ITO 26 (1)(6), MUMBAI V. DEEPAK K SALOT, MUMBAI

ITA 339/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHARAT ANDHELE
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6); 145(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I TA NO. 339 /MUM. /2020 ( ASSESSMENT YEAR : 20 09 1 0 ) I TA NO. 340 /MUM. /2020 ( ASSESSMENT YEAR : 20 10 11 ) I TA NO. 341 /MUM. /2020 ( ASSESSMENT YEAR : 20 11 12 ) INCOME TAX OFFICER WARD 26(1)(6), MUMBAI . APPELLANT V/S SHRI DEEPAK K. SALOT 605, KUNTHUNATH APARTMENT SARVODAYA NAGAR, MULUND (WEST) MUMBAI 400 080 PAN AONPS9615Q . RESPONDENT ASSESSEE BY : SHRI ADITYA REVENUE BY : SHRI BHARAT ANDHELE DATE OF HEARING 27 . 0 7 .20 2 1 DATE OF ORDER 14.09.21 O R D E R PER S. RIFAUR RAHMAN, A.M. TH E CAPTIONED APPEAL S HA VE BEEN FILED BY THE REVENUE CHALLENGING THE ORDER S OF EVEN DATE 11 TH OCTOBER 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 40 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S 2009 10, 2010 11 AND 2011 12 RESPECTIVELY. 2 SHRI DINESH B. SHAH 2. SINCE ALL THESE APPEALS BY THE REVENUE PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES , EXCEPT VARIATION IN FIGURES, ARISING OUT OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES, THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. HOWEVER, IN ORDER TO UNDERSTAND T HE IMPLICATION, IT WOULD BE NECESSARY TO TAKE NOTE OF THE FACTS OF ONE APPEAL. WE ARE, ACCORDINGLY, NARRATING THE FACTS, AS THEY APPEAR IN THE APPEAL BEING ITA NO. 339 /MUM./20 20, FOR ASSESSMENT YEAR 2009 10, THE RESULT OF WHICH WILL BE EQUALLY APPLICABLE TO THE OTHER APPEALS FOR THE A.Y. 20010 11 AND 2011 12 AS WELL. 3. THE COMMON ISSUE RAISED BY THE REVENUE IN ALL THE APPEALS IS, WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 12.5% ON ACCOUNT OF BOGUS PURCHASE AS AGAINST T HE TOTAL BOGUS PURCHASE TRANSACTIONS TAKEN BY THE ASSESSING OFFICER. ITA NO.339/MUM./2020 ASSESSMENT YEAR 2009 10 4. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 20 09 , DECLARING TOTAL INCOME OF ` 3 , 38 , 890 . SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX AUTHORITIES THROUGH THE INVESTIGATION WING OF THE DEPARTMENT INDICATING THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRIES PROVIDED BY HAWALA OPERATORS THROUGH BOGUS 3 SHRI DINESH B. SHAH PURCHASE BILLS WITHOUT SUPPLYING ANY GOODS , THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES WORTH ` 55,85,089 , CLAIMED TO HAVE BEEN MADE DURING THE YEAR FROM FOUR PARTIES . FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF SUCH PURCHASES, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO THE SELLING DEALERS CALLING FOR CERTAIN INFORMATION. H OWEVER, ALL SUCH NOTI CES RETURNED BACK UN SERVED. FURTHER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EVIDENCES FURNISHED BY THE ASSESSEE TO ESTABLISH THE GENUI NENESS OF PURCHASES. THUS, ULTIMATELY, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE UNDER SECTION 145(3) OF THE ACT AND HELD THAT THE PURCHASES AGGREGATING TO ` 55 , 85 , 089, FROM THE FOUR PARTIES WERE MERELY ACCOMMODATION ENTRIES AND S UCH PURCHASES WERE MADE TO INFLATE THE PURCHASES / EXPENSES AND HENCE DISALLOWED ` 5 5 , 85 , 0 89 WHICH WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE . THE ASSESSEE BEING NOT SATISFIED WITH THE ORDER OF THE ASSESSING OFFICER, FILED APPEAL BEFORE THE FIRST A PPELLATE AUTHORITY TO CONTEST THE ADDITION. 5. THE LEARNED CIT(A) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ADDITION OF ` 55,85,089, BY RELYING UPON VARIOUS ORDERS OF THE TRIBUNAL AS WELL THE DECISIONS OF THE HONBLE HIGH COURTS. 4 SHRI DINESH B. SHAH 6. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT , THOUGH , THE ASSESSEE MAY NOT HAVE BEEN ABLE TO PROVE THE GENUINENESS OF PURCHASES FROM THE DECLARED SOURCE, HOWEVER, IT IS A FACT ON RECORD THAT THE ASSESSING OFFICER HAS NO T DISPUTE D THE SALE S EFFECTED BY THE ASSESSEE. THEREFORE, IT GOES TO PROVE THAT THE ASSESSEE MUST HAVE PURCHASED GOODS FROM SOME OTHER UNDISCLOSED SOURCE. IN SUCH CIRCUMSTANCES, IT IS THE SETTLED LEGAL POSITION THAT THE ENTIRE PURCHASES CANNOT BE DISALLOWE D, BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR ADDITION. THEREFORE, KEEPING IN VIEW THE DECISION S OF THE TRIBUNAL IN IDENTICAL NATURE OF CAS ES, THE DECISION OF THE LEARNED CIT(A) TO RESTRICT THE DISALLOWANCE TO 12.5% OF THE NON GENUINE PURCHASE IS FAIR AND REASONABLE REQUIRING NO INTERFERENCE FROM THIS FORUM. ACCORD INGLY, WE UPHOLD THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, REVENUES APPEAL FOR A.Y. 2009 1 0 STANDS DISMISSED . ITA NO.340/MUM./2020 ASSESSMENT YEAR 2010 11 ITA NO.341/MUM./2020 ASSESSMENT YEAR 2011 12 8. INSOFAR AS THE COMMON ISSUE RAISED IN THESE APPEALS BY THE REVENUE IS CONCERNED, WE FIND THAT THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED IS MUTATIS MUTANDIS AND MATERIALLY 5 SHRI DINESH B. SHAH IDENTICAL TO THE ISSUE DECIDED BY US VIDE PARA 6 ABOVE , RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO. 339 /MUM./20 2 0, FOR THE ASSESSMENT YEAR 200 9 10 , WHEREIN WE HAVE UPHELD THE ORDER OF THE LEARNED CIT(A) BY DISMISSING THE GROUNDS RAISED BY THE REVENUE FOR THE A.Y. 2009 10. CONSEQUENT UPON THE DECISION TAKEN BY US ON THIS ISSUE AS AFORESAID, WHILE MAINTAINING THE C ONSISTENCY WITH THE VIEW TAKEN THEREIN, WE DO NOT FIND ANY INFIRMITY WITH THE ORDER OF THE LEARNED CIT(A) WHICH IS UPHELD ON THIS ISSUE BY DISMISSING THE GROUNDS RAISED BY THE REVENUE FOR A.Y. 2009 10 TO 2011 12 . 9. IN THE RESULT, REVENUES APPEALS FOR A.Y. 2009 10, 2010 11 AND 2011 12 ARE DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 14.9.21 SD/ - MAHAVIR SINGH VICE PRESIDENT SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 14.9.21 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE C I T(A); (4) THE C I T, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI