BHARAT KUMAR S. JAIN, MUMBAI V. ITO 19(1)(2), MUMBAI

ITA 3212/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6822 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Tangible material
• Section: 133(6); 143(1); 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 3212 / MUM . /2018 ( ASSESSMENT YEAR : 20 09 10 ) BHARAT KUMAR S. JAIN PROP. M/S. BHARAT STEEL INDIA 182/184, T.P. STREET 6 TH KUMBHARWADA, MUMBAI 400 004 PAN AEKPJ0881J . APPELLANT V/S INCOME TAX OFFICER WARD 19 ( 1 )( 2 ), MUMBAI . RESPONDENT ITA NO. 3213 /MUM. /2018 ( ASSESSMENT YEAR : 20 10 11 ) BHARAT KUMAR S. JAIN PROP. M/S. BHARAT STEEL INDIA 182/184, T.P. STREET 6 TH KUMBHARWADA, MUMBAI 400 004 PAN AEKPJ0881J . APPELLANT V/S INCOME TAX OFFICER WARD 19 ( 1 )( 2 ), MUMBAI . RESPONDENT 2 BHARAT KUMAR S. JAIN ITA NO. 3214 /MUM. /2018 ( ASSESSMENT YEAR : 20 11 12 ) BHARAT KUMAR S. JAIN PROP. M/S. BHARAT STEEL INDIA 182/184, T.P. STREET 6 TH KUMBHARWADA, MUMBAI 400 004 PAN AEKPJ0881J . APPELLANT V/S INCOME TAX OFFICER WARD 19 ( 1 )( 2 ), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH DATE OF HEARING 28 . 0 2 .201 9 DATE OF ORDER 28.02.2019 O R D E R A FORESAID APPEAL S HA VE BEEN FILED BY THE SAME ASSESSEE CHALLENGING THREE SEPARATE ORDERS , ALL DATED 22 ND JANUARY 201 8 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 54, MUMBAI, FOR THE ASSESSMENT YEAR S 2009 10, 2010 11 AND 2011 12. 2 . WHEN THE APPEAL S WERE CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. THE NOTICE OF HEARING ISSUED PER REGISTERED POST AT THE ADDRESS MENTIONED IN COL. NO.10, OF APPEAL MEMO HAS ALSO RETURNED BACK UNSERVED BY THE POSTAL AUTHORITY WITH THE REMARK NOT KNOWN. IN VIEW OF THE AFORESAID, I PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARIN G THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 BHARAT KUMAR S. JAIN 3 . T HE ONLY COMMON ISSUE INVOLVED IN ALL THESE APPEALS RELATES TO THE ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 4 . BRIEF FACTS, MORE OR LESS COMMON IN ALL THE APPEALS ARE, THE ASSESSEE , AN INDIVIDUAL , CARRIES ON BUSINESS OF TRADING IN FERROUS AND NON FERROUS METALS THROUGH HIS PROPRIETARY CONCERN M/S. BHARAT STEEL (INDIA). FOR THE ASSESSMENT YEAR 2009 10, THE ASSESSEE FILED HIS RETURN OF INCOME ON 23 RD SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 2,64,754. FOR THE ASSESSMENT YEAR 2010 11, THE ASSESSEE FILED ITS RETURN OF INCOME ON 18 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 3,03,023 AND FOR ASSESSMENT YEAR 2011 12, THE ASSESSEE FILED HIS RETURN OF INCOME ON 17 TH SEPTEMBER 2011, DECLARING TOTA L INCOME OF ` 3,38,313. THE AFORESAID RETURN S OF INCOME FILED BY THE ASSESSEE WERE INITIALLY PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT (INV.), MU MBAI, AND SALES TAX DEPARTMENT, MAHARASHTRA GOVERNMENT THAT CERTAIN PURCHASES CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE IN THE AFORESAID ASSESSMENT YEAR S WERE FROM PARTIES WHO HAVE BEEN IDENTIFIED BY THE SALES TAX DEPARTMENT AS HAWALA OPERATORS PROVIDING A CCOMMODATION BILLS WITHOUT ACTUAL SALE TRANSACTION. ON THE BASIS OF SUCH INFORM ATION, THE ASSESSING OFFICER HAD REASON TO BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF SUCH NON GENUINE PURCHASES . ACCORDINGLY, 4 BHARAT KUMAR S. JAIN HE RE OPENED THE AS SESSMENTS FOR THE AFORESAID ASSESSMENT YEARS UNDER SECTION 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASE S BY FURNISHING EVIDENCE, SUCH AS, BILLS AND VOUCHERS, NAME OF SELLER, PLACE OF DISPATCH O F GOODS , MODE OF TRANSPORTATION, DELIVERY CHALLAN, ETC. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF TRANSACTION S , THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALERS CALLING FOR INF ORMATION. HOW E VER, ALL SUCH NOTICES ISSUED BY THE ASSESSING OFFICER RETURNED BACK UN SERVED. AS ALLEGED BY THE ASSESSING OFFICER, EXCEPT FURNISHING THE PURCHASE INVOICES AND BANK STATEMENT, THE ASSESSEE COULD NOT FURNISH ANY OTHER DOCUMENTS INCLUDING TRANS PORT RECEIPTS, DELIVERY CHALLANS, GOODS INWARD REGISTER, ETC. TO PROVE ACTUAL DELIVERY OF GOODS. THEREFORE, THE ASSESSING OFFICER TREATED THE FOLLOWING PURCHASES MADE BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEAR S AS NON GENUINE: A.Y. 2009 10 ` 86,75,729 A.Y. 2010 11 ` 75,74,119 A.Y. 2011 12 ` 75,21,443 5 . HOWEVER, BEING OF THE OPINION THAT THE ASSESSEE HAS ENTERED INTO SUCH NON GENUINE TRANSACTION S TO SUPPRESS ITS TRUE PROFIT AND REDUCE THE TAX LIABILITY , THE ASSESSING OFFICER PROCEEDED TO ESTIMATE PROFIT @ 15% OF THE NON GENUINE PURCHASES MADE IN EACH ASSESSMENT YEAR 5 BHARAT KUMAR S. JAIN AND ADDED THEM BACK TO THE INCOME OF THE ASSESSEE IN THE RESPECTIVE ASSESSMENT YEAR S . THOUGH, THE ASSESSEE CHALLENGED THE ADDITION MADE BY T HE ASSESSING OFFICER BEFORE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY REDUCING THE PROFIT MARGIN TO 12.5% IN ALL THE ASSESSMENT YEARS UNDER APPEAL. 6 . I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT , ON THE BASIS OF SPECIFIC INFORMATION AND TANGIBLE MATERIAL IN HIS POSSESSION, THE ASSESSING OFFICER HAD CALLED UP O N THE ASSESSEE TO FURNISH VARIOUS DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF PURCHASES MADE BY HIM IN THE AFORESAID ASSESSMENT YEARS. HOWEVER, EXCEPT FUR N ISHING THE PURCHASE INVOICES AND PAYMENT DETAILS , THE ASSESSEE COULD NOT FURNISH ANY OTHER DOCUMENTARY EVIDENCE TO PROVE TRANSPORTATION AND ACTUAL DELIVERY OF GOODS. FURTHER, THE ASSESSEE FAILED TO PRODUCE EITHER THE SELLING PARTIES OR EVEN CONFIRMATIONS CONFIRMING THE SALE TRANSACTION. IN THESE CIRCUMSTANCES, I DO NOT FIND ANY FAULT WITH THE CONCLUSION DRAWN BY THE DEPARTMENTAL AUTHORITIES THAT THE PURCHASES MADE BY THE ASSESS EE ARE NON GENUINE. AS REGARDS THE ESTIMATION OF PROFIT @ 12.5% , THE ASSESSEE HAS NEITHER APPEARED NOR FURNISHED ANY EVIDENCE TO DEMONSTRATE THAT THE PROFIT RATE OF 12.5% ADOPTED BY THE LEARNED COMMISSIONER (APPEALS) IS EITHER HIGH OR UNREASONABLE. IN VIEW OF THE AFORESAID, I UPHOLD THE ORDER OF THE LEARNED COMMISSIONER 6 BHARAT KUMAR S. JAIN (APPEALS) IN ESTIMATING PROFIT @ 12.5% OF THE NON GENUINE PURCHASES. GROUNDS RAISED IN ALL THESE APPEALS ARE DISMISSED. 7 . IN THE RESULT, ASSESSEES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28.02.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI