ANIL PRTAMDAS HOTCHANDNI, ULHASNAGAR V. ITO WD 2(1), KALYAN

ITA 2806/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9805 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase
• Section: 133(6); 148

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 2806 /MUM/ 2 017 (ASSESSMENT YEAR 20 09 - 10 ) SHRI ANIL PRITAMDAS HOTCHANDANI GROUND FLOOR, DUKES HOUSE NEAR MADHUSUDHAN ASHRAM JAI MATA DI NAGAR ULHASNAGAR - 4210 03. PAN NO. AAIPH1777M VS. ITO WARD 2(1) 2 ND FLOOR MOHAN PLAZA WAYALE NAGAR KHADAKPADA KALYAN WEST ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY MS. NEHA PARANJPE DEPARTMENT BY MS. N. HEMALATHA DATE OF HEARING 2 3 . 8 . 201 7 DATE OF PRONOUNCEMENT 23 . 8 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01.03.2017 PASSED BY THE LEARNED CIT(A) - 3, THANE AND IT RELATES TO A.Y. 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN CONFIRMING THE D ISALLOWANCE OF ` 30.49 LAKHS MADE BY THE ASSESSING OFFICER RELATING TO BOGUS PURCHASES MADE FROM M/S PIONEER TRADING COMPANY. 2. THE ASSESSEE IS A DEALER IN STEEL AND BUILDING MATERIALS. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT CERTAIN DEALERS ARE INDULGING IN PROVIDING ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING MATERIALS AND UPON NOTICING THAT THE ASSESSEE HAS PURCHASED GOODS WORTH ` 30.49 LAKHS FROM ONE OF SUCH HAWALA DEALERS NAMED M/S. PIONEER TRADING CO., THE ASSESS ING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S. 148 OF THE ACT. IN THE REOPENED ASSESSMENT, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH ALL RELEVANT DETAILS TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSESSEE FURNISHED COPY OF PURCHA SE BILLS, LEDGER ACCOUNT COPY OF SUPPLIER AND DETAILS OF PAYMENTS. THE ASSESSING OFFICER ISSUED NOTICE U/S. 133(6) OF THE ACT TO THE SUPPLIER, BUT IT WAS RETURNED UN - SERVED. HENCE, THE ASSESSING OFFICER SHRI ANIL PRITAMDAS HOTCHANDANI 2 DISALLOWED ENTIRE PURCHASE AMOUNT OF ` 30.49 LAKHS B Y TREATING THE SAME AS NON - GENUINE PURCHASES. IN THE APPELLATE PROCEEDINGS, THE LEARNED CIT(A) CONFIRMED THE ADDITION. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 4. LEARNED AR SUBMITTED THAT THE ASSESSEE HAS FURNISHED DETAILS OF PU RCHASES AT PAGE NO. 39 OF THE PAPER BOOK AND DETAILS OF SALES MADE OUT OF THOSE PURCHASE IN PAGE NO.54 OF THE PAPER BOOK. ACCORDINGLY, LEARNED AR SUBMITTED THAT THE TAX AUTHORITIES WERE NOT JUSTIFIED IN CONFIRMING THE ENTIRE AMOUNT OF PURCHASES WHEN THE AS SESSEE HAS PROVED THAT IT HAS SOLD THE GOODS. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE EVIDENCES TO PROVE THE PURCHASES AND ALSO SHOWN THAT THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNELS. 5. LEARNED DEPARTMENTAL REPRESENT ATIVE, ON THE CONTRARY, SUBMITTED THAT THE LEARNED CIT(A) HAS GIVEN PROPER REASONING FOR CONFIRMING THE ADDITION. SHE SUBMITTED THAT THE NOTICE ISSUED BY THE AO U/S 133(6) OF THE ACT HAS BEEN RETURNED BACK UN - SERVED. THE ASSESSEE COULD NOT PRODUCE THE SU PPLIER BEFORE THE AO. ACCORDINGLY, SHE SUBMITTED THAT ENTIRE ADDITION HAS BEEN RIGHTLY SUSTAINED BY LD CIT(A). 6. I HAVE HEARD THE PARTIES AND PERUSED THE RECORD. I NOTICED THAT THE ASSESSEE HAS FURNISHED COPIES OF PURCHASE BILLS AND PAYMENT DETAILS. TH E ASSESSEE HAS, HOWEVER, FAILED TO FURNISH ANY PROOF TO SHOW THAT THE MATERIALS WERE PHYSICALLY TRANSPORTED TO THE PREMISES OF THE ASSESSEE. THE LEARNED AR ALSO FAIRLY CONCEDED THAT THE ASSESSEE DOES NOT HAVE COPIES OF TRANSPORT BILLS. SINCE THE ASSESSEE H AS RECONCILED THE PURCHASE AND SALES, IN MY VIEW, ONLY THE PROFIT ELEMENT EMBEDDED IN THE PURCHASE SHOULD BE ASSESSED TO TAX, AS GOODS CANNOT BE SOLD WITHOUT MAKING CORRESPONDING PURCHASES. SINCE THE ABOVE SAID SUPPLIER HAS BEEN NAMED AS A HAWALA DEALER A ND SINCE THE ASSESSEE COULD NOT PRODUCE THOSE PARTY BEFORE THE AO, ONE OF THE POSSIBLE VIEWS IS THAT THE ASSESSEE SHOULD HAVE SOURCED THE MATERIAL FROM SOME OTHER PERSON. SHRI ANIL PRITAMDAS HOTCHANDANI 3 7. WHEN THE ABOVE ASPECTS WERE POINTED OUT TO LEARNED AR, HE SUBMITTED THAT THE VAT RATE APPLICABLE TO THE ITEM DEALT WITH BY THE ASSESSEE IS 4%. ACCORDINGLY SHE SUBMITTED THAT THE PROFIT MAY BE ESTIMATED ON A REASONABLE BASIS. CONSIDERING THIS FACT AND ALSO CONSIDERING THE FACT THAT THE ASSESSEE SHOULD HAVE SOURCED THE MATERIAL AT L OWER RATE, I AM OF THE VIEW THAT THE ADDITION CAN BE SUSTAINED TO THE EXTENT OF 12.50% OF THE VALUE OF ALLEGED BOGUS PURCHASES. ACCORDINGLY I SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO SUSTAIN THE ADDITION TO THE EXTENT OF 12.50% OF THE ALLEGED BOGUS PURCHASES MADE FROM M/S. PIONEER TRADING CO. I ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 3 . 8 . 201 7. SD/ - (B.R.BASKA RAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 2 3 / 8 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI