PRINT SERVICES, MUMBAI V. ASST CIT CIR 21(2), MUMBAI

ITA 3430/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2893 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA S ANJARIA LD
• Assessee Lawyers: DR P DANIEL LD
• Keywords: Bogus purchase
• Section: 143(3); 147

Judgement Text

ITA.NO.3430/MUM/2017 PRINT SERVICES ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3430/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) PRINT SERVICES 212, SHAH AND NAHAR INDUSTRIAL ESTATE SITARAM JADHAV MARG, LOWER PAREL MUMBAI-400 013 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-21(2) ROOM NO.116, 1 ST FLOOR PIRAMAL CHAMBERS MUMBAI-400 012 ./ ./PAN/GIR NO. AAIFP-0754-G ( ! /APPELLANT ) : ( '#! / RESPONDENT ) ASSESSEE BY : DR.P. DANIEL, LD. AR REVENUE BY : CHAITANYA S. ANJARIA, LD. DR / DATE OF HEARING : 15/10/2018 / DATE OF PRONOUNCEMENT : 02/11/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-33 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-33/RG.21/171/2015-16 DATED 17/02/2017 QUA CONFIRMATION OF CERTAIN ADDITION OF RS.13.02 LACS ON ITA.NO.3430/MUM/2017 PRINT SERVICES ASSESSMENT YEAR 2009-10 2 ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-21 (2), MUMBAI [AO] U/S 143(3) READ WITH SECTION 147 ON 23/04/2015 WHEREIN THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.132.1 3 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS. 51.10 LACS FILED BY THE ASSESSEE ON 23/09/2009 WHICH WAS PROCESSED U/S 143(1). THE ASSESSEE BEING RESIDENT FIRM WAS ENGAGED IN THE BUSINESS OF PRINTING. 2. PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN PROCURING BOGUS BILLS, IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF ALLEGED BOGUS PURCHASES TO THE TUNE OF RS.52.10 LACS FROM TWO ENTITIES, TH E DETAILS OF WHICH HAS ALREADY BEEN EXTRACTED IN QUANTUM ASSESSM ENT ORDER. THE CONFIRMATION LETTERS RECEIVED FROM THESE TWO SUPPLI ERS WERE FOUND TO BE FORGED AND NON-GENUINE . THE ASSESSEE COULD NOT PRODUCE ANY OF THESE SUPPLIERS TO CONFIRM THE TRANSACTIONS, WHICH LED TH E LD. AO TO DISALLOW THE SAME AND ADD BACK THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFOR FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATE 17/02/2017 WHEREIN LD. CIT(A), RELYING UPON VARIOUS JUDICIAL P RONOUNCEMENTS, RESTRICTED THE ADDITIONS TO 25% OF ALLEGED BOGUS PURCHASES WHICH CAME TO RS.13.02 LACS . AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE [AR] FOR ASSES SEE, DR. P. DANIEL, RAISED THE SOLE CONTENTION THAT KEEPING IN VIEW TH E OVERALL FACTUAL MATRIX, THE ESTIMATION WAS ON THE HIGHER SIDE. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE [DR] SUBMITTED THAT NO FURTHER RELIEF COULD BE GRANTED TO THE ASSESSEE. ITA.NO.3430/MUM/2017 PRINT SERVICES ASSESSMENT YEAR 2009-10 3 5. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ASS ESSEE WAS IN POSSESSION OF PRIMARY PURCHASES DOCUMENTS. THE TURN OVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE A ND THE PAYMENTS WERE THROUGH BANKING CHANNELS. AT THE SAME TIME, T HE ASSESSEE COULD NOT SUBSTANTIATE THE DELIVERY OF MATERIAL AND FAILE D TO PRODUCE ANY OF THE PARTY FOR CONFIRMATION OF ACCOUNTS. THE CONFIRMATOR Y LETTERS RECEIVED WERE FOUND TO BE FORGED & NON-GENUINE. ALL THESE FACTORS CAST A SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SIT UATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEM ENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY M ARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHTLY DONE. HOWEVER, KEEPING IN VIEW THE OVERALL FACTUAL MATRIX, THE ESTIMATION OF 25%, IN OUR OPINION, IS ON THE HIGHER SIDE AND THEREFORE, WE RESTRICT THE SAME TO 12.5% OF ALLEGED BOGUS PURCHASES WHICH COMES TO RS.6,51,300/-. THE IMPUGNED ORDER STAND MODIFIED TO THAT EXTENT. 6. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND NOVEMBER, 2018. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/11/2018 SR.PS:-THIRUMALESH/JV, SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT ITA.NO.3430/MUM/2017 PRINT SERVICES ASSESSMENT YEAR 2009-10 4 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +,' % - , - , / DR, ITAT, MUMBAI 6. ,./ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI