PARAMOUNT MINERALS AND CHEMICALS LIMITED, MUMBAI V. ACIT- 4(3)(1), MUMBAI

ITA 3185/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5424 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP LD
• Keywords: Bogus purchase; Tangible material; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.3185/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) PARAMOUNT MINERALS & CHEMICALS LTD. C-1001, MARATHON INNOVA G.K.MARG, LOWER PAREL (W) MUMBAI 400 013 / VS. ACIT - 4(3)(1) 649, AAYKAR BHAWAN MUMBAI-400 020 ! ./ ./PAN/GIR NO. AABCJ-8882-B ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : WRITTEN SUBMISSIONS DEPARTMENT BY : SHRI NEIL PHILIP LD. DR / DATE OF HEARING : 15/05/2019 / DATE OF PRONOUNCEMENT : 20/05/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME-TAX (APPEALS)-9, MUMBAI, [IN SHORT REFERRED TO AS CIT( A)], APPEAL NO. CIT(A)- 9/CIR.4/232/2015-16 DATED 09/03/2018 ON FOLLOWING GROUNDS OF APPEAL: - 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LA W, THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE REASSESSMENT PROCEEDINGS INI TIATED U/S 147 OF INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW , THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE REASSESSMENT PROCEEDINGS INI TIATED ON THE BASIS OF REASONS RECORDED WHICH ARE DEVOID OF A REASONABLE BELIEF FORMULATED BY THE AO AS TO ESCAPEMENT OF INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW , THE LD. CIT(APPEALS)ERRED IN UPHOLDING THE REASSESSMENT PROCEEDINGS INITIATED SO LELY ON THE BASIS OF AN INTIMATION RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT, ABOUT SUSPICIOUS SUPPLIERS OF GOODS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW , THE LD. CIT(APPEALS) ERRED IN UPHOLDING THE ORDER OF REASSESSMENT WHICH WAS NOT P ASSED BY THE AO WITHIN THE TIME LIMIT LIMITS STIPULATED IN SECTION 153 OF THE INCOME TAX ACT, 1961. 5. ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW , THE LD. CIT(APPEALS) ERRED IN NOT APPRECIATING IN PROPER PERSPECTIVE THE APPELLAN TS SUBMISSIONS CONTAINED IN ITS LETTER DATED 17.06.2016 AND 27.11.2017 SUBMITTE D BEFORE THE LD. CIT(APPEALS) WHICH FORMS PART OF THE RECORDS OF THE CASE. 6. THE APPELLANT CRAVES LEAVE TO OMIT, ALTER, AMEND ANY OF THE ABOVE GROUNDS OR ADD A NEW GROUND BEFORE DISPOSAL OF THE APPEAL. 2.1 FACTS ON RECORD REVEAL THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN MANUFACTURING OF OPTICAL WHITENING CHEMICALS AND OTHER ALLIED CHEMICAL WAS ASSESSED U/S 143(3) R.W.S. 147 ON 27/03/2015 WHEREIN THE ASSESSEE WAS SADDLED WITH CERTAIN ADDIT IONS OF RS.2.23 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ORIGINAL RETURN WAS ASSESSED U/S 143(3) ON 29/11/2011 AT LOSS OF RS.371.44 LACS. 2.2 SUBSEQUENTLY, PURSUANT TO RECEIPT OF CERTAIN IN FORMATION FROM SALES TAX AUTHORITIES THAT THE ASSESSEE MADE BOGUS PURCHASES OF RS.2.23 LACS FROM A SUSPICIOUS ENTITY NAMELY M/S D.R.TRADING CO. , THE CASE WAS REOPENED VIDE ISSUE OF NOTICE U/S 148 ON 06/03/2014 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) & 142(1). THE REASONS FOR REOPENING WERE DULY