ITO, 6(1)(4), MUMBAI V. M/s BOMBAY OFFSET PVT. LTD., MUMBAI

ITA 2913/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1167 (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: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase; Accommodation entries; Tax effect
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2913 / / 2019 (%. .2010-11 ) ITA NO. 2913/MUM/2019 (A.Y.2010-11) . 2914 / / 2019 (%. .2011-12 ) ITA NO. 2914/MUM/2019 (A.Y.2011-12) INCOME TAX OFFICER -6(1)(4), ROOM NO.508, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020. / VS. : / APPELLANT M/S. BOMBAY OFFSET PVT. LTD. UNIT NO.7, SHIVSHAKTI INDUSTRIAL ESTATE, JR BORICHA MARG, LOWER PAREL, MUMBAI 400 011 PAN: AAACB1781E : / RESPONDENT REVENUE BY : SHRI AJAY PRATAP SINGH ASSESSEE BY : NONE / DATE OF HEARING : 12/10/2020 / DATE OF PRONOUNCEMENT : 14/12/2020 / ORDER THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI [IN SHORT THE CIT(A)] FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 RESPECTIVELY. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 11/01/2019. SINCE, THE ISSUE INV OLVED AND THE GROUNDS OF APPEAL IN 2 ITA NO. 2913/MUM/2019 (A.Y.2010-11) ITA NO. 2914/MUM/2019 (A.Y.2011-12) BOTH THESE APPEALS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OFF BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRINTING. THE ASSESSME NT FOR ASSESSMENT YEARS 2010-11 AND 2011-12 IN THE CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF M AHARASHTRA BY DGIT(INVESTIGATION), MUMBAI THAT THE ASSESSEE HAD O BTAINED ACCOMMODATION ENTRIES FROM M/S. PADMAVATI ENTERPRISES, A DECLARED HAWALA DEALER AS UNDER: FOR ASSESSMENT YEAR 2010-11 - RS. 11,43,177/- FOR ASSESSMENT YEAR 2011-12 - RS. 6,68,551/- THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER DESPITE SERVICE E OF NOTICE, HENCE, THE ASSESSING OFFICER COMPLETED THE ASSESSME NT FOR THE IMPUGNED ASSESSMENT YEARS UNDER SECTION 144 R.W.S. 147 OF TH E INCOME TAX ACT, 1961 ( IN SHORT THE ACT). IN THE ABSENCE OF ANY DOCUMENTARY EVID ENCE TO PROVE THE GENUINENESS OF THE PURCHASES, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE BOGUS PURCHASES IN THE RESPECTIVE ASSESSMENT YEARS. AGGRIEVED BY THE ASSESSMENT ORDERS DATED 12/02/2016 PASSED UNDER SECTION 143(3) R.W. 144 R.W . 147 OF THE ACT, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) FOR THE RESPECTIVE ASSESSMENT YEARS. THE CIT(A) VIDE SEPARATE ORDERS FOR ASSESSMENT YEAR 2010-11 AND 2 011-12, RESTRICTED THE DISALLOWANCE ON BOGUS PURCHASES TO 12.5%. AGAINST THE AFORESAID FINDINGS OF CIT(A), THE REVENUE IS IN APPEAL. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPARTM ENT SUBMITTED THAT THOUGH THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY LIMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019, BU T THE CASE OF ASSESSEE FALLS UNDER 3 ITA NO. 2913/MUM/2019 (A.Y.2010-11) ITA NO. 2914/MUM/2019 (A.Y.2011-12) EXCEPTION SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE FAI LED TO APPEAR BEFORE THE ASSESSING OFFICER. NO DOCUMENTS WERE FILED BY THE ASSESSEE TO PROVE GENUINENESS OF THE PURCHASES. EVEN BEFORE CIT(A) THE ASSESSEE FA ILED TO PROVE TRAIL OF GOODS. FURTHER THE ASSESSEE COULD NOT PRODUCE THE DEALER FROM WHOM ALLEGED PURCHASES WERE MADE. THE LD. DEPARTMENTAL REPRESENTATIVE PR AYED FOR REVERSING THE FINDING OF CIT(A) AND RESTORING THE DISALLOWANCE OF BOGUS PUR CHASES AS MADE IN THE ASSESSMENT ORDER. 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED FOR BOTH THE IMPUGNED A SSESSMENT YEARS. THE ADDITION IN RESPECT OF BOGUS PURCHASES HAVE BEEN MADE IN THE IMPUGNED ASSESSMENT YEARS FOR IDENTICAL REASONS. THE ASSESSEE FAILED TO APPEAR B EFORE THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS, THEREFORE, THE ASSESSMENT W AS COMPLETED BY THE ASSESSING OFFICER AFTER INVOKING THE PROVISIONS OF SECTION 14 4 OF THE ACT. UNDISPUTEDLY THE SALES DECLARED BY THE ASSESSEE WERE ACCEPTED BY THE ASSES SING OFFICER. WITHOUT CORRESPONDING PURCHASES THERE CANNOT BE SALES, THER EFORE, IN SUCH LIKE BOGUS TRANSACTIONS IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN BOGUS PURCHASES THAT HAS TO BE BROUGHT TO TAX.[ RE.PCIT VS. PARAMSAKHTI DISTRIB UTORS PVT. LTD., INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 BY HON'BLE BOM BAY HIGH COURT]. I FIND NO INFIRMITY IN THE IMPUGNED ORDERS, HENCE, THE SAME A RE UPHELD AND APPEALS BY THE REVENUE FOR ASSESSMENT YEAR 2010-11 AND 2011-12 AR E DISMISSED. 5. NO APPEAL/CROSS OBJECTIONS FILED BY THE ASSESSEE AG AINST THE ORDERS OF CIT(A) HAS BEEN BROUGHT TO THE NOTICE OF BENCH. IN CASE ANY APPEAL/CROSS OBJECTIONS BY THE ASSESSEE AGAINST IMPUGNED ORDERS OF CIT(A) ARE NOTICED, THEN THIS ORDER MAY BE 4 ITA NO. 2913/MUM/2019 (A.Y.2010-11) ITA NO. 2914/MUM/2019 (A.Y.2011-12) RECALLED AND THE CROSS APPEALS MAY BE LISTED TOGETH ER FOR DISPOSAL BY A COMMON ORDER . 6. IN THE RESULT, BOTH APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE 14 TH DAY OF DECEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: /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