BABULAL B. KANUNGO, MUMBAI V. ITO WD 19(1)(2), MUMBAI

ITA 3410/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9925 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Reopening of assessment; Bogus purchase; Rejection of books of accounts; Question of law; Corroborative evidences; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 3410 / MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) ITA NO. 3409/ MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 3411/ MUM/20 17 ( ASSESSMENT YEAR : 20 11 - 12 ) SHRI BABULAL B. KANUNGO SHOP NO.5, WING F GROUND FLOOR, SHREEPATI JEWELS, SUKHANAND CHAWL KHATTARGALI, NEAR C.P. TANK MUMBAI 400 004 VS. ITO WARD - 19(1)(2) MUMBAI PAN/GIR NO. ACQPK0923Q APPELLANT ) .. RESPONDENT ) ITA NO. 3 408/ MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) ITA NO. 3407/ MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 3461/ MUM/20 17 ( ASSESSMENT YEAR : 2011 - 12 ) SMT. LALITA B. KANUNGO SHOP NO.5, WING F GROUND FLOOR, SHREEPATI JEWELS, SUKHANAND CHAWL KHATTARGALI, NEAR C.P. TANK MU MBAI 400 004 VS. ITO WARD - 19(2)(1) MUMBAI PAN/GIR NO. AFQPK7454R APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SANJAY R PARIKH REVENUE BY SHRI SUMAN KUMAR DATE OF HEARING 12 / 03 /201 8 DATE OF PRONOUNCEME NT 14 / 03 /201 8 / O R D E R ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 2 PER BENCH : THESE ARE THE APPEALS FILED BY ASSESSEE S AGAINST THE ORDER OF CIT(A) - 30, MUMBAI DATED 14/03/2017 FOR A.Y.2009 - 10, 2010 - 11 AND 2011 - 12 IN THE MATTER OF ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE IT ACT. 2. COMMON GROU NDS HAVE BEEN RAISED BY BOTH THE ASSESSEE S WITH REGARD TO THE ADDITION OF 12.5% MADE IN RESPECT OF BOGUS PURCHASES FOUND DURING THE COURSE OF SURVEY. ASSESSEE HAS ALSO CHALLENGED REOPENING OF ASSESSMENT U/S.147. FACTS OF BOTH THE ASSESSEE S ARE SAME IN BOT H THE YEARS UNDER CONSIDERATION. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE NAMELY BABULAL B KANUNGO IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METALS' UNDER THE PROPRIET ARY CONCERN B Y NAME M/S ALPESH METAL CORPORATION. THE RETURN OF IN COME FOR THE ASSESSMENT Y EAR 2010 - 11 WAS FILED ON 25 - 09 - 2009, DECLARING TOTAL INCOME OF RS. 4,09,000 / - . THERE WAS SURVEY IN THE BUSINESS PREMISES OF ASSESSEE, THEREAFTER CASE WAS REOPENED U/ S 147, BY ISSUING NOTICE U/S 148 OF THE ACT ON 22 - 08 - 2013, BASED ON THE INFORMATION RECEIVED FROM THE DGIT(INV.), MUMBAI, WHO IN TURN RECEIVED THE SAME FROM THE MAHARASHTRA SALES TAX DEPARTMENT MUMBAI, THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF THE A CCOMMODATION ENTRIES PROVIDED BY SOME OF THE MVAT DEALERS, WHO WERE INDULGING IN ISSUING BOGUS SALE/PURCHASE BILLS, INVESTIGATED AND KEPT ON THE PUBLIC DOMAIN BY THE SALES TAX DEPARTMENT. ASSESSMENT U/S. 143(3) ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 3 R.W.S. 147 OF THE ACT, WAS COMPLETED BY THE L D. AO ON 31 - 03 - 2015 D ETERMINING THE TOTAL INCOME AT RS. 61,96,837/ - . DU RING THE COURSE OF REASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE TAKEN ACCOMMODATION ENTRIES FROM SEVENTEEN PARTIES TO THE TUNE OF JMS - 59,37,814/ - . TO ASCERTAIN THE GENUINENESS OF PURCHASES SHOWN IN THE ACCOUNTS, 133(6) OF THE ACT WERE ISSUED TO ALL OF THEM BY THE AO, WHICH WERE RETURNED UNSER VED. AO ASKED TO PROVE THE GENUINENESS OF THE SAID PARTIES AND THE PURCHASES MADE FROM THEM WITH ADEQUATE SUPPORTING EVIDENCES. HOWEVER THE ASSESSEE ONLY FURNISHED THE DETAILS LIKE LEDGER ACCOUNT AND CHEQUE PAYMENT AND COULD NOT ABLE PRODUCE THE DOCUMENTS LIKE DELIVERY CHALLANS, LORRY RECEIPT AND TRANSPORTATION DETAILS. AFTER GOING THROUGH THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE A T LENGTH, AO CONCLUDED THAT THE ASSESSEE DID NOT PURCHASE ANY GOODS FROM THE SAID PARTIES. SINCE THE PURCHASES FROM THE MENTIONED PARTIES REMAIN UNVERIFIABLE, THE AO REJECTED THE BOOKS OF ACCOUNTS, U/S 145(3) OF THE ACT. THE AO FOLLOWING THE GUJARAT HIGH C OURT DECISIONS REPORTED IN 356 ITR 451 IN THE CASE OF CIT VS SIMIT P SHETH AND THE DECISION REPORTED IN 355 ITR 290 IN THE CASE OF M/S BHOLENATH POLY FAB P LTD., ADDED TO THE TOTAL INCOME OF THE ASSESSEE, AN AMOUNT OF RS. 57,42,2277 - BEING 12.5% OF THE TOTA L NON - GENUINE OF RS.4,59,37,814/ - FROM THE SEVENTEEN PARTIES. 5. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF AO AFTER OBSERVING AS UNDER: - 6.3 I I HAVE PERUSED THE RIVAL CONTENTIONS. THE ASSESSING OFFICER TREATED ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 4 TOTAL PURCHASE AMOUNT FROM THE SEVENTEEN PARTIES AS NON - GENUINE PURCHASES STATING THAT THE APPELLANT HAS FAILED TO PRODUCE ANY SUPPORTING EVIDENCE TO PROVE THAT THE PURCHASES MADE FROM THEM ARE GENUINE BUT ONLY BILLS HAVE BEEN OBTAINED FROM HAWALA DEALERS AND ADDED AN AMOUNT OF RS.57,42 ,2277 - , BEING @12.5% OF THE TOTAL AMOUNT OF PURCHASES OF T 4,59,37,814/ - . IT IS NOTICED THAT DESPITE PROVIDING ADEQUATE OPPORTUNITY BY THE AO, THE APPELLANT FAILED TO PRODUCE DETAILS LIKE TRANSPORTATION BILL, OCTROI RECEIPT, WEIGHING BILL, GOO DS RECEIPT NOTES (CRN), SUBSEQUENT SALE/MANUFACTURING DETAILS. WHEN THE SALES TAX DEPARTMENT HAS CLASSIFIED THE FIVE PARTIES AS HAWALA DEALERS AND HAS SUBSEQUENTLY FORWARDED THE INFORMATION TO THE INCOME TAX DEPARTMENT THAT THE APPELLANT IS ONE OF TH E BENEFICIARIES, ONUS OF VERY HIGH DEGREE IS ON THE APPELLANT TO PROVE WITH INFALLIBLE EVIDENCE THAT THE PURCHASES ARE GENUINE AND - THE MATERIAL WAS RECEIVED BY THE APPELLANT FROM THESE PARTIES. BUT, THE APPELLANT IS NOT ABLE TO PRODUCE ANY EVIDENCE WHATSO EVER EITHER BEFORE THE AO OR EVEN IN THE PRESENT PROCEEDINGS TO PROVE THAT THE GOODS IN TERMS OF QUANTITY AND QUALITY FROM THE ABOVE SAID PARTIES WERE ACTUALLY RECEIVED BY THE APPELLANT. THE APPELLANT HAS NOT PRODUCED COPIES OF THE CONSIGNMENTS, IF ANY, R ECEIVED FROM THE TRANSPORT CONTRACTOR SHOWING THAT THE MATERIAL PURCHASED FROM THE CONSIGNORS WAS ACTUALLY DELIVERED TO THE APPELLANT AND FREIGHT HAS BEEN PAID THEREON. THE APPELLANT IS ALSO NOT ABLE TO PROVIDE COPIES OF THE CRN EVIDENCING THE RECEIPT/DELI VERY OF THE GOODS ALONG WITH THE RELEVANT PURCHASE ORDERS IN RESPECT OF IMPUGNED PURCHASES. THE APPELLANT IS ALSO NOT ABLE TO PRODUCE GOODS CONSIGNMENT NOTE, TRANSPORT BILLS AND THE DELIVERY CHALLANS ISSUED BY THE PARTIES OR OCTROI RECEIPTS ISSUED TO SUBST ANTIATE DELIVERY OF GOODS TO THE APPELLANT. THUS, THE APPELLANT HAS NOT BROUGHT ON RECORD ANY INDEPENDENT AND RELIABLE EVIDENCE TO PROVE COMPLETE TRAIL - SO FAR AS MOVEMENT OF CONSIGNMENT FROM THE SAID PARTIES TO THE PLACE OF THE APPELLANT IS CONCERNED. THE APPELLANT IS NOT ABLE TO PROVE THE MOVEMENT OF CONSIGNMENT FROM THE CONSIGNORS AND DELIVERY OF GOODS TO THE APPELLANT IN CASE OF ALLEGED PURCHASES FROM THE ABOVE PARTIES. IN SUCH CIRCUMSTANCES MERELY BECAUSE THE PAYMENT TOWARDS THE IMPUGNED PURCHASES WERE MADE BY ACCOUNT PAYEE CHEQUES, IT DOES NOT ESTABLISH THAT THE TRANSACTIONS AND THE PURCHASES ARE GENUINE AND THE APPELLANT RECEIVED DELIVERY OF THE GOODS. 6.4 IN THE APPELLANT'S CASE, NOTICES ISSUED U/S 133(6) OF THE ACT WERE RETURNED UNSERVED. APART FRO M THAT, THE FACT REMAINS THAT THERE WAS OVERWHELMING EVIDENCE IN THE FORM OF STATEMENT OF SUPPLIERS GIVEN BEFORE THE SALES TAX AUTHORITIES THAT THEY WERE ENGAGED ONLY IN ISSUING HAWALA BILLS AND NO GOODS WERE EVER SUPPLIED BY THEM. AFTER WEIGHING THE EVIDE NCES PROS AND CON, I FIND THAT THE APPELLANT FAILED TO RECONCILE THE PURCHASES WITH THE ITEMS SOLD AND 1:1 RECONCILIATION COULD NOT BE MADE. ONUS IS ALWAYS ON THE APPELLANT TO PROVE AS TO HOW THE MATERIAL PURCHASED WAS FIRSTLY OBTAINED. I RECORD A FINDING OF FACT HERE THAT NO ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 5 PROOF OF DELIVERY OF PURCHASES HAS BEEN FILED' EITHER BEFORE THE LD. AO OR BEFORE ME. DURING THE PRESENT PROCEEDINGS, LD. AR WAS SPECIFICALLY ASKED WHETHER THE PARTIES CAN BE PRODUCED NOW FOR VERIFICATION BEFORE THE AO, FOR WHICH THE A R EXPRESSED HIS INABILITY TO DO SO. THUS, IT CAN BE SAFELY PRESUMED THAT EITHER THEY ARE NON - EXISTENT OR EVEN IF THEY DID EXIST, THEY WERE NOT BACKED BY SUFFICIENT EVIDENCE TO UNDERGO THE TEST OF SCRUTINY. 6.5 IT IS ALSO A SETTLED LEGAL PROPOSITION THAT IF NO EVIDENCE IS GIVEN BY THE PARTY ON WHOM THE BURDEN IS CAST, THE ISSUE MUST BE FOUND AGAINST HIM. THEREFORE, ONUS IS ALWAYS ON A PERSON WHO ASSERTS A PROPOSITION OR FACT, WHICH IS NOT SELF - EVIDENT. HOWEVER, IN THE INSTANT CASE, THE APPELLANT HAS MISERABL Y FAILED TO LEAD EVIDENCE AND HENCE, ONUS IS A DETERMINING FACTOR. 