SUPPLIED AND THE ASSESSEES OBJECTIONS AGAINST REOP ENING WERE DISPOSED- OFF IN DUE COURSE OF TIME. 3 2.3 ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES, H OWEVER, PHYSICAL INSPECTION OF PREMISE OF SUPPLIER REVEALED THAT NO SUCH PARTY EXISTED AT THE GIVEN ADDRESS. AFTER CONSIDERING ASSESSEES SUBMISS IONS AND DOCUMENTARY EVIDENCES, THE AFORESAID PURCHASES WERE TREATED AS BOGUS PURCHASES AND ADDED TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE VALIDITY O F REASSESSMENT PROCEEDINGS AND ALSO CONTESTED THE QUANTUM ADDITION S ON MERIT. HOWEVER, THE ASSESSEES SUBMISSIONS COULD NOT FIND FAVOR WIT H LD. FIRST APPELLATE AUTHORITY WHO CONFIRMED THE STAND OF LD. AO. AGGRIE VED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. GROUND NOS. 1 TO 3 AGITATE REASSESSMENT PROCEEDI NGS ON LEGAL GROUNDS. AFTER DUE CONSIDERATION OF MATERIAL ON REC ORD, WE FIND THAT THE REASSESSMENT PROCEEDINGS WERE TRIGGERED WITHIN A PE RIOD OF 4 YEARS FROM THE END OF RELEVANT AY AND THEREFORE, THE ONLY REQU IREMENT TO REOPEN THE CASE WAS THAT LD. AO CAME INTO POSSESSION OF SOME T ANGIBLE MATERIAL WHICH SUGGESTED POSSIBLE ESCAPEMENT OF INCOME IN TH E HANDS OF THE ASSESSEE. THIS TANGIBLE MATERIAL CAME IN THE SHAPE OF INFORMATION FROM SALES TAX AUTHORITIES WHICH PRIMA-FACIE ESTABLISHED POSSIBLE ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. THE LD. AO, AFTER APPRECIATING THE SAME, FORMED A BELIEF THAT CERTAIN INCOME ESCAPED A SSESSMENT AND ACCORDINGLY NOTICE U/S 148 WAS ISSUED TO THE ASSESS EE. THE REASONS RECORDED WERE DULY SUPPLIED AND THE ASSESSEES OBJE CTIONS AGAINST THE SAME WERE DULY DISPOSED-OFF. NOTHING MORE AT THIS S TAGE, IN OUR OPINION, WAS REQUIRED TO TRIGGER REASSESSMENT PROCEEDINGS AG AINST THE ASSESSEE. 4 THEREFORE, NO INFIRMITY COULD BE FOUND IN THE IMPUG NED ORDER IN THIS REGARD. ACCORDINGLY, THESE GROUNDS STAND DISMISSED. 5. GROUND NO. 4 CONTEST THE REASSESSMENT ORDER ON T HE GROUND THAT THE REASSESSMENT ORDER WAS NOT PASSED WITHIN STIPULATED TIME AS ENVISAGED BY SECTION 153. HOWEVER, WE FIND THAT THE REASSESSMENT ORDER HAS BEEN FRAMED ON 27/03/2015 WHICH IS WELL WITHIN THE STIPU LATED PERIOD OF ONE YEAR FROM THE END OF FINANCIAL YEAR IN WHICH NOTICE U/S 148 WAS SERVED. THEREFORE, NO INFIRMITY COULD BE FOUND IN THE SAME. 6. BY WAY OF GROUND NO. 5, THE ASSESSEE SUBMITTED T HAT THE LD. CIT(A) ERRED IN NOT APPRECIATING THE ASSESSEES SUBMISSION S DATED 17/06/2016 & 27/11/2017. HOWEVER, NOTHING ON RECORD WOULD SUGGES T THAT THE SAID SUBMISSIONS WERE NOT CONSIDERED WHILE FRAMING THE I MPUGNED ORDER. FINDING NO FORCE IN THE SAME, WE DISMISS THIS GROUN D. GROUND NO. 6 IS GENERAL IN NATURE. 7. RESULTANTLY, THE APPEAL STANDS DISMISSED IN TERM S OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON20/05/2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 20/05/2019 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !% / THE APPELLANT 2. &'!% / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. ( )& * , * , / DR, ITAT, MUMBAI 6. ) ,-. / GUARD FILE 5 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI