SHRI NAJMUL HASAN CHOUDHARI, MUMBAI V. ITO, 26 (2)(3), MUMBAI

ITA 2870/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1165 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase
• Section: 142(1); 133(6); 143(1); 143(2); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2870 -2871 / / 2019 (%. .2010-11 2011-12 ) ITA NO. 2870-2871/MUM/2019 (A.Y.2010-11 2011-12) SHRI NAJMUL HASAN CHOUDHARI, 1 ST LANE, TAR GALLI, JARI MARI, ANDHERI KURLA ROAD, SAKINAKA, MUMBAI 400 072 PAN:ADGPC8816R / VS. : / APPELLANT INCOME TAX OFFICER 26(2)(3), C-12, ROOM NO.603, 6 TH FLOOR, PRATYAKSHA KAR BHAVAN, BKC, BANDRA (E), MUMBAI 400 051. : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH / DATE OF HEARING : 12/10/2020 / DATE OF PRONOUNCEMENT : 14/12/2020 / ORDER THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-38, MUMBAI (IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, RESPE CTIVELY. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 28/11/2018. SINCE THE ISSUE INVOLVED IN BOTH THESE APPEALS IS IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OFF BY THIS COMMON ORDER. 2 ITA NO. 2870-2871/MUM/2019 (A.Y.2010-11 2011-12) ITA NO.2870/MUM/2029, A.Y. 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASS ESSMENT YEAR DECLARING TOTAL INCOME OF RS.4,78,360/-. THE RETURN OF THE A SSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHO RT THE ACT). ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOV ERNMENT OF MAHARASHTRA BY DGIT(INVESTIGATION), MUMBAI THE ASSESSMENT FOR A SSESSMENT YEAR 2010-11 IN THE CASE OF ASSESSEE WAS REOPENED. AS PER INFO RMATION RECEIVED ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS FROM VARIOUS DEC LARED HAWALA DEALERS AGGREGATING TO RS.1,64,17,512/-. NOTICE UNDER SECT ION 148 OF THE ACT DATED 03/03/2015 WAS SERVED ON THE ASSESSEE. THE ASSESSE E FAILED TO RESPOND TO THE NOTICE. NO RETURN IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT WAS FILED BY THE ASSESSEE. HENCE, ASSESSING OFFICER C OMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE ACT. THE ASSESSING OFFICE R IN ORDER TO VERIFY GENUINENESS OF THE PURCHASES ISSUED NOTICES UNDER S ECTION 133(6) TO THE ALLEGED SUPPLIERS OF THE GOODS TO THE ASSESSEE. TH E SAID NOTICES WERE RECEIVED BACK UNSERVED WITH REMARKS LEFT OR UNKNOWN. TH E ASSESSING OFFICER MADE ADDITION OF RS.20,52,189/- I.E. 12.5% OF NON-GENUIN E PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 12/02/2016 THE ASSESSEE FILED APPEAL BEFORE CIT(A). BEFORE THE CIT(A) AGAIN THE ASSESSEE OR THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAILED TO APPEAR. THE CIT(A) U PHELD THE ASSESSMENT ORDER AND DISMISSED THE APPEAL OF THE ASSESSEE IN EX-PART E PROCEEDINGS. HENCE, PRESENT APPEAL HAS BEEN INITIATED BY THE ASSESSE E. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE REVENU E VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PUR CHASES AND THE SUPPLIERS OF 3 ITA NO. 2870-2871/MUM/2019 (A.Y.2010-11 2011-12) THE GOODS. THE NOTICES SENT TO THE SUPPLIERS WERE RECEIVED BACK UNSERVED. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER CONTEND ED THAT THE ASSESSING OFFICER / CIT(A) IN A FAIR MANNER HAS RESTRICTED TH E DISALLOWANCE ON BOGUS PURCHASES TO 12.5% OF SUCH PURCHASES. THE LD. DEPA RTMENTAL REPRESENTATIVE PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE . 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. A PERUSAL OF THE ASS ESSMENT ORDER AND THE ORDER OF THE CIT(A) REVEAL THAT THE ASSESSEE HAS NO T CO-OPERATED WITH THE AUTHORITIES BELOW. DESPITE SERVICE OF NOTICE UNDER SECTION 148 OF THE ACT AND SUBSEQUENT NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT, THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE ASSESSING OFFICER. THEREAFTER, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE FOR LEVY OF PENAL TY UNDER SECTION 271(1)(B) OF THE ACT. THE ASSESSEE EVEN FAILED TO RESPOND TO PENALTY NOTICE. CONSEQUENTLY, PENALTY UNDER SECTION 271(1)(B) OF T HE ACT WAS LEVIED VIDE ORDER DATED 15/01/2016. SINCE THE ASSESSEE FAILED TO RE SPOND TO THE STATUTORY NOTICES ISSUED BY ASSESSING OFFICER FROM TIME TO TI ME, THE ASSESSING OFFICER WAS CONSTRAINED TO INVOKE THE PROVISIONS OF SECTION 144 OF THE ACT AND COMPLETE ASSESSMENT IN AN EX-PARTE PROCEEDINGS. THEREAFTER, IN FIRST APPELLATE PROCEEDINGS THE ASSESSEE AGAIN FAILED TO APPEAR BEF ORE THE CIT(A) DESPITE SERVICE OF NOTICES. A PERUSAL OF PARA-3 OF THE IMP UGNED ORDER WOULD SHOW THAT FOUR NOTICES WERE ISSUED TO THE ASSESSEE ON DIFFERE NT DATES I.E. 10/07/2018, 15/10/2018, 29/10/2018 AND 15/11/2018. THE ASSESSE E DID NOT RESPOND TO ANY OF THE NOTICES AND FAILED TO ATTEND THE PROCEED INGS BEFORE CIT(A). THE CONDUCT OF THE ASSESSEE SHOWS THAT THE ASSESSEE IS RECALCITRANT AND HAS NO RESPECT FOR THE STATUTORY AUTHORITIES. 4 ITA NO. 2870-2871/MUM/2019 (A.Y.2010-11 2011-12) THE CONDUCT OF ASSESSEE BEFORE THE TRIBUNAL IS NO BETTER. THE ASSESSEE HAS FAILED TO APPEAR DESPITE SERVICE OF NOTICES. T HE NOTICES WERE SENT TO THE ASSESSEE THROUGH RPAD ON THE ADDRESS MENTIONED IN F ORM NO.36. HOWEVER, ASSESSEE HAS NOT RESPONDED TO ANY OF THE NOTICES. IT SEEMS THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. THE CONDUCT OF THE ASSESSEE IN NOT SHOWING RESPECT FOR STATUTORY AUTHORITIES IS DEPREC IABLE. 5. THE ASSESSEE IS A TRADER. INFORMATION WAS RECEIV ED FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS FROM THE FOLLOWING PARTIES: NAME OF THE PARTY AMOUNT (RS.) SIDDHIVINAYAK STEEL 52,31,761 CHANCHAL TUBE CORPORATION 9,43,207 SURAT TUBE CORPORATION 5,26,978 ASIAN STEEL 65,98,240 JAI KRISHNA ENTERPRISES 31,17,326 TOTAL 1,64,17,512 THE AFORESAID SUPPLIERS WERE DECLARED AS HAWALA DE ALERS BY THE SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. IN REASSESS MENT PROCEEDINGS ASSESSEE FAILED TO FURNISH RELEVANT DOCUMENTS TO PR OVE GENUINENESS OF PURCHASES. HOWEVER, THE SALES DECLARED BY THE ASSE SSEE WERE ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER CON SIDERING THE FACTS OF THE CASE ESTIMATED GP @12.5% ON NON-GENUINE PURCHASES AND HE NCE, MADE ADDITION OF RS.20,52,189/-. NO DOCUMENT WAS SUBMITTED BY THE A SSESSEE BEFORE THE CIT(A) TO CONTROVERT THE FINDINGS OF ASSESSING OFFICER, TH EREFORE, THE CIT(A) UPHELD THE ASSESSMENT ORDER. 6. TAKING INTO CONSIDERATION THE NATURE OF ASSESSE ES BUSINESS, I AM OF CONSIDERED VIEW THAT ESTIMATION OF GP AT 12.5% IS O N HIGHER SIDE. THE ENDS OF 5 ITA NO. 2870-2871/MUM/2019 (A.Y.2010-11 2011-12) JUSTICE WOULD MEET IF THE GP ON BOGUS PURCHASES I S RESTRICTED TO 8%. THE IMPUGNED ORDER IS MODIFIED IN THE TERMS AFORESAID A ND APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.2871/MUM/2019-A.Y. 2011-12: 7. THE FACTS IN BOTH THE APPEALS ARE PARI-MATERIA. THEREFORE, THE FINDINGS GIVEN BY US WHILE ADJUDICATING APPEAL FOR ASSESSMEN T YEAR 2010-11 WOULD MUTATIS MUTANDIS APPLY TO ASSESSMENT YEAR 2011-12 AS WELL. CONSEQUENTLY, THE APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, BOTH APPEALS BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY T HE 14 TH DAY OF DECEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 14/12/2020 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