6.6 LD. AO ADDED AN AMOUNT OF RS.57,42,227/ - BEING 12.5% OF THE TOTAL NON - GENUINE PURCHASES OF RS.4,59,37,8147 - , TO THE TOTAL INCOME OF THE ASSESSEE RELYING ON TWO CASES CITED ABOVE. THUS, THE ISSUE WOULD BOIL DOWN WHETHER THE ELEMENT OF PROFIT ADOPTED BY THE AO @12.5% TREATING THE SAME AS THE PROFIT ELEMENT EMBEDDED IN SUCH BOGUS PURCHASES, WHICH THE APPELLANT WOULD HAVE MADE FROM SOME UNKNOWN ENTITIES IS CORRECT OR NOT. GUJARAT HIGH COU RT IN THE CASE OF BHOLANATH POLY FAB PVT. LTD. 355 ITR 290 (GUJ), THE CASE RELIED UPON BY THE AO, THE HON'BLE COURT WAS BATTLING WITH THE FINDING OF HON'BLE ITAT THAT PURCHASES WERE MADE FROM BOGUS PARTIES SINCE NOTICE ISSUED BY THE A.O, TO THESE PARTIES W ERE ALLEGEDLY RECEIVED RETURNED/UNSERVED' AND THE ASSESSEE WAS UNABLE TO PRODUCE ANY CONFIRMATION FROM THESE PARTIES. THE TRIBUNAL HAD HELD THAT THOUGH PURCHASES WERE MADE FROM BOGUS PARTIES, NEVERTHELESS, THE PURCHASES THEMSELVES WERE NOT BOGUS AS THE E NTIRE QUANTITY OF .OPENING STOCK, PURCHASES AND SALES WERE TALLYING AND HENCE, ONLY THE PROFIT MARGIN EMBEDDED IN SUCH AMOUNT WOULD BE SUBJECTED TO TAX. THE HON'BLE GUJARAT HIGH COURT TAKING COGNIZANCE OF THE FACT HELD THAT WHETHER PURCHASES THEMSELVES WER E BOGUS OR WHETHER PARTIES FROM WHOM SUCH PURCHASES WERE MADE WERE BOGUS, IS ESSENTIALLY A QUESTION OF FACT AND THE TRIBUNAL HAVING EXAMINED THE EVIDENCE ON RECORD AND CONCLUDED THAT THE ASSESSEE DID PRODUCE CLOTH AND SELL FINISHED GOODS, THE ENTIRE AMOUNT COVERED UNDER SUCH PURCHASE WOULD NOT BE SUBJECTED TO TAX AND ONLY THE PROFIT ELEMENT EMBEDDED THEREIN WAS TO BE TAXED. WHILE COMING TO THE ABOVE CONCLUSION, THE HON'BLE HIGH COURT ALSO RELIED ON THE DECISION IN THE CASE OF SANJAY OIL CAKE IND. 316 ITR 27 4 (GUJ). 6.7 IN SANJAY OILCAKE INDUSTRIES V. COMMISSIONER OF INCOME - TAX [2009] 316 ITR 274 (GUJ), IT WAS HELD AS UNDER: '12, THUS, IT IS APPARENT THAT BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE CONCURRENTLY ACCEPTED THE FINDING OF THE ASSESSING OFFICER THAT THE APPARENT SELLERS WHO HAD ISSUED SALE BILLS WERE NOT ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 6 TRACEABLE. THAT GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED BILLS FOR SUCH GOODS. THOUGH THE PURCHASES ARE SHOWN TO HAVE BEEN MADE BY MAKIN G PAYMENT THEREOF BY ACCOUNT PAYEE CHEQUES, THE CHEQUES HAVE BEEN DEPOSITED IN HANK ACCOUNTS OSTENSIBLY IN THE NAME OF THE APPARENT SELLERS, THEREAFTER THE ENTIRE AMOUNTS HAVE BEEN WITHDRAWN BY BEARER CHEQUES AND THERE IS NO TRACE OR IDENTITY OF THE PERSON WITHDRAWING THE AMOUNT FROM THE BANK ACCOUNTS. IN THE LIGHT OF THE AFORESAID NATURE OF EVIDENCE IT IS NOT POSSIBLE TO RECORD A DIFFERENT CONCLUSION, DIFFERENT FROM THE ONE RECORDED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL CONCURRENTLY HOLDING THAT T HE APPARENT SELLERS WERE NOT GENUINE, OR WERE ACTING AS CONDUIT BETWEEN THE ASSESSEE - FIRM AND THE ACTUAL SELLERS OF THE RAW MATERIALS. BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE, THEREFORE, COME TO THE CONCLUSION THAT IN SUCH CIRCUMSTANCES, THE LIKELIHOOD OF THE PURCHASE PRICE BEING INFLATED CANNOT BE RULED OUT AND THERE IS NO MATERIAL TO DISLODGE SUCH FINDING. THE ISSUE IS NOT WHETHER THE PURCHASE PRICE REFLECTED IN THE BOOKS OF ACCOUNT MATCHES THE PURCHASE PRICE STATED TO HAVE BEEN PAID TO OTHE R PERSONS. THE ISSUE IS WHETHER THE PURCHASE PRICE PAID BY THE ASSESSEE IS REFLECTED AS RECEIPTS BY THE RECIPIENTS THE ASSESSEE HAS, BY SET OF EVIDENCE AVAILABLE ON RECORD, MADE IT POSSIBLE FOR THE RECIPIENTS NOT BEING TRACEABLE FOR THE PURPOSE OF INQUIRY AS TO WHETHER THE PAYMENTS MADE BY THE ASSESSEE HAVE BEEN ACTUALLY RECEIVED BY THE APPARENT SELLERS. HENCE, THE ESTIMATE MADE BY THE TWO APPELLATE AUTHORITIES DOES NOT WARRANT INTERFERENCE. EVEN OTHERWISE, W HETHER THE ESTIMATE SHOULD BE AT A PARTICULAR SU M OR AT A DIFFERENT SUM, CAN NEVER BE AN ISSUE OF LAW.' 6.8 SIMILARLY, IN THE OTHER DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT SHETH 356 ITR 290 (GUJ), RELIED UPON BY THE AO FOR MAKING THE ADDITION, HON'BLE COURT WAS SEIZED WITH T HE SIMILAR ISSUE WHERE THE AO HAD FOUND THAT SOME OF THE ALLEGED SUPPLIERS OF STEEL TO THE ASSESSEE HAD NOT SUPPLIED ANY GOODS BUT HAD ONLY PROVIDED SALE BILLS AND HENCE, PURCHASES FROM THE SAID PARTIES WERE HELD TO BE BOGUS. THE AO, IN THAT CASE ADDED THE - ENTIRE AMOUNT OF PURCHASES TO GROSS PROFIT OF THE ASSESSEE. LD. CIT (A) HAVING FOUND THAT THE ASSESSEE HAD INDEED PURCHASED THOUGH NOT FROM NAMED PARTIES BUT OTHER PARTIES FROM GREY MARKET, PARTIALLY SUSTAINED THE ADDITION AS PROBABLE PROFIT OF THE ASSESS EE. THE TRIBUNAL HOWEVER, SUSTAINED THE ADDITION TO THE EXTENT OF 12.5%. TAKING INTO ACCOUNT THE ABOVE FACTS, THE HON'BLE GUJARAT HIGH COURT HELD THAT SINCE THE PURCHASES WERE NOT BOGUS, BUT WERE MADE FROM PARTIES OTHER THAN THOSE MENTIONED IN BOOKS OF ACC OUNTS, ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES COULD BE ADDED TO THE ASSESSEE'S INCOME AND AS SUCH NO QUESTION OF LAW AROSE IN SUCH ESTIMATION. WHILE ARRIVING AT THE ABOVE CONCLUSION, THE HON'BLE COURT ALSO RELIED ON THE DECISION IN THE CASE OF VIJAY M. MISTRY CONSTRUCTION LTD. 355 ITR 498 (GUJ) AND FURTHER APPROVED THE DECISION OF AHMEDABAD BENCH, ITAT IN THE CASE OF VIJAY PROTEINS 58 ITD 428. ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 7 6.9 AO RELYING ON THE DECISIONS OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF BHOLE NATH POLYFAB PVT LT D VS GT 355 I TR 290 AND CIT VS. SIMIT SHETH 356 ITR 451 (GUJ) DISCUSSED IN THE ABOVE PARAS, ESTIMATED THE ADDITION @12.5% OF THE TOTAL BOGUS PURCHASE. THE FACTS AND THE LINE OF BUSINESS OF THE APPELLANT IN THE PRESENT CASE ARE EXACTLY SIMILAR TO THE CASE O F SIMITH P. SHETH (SUPRA). THIS IS IN ADDITION TO THE PROFIT ALREADY DECLARED BY THE APPELLANT IN THE NORMAL COURSE OF BUSINESS FOR THE BENEFIT HE GOT FROM THE GREY MARKET OPERATIONS IN THE FORM OF TAXES NOT PAID AND ADDITIONAL PROFIT MARGIN TOWARDS GREY M ARKET AND THE SAME IS NOT DOUBLE TAXES ON THE TURNOVER AS STATED BY THE APPELLANT IN THE GROUNDS OF APPEAL. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE CITED DECISION, THE ACTION OF THE AO IN ESTIMATING THE % ON THE TOTAL PURCHASES FROM THE NINETEEN PARTIE S IS CONFIRMED. ACCORDINGLY, G ROUND NO. 1 & 2 OF THE APPEAL IS TREATED AS 'DISMISSED'. 6. ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. SIMILAR VIEW HAS BEEN TAKEN BY THE AO AND CIT(A) FOR THE A.Y.2010 - 11 AND 2011 - 12. SIMILAR IS THE FINDINGS OF LOWER AUTH ORITIES IN THE CASE OF LALITA B KANUNGO IN ALL THE THREE YEARS. 8. IN THE CASE OF LALITA B KANUNGO, SURVEY U/S.133A WAS CONDUCTED. DURING COURSE OF SURVEY CERTAIN DOCUMENTS / BOOKS OF ACCOUNTS WERE FOUND IMPOUNDED . IT WAS OBSERVED THAT THESE ARE INCRIMINAT ING IN NATURE WHICH REQUIRES FURTHER INVESTIGATION, THEREFORE, SAME WERE IMPOUNDED U/S.133A(3)(IA) OF THE IT ACT. LIST OF THESE DOCUMENTS WERE ANNEXED AS PER ANNEXURE - A. IT WAS CONTENTION OF LEARNED AR THAT AO HAS NOT FURNISHED THE DOCUMENTS IMPOUNDED DURI NG THE COURSE OF SURVEY, THEREFORE, ASSESSEE WAS UNABLE TO FURNISH THE DETAILS ASKED BY THE AO. 9. ON THE OTHER HAND, CONTENTION OF LEARNED DR WAS THAT THE TRANSPORTATION BILL, DELIVERY CHALLANS ETC., WERE NOT FOUND DURING COURSE OF SURVEY, THEREFORE, THER E WAS NO QUESTION OF THE SEIZURE IMPOUNDING OF THESE DOCUMENTS AND PROVIDING COPY OF THE SAME TO THE ASSESSEE. HE INVITED OUR ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 8 ATTENTION TO PAGE 99 & 95 WHEREIN ANNEXURE OF THE DOCUMENTS IMPOUNDED DURING SURVEY WERE PLACED. 10. LEARNED AR CONTENDED THAT MAT TER SHOULD BE RESTORED BACK TO THE FILE OF AO SO THAT ASSESSEE CAN FURNISH PROPER EXPLANATION WITH REGARD TO THE ALLEGED BOGUS PURCHASES, THE TRANSPORTATION BILL, DELIVERY CHALLANS ETC., 11. LEARNED AR ALSO PLACED ON RECORD THE ORDER OF THE CO - ORDINATE BE NCH WHEREIN CREDIT WAS GIVEN FOR THE GP RATE ALREADY SHOWN BY THE ASSESSEE WHILE ESTIMATI N G ADDITION OF 12.5% OF THE ALLEGED BOGUS PURCHASES. 12. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . SO FAR RE OPENING IS CONCERNED, WE FOUND THAT REASONS RECORDED BY AO WERE SOUND FOR REOPENING THE ASSESSMENT IN SO FAR AS AO HAD SUFFICIENT REASON TO BELIEVE THAT THERE WAS ESCAPEMENT OF INCOME IN THE FORM OF BOGUS PURCHASE. FROM RECORD WE FOUND THAT DURING THE COUR SE OF SURVEY, THE AO HAS FOUND THAT ASSESSEE HAS TAKEN BOGUS BILLS FROM THE NON - GENUINE SUPPLIERS. AFTER ISSUING NOTICE U/S.133(6) TO ALL THE SUPPLIERS, HE CAME TO THE CONCLUSION THAT THESE SUPPLIERS DID NOT EXIST AND ALSO DID NOT APPEAR BEFORE THE AO, ACC ORDINGLY, HE CONCLUDED THAT PURCHASES WERE NOT GENUINE AND HE ADDED 12.5% OF SUCH PURCHASES WHICH WERE CONFIRMED BY THE CIT ( A) AFTER GIVING DUE REASONING. THE CONTENTION OF LEARNED AR IS THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO IS NOT ACCE PTABLE IN VIEW OF THE FACT THAT NEITHER ASSESSEE HAS ALLEGED BEFORE THE AO FOR GIVING COPY OF THE DOCUMENTS IMPOUNDED NOR IN THE STATEMENT OF FACTS FIL ED BEFORE THE CIT(A). THERE IS NO ALLEGATION BY THE ASSESSEE BEFORE AO THAT COPY OF IMPOUNDED DOCUMENTS WERE NOT SUPPLIED TO THE ASSESSEE ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 9 SO AS TO ENABLE IT TO FURNIS H THE REQUIRED DETAILS. E VEN BEFORE THE CIT(A), THERE IS NO SUCH REQUEST MADE BY THE ASSESSEE, THEREFORE, CONTENTION OF LD. AR TO RESTORE THE MATTER BACK TO THE FILE OF THE AO IS NOT ACCEPTABLE AT ALL. SO FAR AS GIVING OF CREDIT OF THE GP RATE ALREADY DECLARED BY THE ASSESSEE IS CONCERNED, THE AR PLACED ON RECORD THE ORDER OF THE CO - ORDINATE BENCH IN CASE OF RATNAGIRI STAINLESS PVT. LTD., ITA NO.4463/MUM/2016 DATED 04/04/2017 WHEREIN MATTER WAS R ESTORED BACK TO THE FILE OF THE AO WITH THE FOLLOWING DIRECTIONS: IN THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2008 - 09, THE ASSESSEE EARNED GP RATIO OF 4.3% ON TOTAL TURNOVER , WHILE FOR THE YEAR UNDER CONSIDERATION GP RATIO EARNED WAS 5.45%. I N OUR CONSIDERED VIEW AND BASED ON FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED BY US IN DETAILS ABOVE, END OF JUSTICE WILL BE MET IN THIS CASE IF GP RATIO OF 12.5% ON ALLEGED BOGUS PURCHASES IS ADDED TO INCOME OF THE ASSESSEE AGAINST WHICH CREDIT FOR THE DECLARED GP RATIO ON THE ALLEGED BOGUS PURCHASES WILL BE GRANTED BY THE AO AFTER VERIFICATION BY THE AO BECAUSE OF FAILURE OF THE ASSESSEE TO COME FORWARD TO DISCHARGE PRIMARY ONUS CAST UPON HIM AS DETAILED ABOVE FOR WHICH ASSESSEE IS TO BE BLAMED AND IN THE MIDST OF AFORE - STATED UN - REBUTTED ALLEGATION AGAINST THE ASSESSEE AND NON DISCHARGE OF PRIMARY ONUS, THE DECLARED LOWER GP RATIO OF 5.45% IN THE INSTANT PREVIOUS YEAR UNDER APPEAL CANNOT BE ACCEPTED. THUS, IN NUT - SHELL WE ARE INCLINED TO ADOPT GP RA TIO OF 12.5% ON ALLEGED BOGUS PURCHASES IN THE INSTANT CASE WHICH IN OUR CONSIDERED VIEW IS FAIR, REASONABLE AND RATIONAL KEEPING IN VIEW FACTUAL MATRIX OF THE CASE , WHILE THE ASSESSEE SHALL BE GRANTED CREDIT OF GP RATIO DECLARED ON THESE BOGUS PURCHASES IN THE RETURN OF INCOME FILED WITH THE REVENUE. THE ASSESSEE GETS PART RELIEF. WE ORDER ACCORDINGLY 13. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRESH IN TERMS OF THE OBSERVATION MADE BY THE TRIBUNAL IN CASE OF RATNAGIRI STAINLESS PVT. LTD., (SUPRA). WE DIRECT ACCORDINGLY. ITA NO. 3410/MUM/2017 AND OTHER APPEALS BABULAL B KANUNGO 10 14. IN THE RESULT, ALL THE APPEALS OF BOTH THE ASSESSEE S ARE ALLOWED IN PART FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 / 03 /201 8 SD/ - ( RAM LAL NEGI ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 14 / 03 /201 8 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//