ASIAN BOILER ENGINEERS P.LTD, MUMBAI V. ITO WD 6(1)(3), MUMBAI

ITA 298/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0058 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANJU GARODIA
• Keywords: Bogus purchase; Additional evidence
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 298 / MUM/20 1 7 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. ASIAN BOILER ENGINEERS PVT. LTD., 130 - A, GOLANI HILL ROAD, SEWREE, MUMBAI 400 015 VS. I TO WD 6(1)(3), MUMBAI 400 020 PAN/GIR NO. AADCA3203H APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI GIRISH DAVE REVENUE BY SHRI ANJU GARODIA DATE OF HEARING 21 / 08 /201 7 DATE OF PRONOUNCEME NT 22 / 08 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 12, MUMBAI DATED 20/10/2016 FOR THE ASSESSMENT YEAR 2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. THE ONLY GRIEVAN CE OF ASSESSEE RELATES TO ADDITION MADE U/S. 69C IN RESPECT OF ALLEGED BOGUS PURCHASES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABRICATION OF BOILER REPAIRING WORK AND PRO PERTY DEVELOPING ACTIVITY. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 30/09/2009 DECLARING TOTAL INCOME AT RS.18,46,430/ - . THE AO HAS ASSESSED THE ITA NO. 298/MUM/2017 M/S. ASIAN BOILER ENGINEERS PVT. LTD., 2 INCOME OF THE ASSESSEE AT RS.1,15,31,911/ - BY MAKING ADDITION ON ACCOUN T OF ALLEGED BOGUS PURCHASES OF RS.96,85,481/ - . 4. THE AO HAS MADE AN ADDITION / DISALLOWANCE OF RS.96,45,481/ - ON ACCOUNT OF HAWALA PURCHASE WITH RESPECT TO PURCHASES MADE FROM THE SALES TAX HAWALA CONCERNS FROM FOLLOWING PARTIES: - SR. NO. NAME OF THE H AWALA CONCERN AMOUNT RECEIVED 1 M/S. SHREE TRADING CORPORATION RS.54,53,896/ - 2 M/S. K K TRADING COMPANY RS. 42,31,585/ - 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 7. FROM THE RECORD, WE ALSO FOUND THAT THE ASSESSEES AUTHORIZED REPRESENTATIVE FURNISHED THE FOLLOWING DETAILS VIDE SUBMISSIONS DATED 02/02/2015. ASSESSEE VIDE LE TTER DATED 12/02/2015 SUBMITTED COPIES OF LORRY RECEIPT OF PURCHASES FROM THE TWO PARTIES. BEFORE THE CIT(A) THE ASSESSEE HAS FILED APPLICATION FOR ADMITTING ADDITIONAL EVIDENCE DATED 27/11/2015. THE ADDITIONAL EVIDENCES CONSTITUTED SALE BILLS ISSUED TO PA RTIES, COPY OF STOCK REGISTER AND LEDGER OF TRANSPORTATION CHARGES. THE ADDITIONAL EVIDENCES WERE FILED TO SHOW THE QUANTITATIVE TALLY. THE ASSESSING OFFICER HAS SUBMITTED HIS REMAND REPORT DATED 12/04/2016. THE ASSESSING OFFICER HAS VERIFIED THE QUANTITAT IVE TALLY AND FOUND THE SAME TO BE CORRECT. ITA NO. 298/MUM/2017 M/S. ASIAN BOILER ENGINEERS PVT. LTD., 3 8. IN THE CASE OF CIT VS. NANGALIA FABRICS PVT. LTD., (2014) 220 TAXMAN 17 (MAG.)(GUJ)(HC), THE AO HELD THAT AS THE PARTIES FROM WHOM THE PURCHASES WERE ALLEGEDLY MADE BY THE ASSESSEE COULD NOT BE LOCATED, THEY WERE BOGUS AND AN ADDITION HAD TO BE MADE U/S.68 IN THE HANDS OF THE ASSESSEE. THE CIT(A) AND TRIBUNAL DELETED THE ADDITION ON THE BASIS THAT THE PURCHASES COULD NOT BE HELD TO BE BOGUS AS CORRESPONDING SALES HAD BEEN EFFECTED BY THE ASSESSEE. THE HIGH COU RT CONFIRMING THE ORDER OF THE TRIBUNAL HELD THAT THE TRIBUNAL HAS FOUND THAT THE PURCHASES ARE GENUINE BECAUSE THEY ARE SUPPORTED BY BILLS, ENTRIES IN THE BOOKS OF ACCOUNT, PAYMENT BY CHEQUE AND QUANTITATIVE DETAILS. THE AO DID NOT FIND ANY INFLATION IN P URCHASE PRICE OR INFLATION IN CONSUMPTION OR SUPPRESSION THE PRODUCTION. THE ADDITION HAD BEEN MADE ONLY ON THE GROUND THAT THE PARTIES ARE NOT TRACEABLE. ACCORDINGLY, T HE ADDITION SO MADE U/S.68 WAS DELETED. IN THE CASE OF CIT VS. NIKUNJ EXIMP ENTERPRISES (P) LTD., (2013) 216 TAXMAN 171 (MAG) (BOM) (HC), THERE WAS QUANTITATIVE TALLY. SALES NOT DOUBTED. MERELY BECAUSE SUPPLIERS NOT APPEARED BEFORE THE ASSESSING OFFICER OR COMMISSIONER (APPEALS), IT WAS HELD THAT PURCHASES CANNOT BE DISALLOWED. 9. FROM THE R ECORD, WE FOUND THAT DURING THE COURSE OF HEARING, THE ASSESSEE HAS SUBMITTED COPY OF THE BILLS, DELIVERY CHALLANS, LEDGER ACCOUNTS OF THE K.K. TRADING COMPANY AND SHREE TRADING CORPORATION, BANK STATEMENTS IN SUPPORT OF PROOF OF PAYMENT TO K.K. TRADING, C OPIES OF L/R IN RESPECT OF GOODS PURCHASED AND ALL THE OTHER RELEVANT DETAILS TO ITA NO. 298/MUM/2017 M/S. ASIAN BOILER ENGINEERS PVT. LTD., 4 THE ASSESSING OFFICER. WE ALSO FOUND THAT AS PER DETAILS FILED, THE PURCHASES WERE CONSUMED IN THE FABRICATION AND BOILER REPAIRING WORK WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION FROM SALES TAX DEPARTMENT. NOWHERE, AO HAS DECLINED SALES / CONSUMPTION OF GOODS SO PURCHASED CONSIDERING THE VARIOUS DECISIONS CITED BY LEARNED AR AND APPLYING TO THE FACTS OF THE INSTANT CASE, WE DEEM IT APPROPRIATE T O RESTRICT THE DISALLOWANCE TO THE EXTENT OF 12.5% OF THE ALLEGED PURCHASES. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 22 / 08 /2017 S D/ - ( SANDEEP GOSAIN ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 22 / 08 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//