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1937 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH RAI
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2764 / / 2019 (%. .2009-10 ) ITA NO. 2764/MUM/2019 (A.Y.2009-10) ITO,WARD 2(4), 2 ND FLOOR, MOHAN PLAZA BLDG., WAYLE NAGAR, KHADAKPADA, KALYAN WEST 421 301. / VS. : / APPELLANT M/S. SHREE BALAJI PROCESSORS, PLOT NO.B 21, INDUSTRIAL AREA, ANAND NAGAR, ADDITIONAL AMBERNATH 421 503 PAN: AAWFS4196D : / RESPONDENT REVENUE BY : SHRI SAURABH RAI ASSESSEE BY : NONE / DATE OF HEARING : 29/10/2020 / DATE OF PRONOUNCEMENT : 23/11/2020 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-3, THANE (IN S HORT THE CIT(A)) DATED 22/02/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS RUNNING WHEAT FLOUR MILL. ON THE BASIS OF INFOR MATION RECEIVED FROM SALES 2 ITA NO. 2764/MUM/2019 (A.Y.2009-10) TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM ENTRY PROVID ERS, REASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE FOR ASSESSMEN T YEAR 2009-10 WERE INITIATED. IN REASSESSMENT PROCEEDINGS, THE ASSES SING OFFICER MADE ADDITION OF RS.3,68,290/- ON ACCOUNT OF BOGUS PURCHASES MADE FR OM SUPREME ENTERPRISES, A DECLARED HAWALA DEALER. AGGRIEVED BY THE ASSESSM ENT ORDER DATED 16/03/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APP EAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS OF THE CASE AND AF TER SEEKING REMAND REPORT FROM THE ASSESSING OFFICER RESTRICTED THE ADDITION TO RS.46,036/- BY ESTIMATING G.P @ 12.5% ON BOGUS PURCHASES. AGAINST THE RELI EF GRANTED BY THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SAURABH RAI, REPRESENTING THE DEPARTMENT SUBMITTED THAT THOUGH THE APPEAL OF REVENUE IS BELOW THE MONETARY LI MIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CASE OF AS SESSEE FALLS UNDER EXCEPTION SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES, HENCE, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDIT ION OF ENTIRE BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE P RAYED FOR UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER. 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD. ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IS RUN NING A WHEAT FLOUR MILL. THE SALES MADE BY THE ASSESSEE HAVE NOT BEEN DISPUT ED BY THE DEPARTMENT. WITHOUT PURCHASES THERE CANNOT BE SALES. OSTENSIBL Y, THE ASSESSEE HAS BEEN MAKING PURCHASES FROM GREY MARKET AND OBTAINED CO RRESPONDING BOGUS PURCHASE BILLS FROM ENTRY PROVIDERS. IN SUCH TYPE OF BOGUS TRANSACTION IT IS ONLY PROFIT ELEMENT EMBEDDED IN THE TRANSACTION TH AT HAS TO BE BROUGHT TO TAX. 3 ITA NO. 2764/MUM/2019 (A.Y.2009-10) I CONCUR WITH THE FINDING OF CIT(A) THAT ENTIRE A MOUNT OF BOGUS PURCHASES CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE AND SO ME REASONABLE ESTIMATION OF G.P ON SUCH BOGUS PURCHASES HAS TO BE MADE. THE IMPUGNED ORDER IS FAIR AND REASONABLE, I SEE NO REASON TO INTERFERE WITH THE SAME. THE APPEAL OF THE REVENUE IS WITHOUT ANY MERIT, THEREF ORE, THE SAME IS DISMISSED. 5. NO APPEAL/CROSS OBJECTIONS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) HAS BEEN BROUGHT TO THE NOTICE OF BENCH. IN CASE AT LATER POINT ANY APPEAL/CROSS OBJECTIONS BY THE ASSESSEE AGAINST IMP UGNED ORDER OF CIT(A) IS FOUND, THEN THIS ORDER MAY BE RECALLED AND THE CROS S APPEALS MAY BE LISTED TOGETHER FOR DISPOSAL BY A COMMON ORDER. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON MONDAY THE 23RD DAY OF N OVEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 23/11/2020 VM , SR. PS(O/S) 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