AVARAN PACKAGING P.LTD, MUMBAI V. DCIT CIR 12(1)(1), MUMBAI

ITA 2984/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0184 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.2983/MUM/2017 : ASST.YEAR 2010-2011 ITA NO.2984/MUM/2007 : ASST. YEAR 2011-2012 M/S.AVARAN PACKAGING PRIVATE LIMITED 1, SUJA APARTMENT, I.C.COLONY NEAR CORPORATION BANK, BORIVALI (WEST) MUMBAI 400 103. PAN : AAACA4257C. / VS. DY.COMMISSIONER OF INCOME - TAX CIRCLE 12(1)(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI VIMAL PUNMIYA /RESPONDENT BY : SHRI V.JANARDHANAN / DATE OF HEARING : 03.07.2017 / DATE OF PRONOUNCEMENT : 04.09.2017 / O R D E R THESE ARE APPEALS BY THE ASSESSEE DIRECTED AGAINST RESPECTIVE ORDER OF LEARNED CIT(A) PERTAINING TO ASSESSMENT YEARS 2010-2011 AND 2011-2012. 2. THE ISSUE RAISED IS THAT CIT(A) ERRED IN SUSTAINING DISALLOWANCE OF BOGUS PURCHASE AS UNDER:- ASSESSMENT YEAR 2010-2011 RS.34,94,271 ASSESSMENT YEAR 2011-2012 RS.52,87,789 3. SINCE FACTS ARE IDENTICAL, THESE APPEALS ARE BEING ADJUDICATED WITH FACTS AND FIGURES FROM ASSESSMENT YEAR 2010-2011. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT CAME TO KNOWLEDGE OF THE DEPARTMENT THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS TO THE TUNE OF RS.4,07,29,270 FROM VARIOUS ITA NOS.2983 & 2984/MUM/2017. M/S. AVARAN PACKAGING PRIVATE LIMITED. 2 PARTIES WHICH ARE HAWALA DEALERS AS APPEARING IN THE LIST OF HAWALA DEALERS ISSUED BY THE SALES TAX (VAT) DEPARTMENT, STATE OF MAHARASHTRA. THE SAID LIST REVEALED THE NAMES OF THE FOLLOWING PARTIES VIZ. NAME OF THE COMPANY PAN F.Y. AMOUNT BLUE NILE ENTERPRISES AGLPB1616Q 2009 - 10 7403136 GREAT INTERNATIONAL 2009 - 10 2557048 LINUX SALES AGENCY P.LTD. AABCL2934N 2009 - 10 2994950 TARA ENTERPRISES AWTPS0269A 2009 - 10 1379040 BIG TRADE AGENCY AAXPU4030D 2009 - 10 4610320 DAKSHA ENTERPRISES BJNPS1964G 2009 - 10 3221816 ROMEX METAL &TUBES P.LTD. AADCR5596C 2009 - 10 9585680 GLOBEX INTERNATIONAL AHXPD3852H 2009 - 10 3420560 SRISHTI MERCANTILE P.LTD. AAJCS5910K 2009 - 10 5556720 5. IN THIS CASE NOTICE U/S 133(6) OF THE ACT WERE ISSUED TO ALL PARTIES MENTIONED IN REASON RECORDED FOR REOPENING WHICH WERE RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS NOT KNOWN / LEFT. THE A.O. FURTHER NOTED THAT AN INSPECTOR OF THIS CHARGE, WAS DEPUTED TO SERVE NOTICE U/S 133(6). HOWEVER, THE INSPECTOR HAS REPORTED THAT NO SUCH PARTIES / VENDORS EXISTED ON THE GIVEN ADDRESSES AND HENCE HE COULD NOT SERVE THE SAID NOTICE U/S 133(6) OF THE ACT. HENCE THE A.O. CONCLUDED THAT THE PURCHASE INVOICES ARE BOGUS. 6. THE ASSESSING OFFICER SUSTAINED ADDITION @ 8.58% AND 7.39% FOR THE RESPECTIVE YEAR OUT OF THE BOGUS PURCHASES. 7. UPON ASSESSEES APPEAL, LEARNED CIT(A) CONFIRMED THE ADDITION. 8. AGAINST ABOVE ORDER OF LEARNED CIT(A) ASSESSEE IS IN APPEAL BEFORE THE ITAT. ASSESSEE HAS NOT CHALLENGE THE VALIDITY OF REOPENING BEFORE THE ITAT. ITA NOS.2983 & 2984/MUM/2017. M/S. AVARAN PACKAGING PRIVATE LIMITED. 3 HE HAS ONLY CHALLENGE THE MERITS OF THE ADDITION CLAIMING THAT DOCUMENTARY EVIDENCE WAS PRODUCED BEFORE THE ASSESSING OFFICER IN SUPPORT OF THE PROPOSITION THAT THE PURCHASES WERE GENUINE. 9. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT CREDIBLE AND COGENT INFORMATION WAS RECEIVED IN THIS CASE BY THE ASSESSING OFFICER THAT CERTAIN ACCOMMODATION ENTRY PROVIDER/BOGUS SUPPLIERS WERE BEING USED BY CERTAIN PARTIES TO OBTAINED BOGUS BILLS, ASSESSEE WAS FOUND TO HAVE TAKEN ACCOMMODATION ENTRY/BOGUS PURCHASE BILLS DURING THE CONCERNED ASSESSMENT YEAR FROM DIFFERENT PARTIES. BASED UPON THIS INFORMATION ASSESSMENT WAS REOPENED. FURTHERMORE, IT IS NOTED THAT IN SUCH FACTUAL SCENARIO ASSESSING OFFICER HAS MADE THE NECESSARY ENQUIRY. THE ISSUE OF NOTICE TO ALL THE PARTIES HAVE RETURNED UNSERVED. INSPECTOR FROM THE DEPARTMENT HAS ALSO CONFIRMED THE NONEXISTENCE OF THESE PARTIES HAD THE SAID ACTRESSES. ASSESSEE HAS NOT BEEN ABLE TO PROVIDE ANY CONFIRMATION FROM ANY OF THE PARTY. ASSESSEE HAS ALSO NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. IN THIS FACTUAL SCENARIO IT IS AMPLY THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION OF DOCUMENTS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS ARE BOGUS AND NON- EXISTENT. 10. HENCE PURCHASE BILLS FROM THESE NON-EXISTENT THE/BOGUS PARTIES CANNOT BE TAKEN AS COGENT EVIDENCE OF PURCHASES, IN LIGHT OF THE OVERWHELMING EVIDENCE THE REVENUE AUTHORITIES CANNOT PUT UPON BLINKERS AND ACCEPT THESE PURCHASES AS GENUINE. THIS PROPOSITION IS DULY SUPPORTED BY HONBLE APEX COURT DECISION IN THE CASE OF SUMATI DAYAL 214 ITR 801 AND DURGA PRASAD ITA NOS.2983 & 2984/MUM/2017. M/S. AVARAN PACKAGING PRIVATE LIMITED. 4 MORE 82 ITR 540. IN THE PRESENT CASE THE ASSESSEE WANTS THAT THE UNASSAILABLE FACT THAT THE SUPPLIERS ARE NON-EXISTENT AND THUS BOGUS SHOULD BE IGNORED AND ONLY THE DOCUMENTS BEING PRODUCED SHOULD BE CONSIDERED. THIS PROPOSITION IS TOTALLY UNSUSTAINABLE IN LIGHT OF ABOVE APEX COURT DECISIONS. 11. IN THESE CIRCUMSTANCES LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF TAX APPEAL NO. 240 OF 2003 IN THE CASE OF N K INDUSTRIES VS DY CIT, ORDER DATED 20.06.2016, WHEREIN HUNDRED PERCENT OF THE BOGUS PURCHASES WAS HELD TO BE ADDED IN THE HANDS OF THE ASSESSEE AND TRIBUNALS RESTRICTION OF THE ADDITION TO 25% OF THE BOGUS PURCHASES WAS SET ASIDE. IT WAS EXPOUNDED THAT WHEN PURCHASE BILLS HAVE BEEN FOUND TO BE BOGUS 100% DISALLOWANCE WAS REQUIRED. THE SPECIAL LEAVE PETITION AGAINST THIS ORDER ALONG WITH OTHERS HAS BEEN DISMISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 16.1.2017. 12. HOWEVER I NOTE THAT THIS IS NOT AN APPEAL BY THE REVENUE. HENCE IT WILL NOT BE APPROPRIATE TO TAKE AWAY THE RELIEF ALREADY GRANTED BY THE REVENUE TO THE ASSESSEE. HENCE I CONFORMED THE ORDER OF LEARNED CIT(A). 13. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED ON THIS 04 TH DAY OF SEPTEMBER, 2017. SD/- ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI; DATED : 04 TH SEPTEMBER, 2017. DEVDAS* ITA NOS.2983 & 2984/MUM/2017. M/S. AVARAN PACKAGING PRIVATE LIMITED. 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.