ITO-15(3)(1), MUMBAI V. TECHEDGE AIR ENGINEERING PVT. LTD, MUMBAI

ITA 37/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7485 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 03-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 37 /M UM /20 19 ASSESSMENT YEAR: 2010 - 11 ITO - 15(3 )(1), MUMBAI VS. M / S. TECHEDGE AIR ENGINEERING PV T. LTD. 5 TH FLOOR, SIDDESHWAR ARCADE, OPP. SURAJ WATERPARK, GHODBUNDER ROAD, THANE, MUMBAI, PIN - 400615 . PAN: AACCT1710F (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY : R. BHOOPATI, CIT - DR RESPONDENT BY : NONE DATE OF HEARING : 09 .01.2020 DATE OF PRONOUNCEMENT : 29 .01 . 20 20 O R D E R PER RAJESH KUMAR , ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 17.09 .2018 OF THE COMMISSIONER OF INCOME TAX (AP PEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010 - 11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL IS AGAINST THE ORDER OF CIT(A) RESTRICTING THE BOGUS PURCHASE ADDITION TO 25% AS AGAINST 100% ADDITION BY T HE AO OF RS. 26,43,839/ - . 3. AT THE TIME OF HEARING NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED TO ATTEND THE HEARING NO R ANY ADJOURNMENT ITA NO.37/MUM/2019 M/S. TECHEDGE AIR ENGINEERING PVT. LTD. 2 APPLICATION WAS RECEIVED DESPITE OF SERVING OF NOTICE THROUGH RPAD . T HEREFORE, WE ARE PROCEEDING TO DECIDE THIS APPEAL ON MERITS AFTER HEARING THE LD. DR. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 08.12.2017 DECLARING TOTAL INCOME OF RS. 17,15,655 / - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER THE AO RECEIVED INFORMATION FROM DGIT (INV.), MUMBAI THAT THE ASSESSEE IS BENEFICIARY OF HAWALA PURCH ASE ENTRIES TO THE TUNE OF RS. 26,43,839 / - AND ACCORDINGLY REASONS WERE RECORDED FOR ISSUING A NOTICE U/S 148 OF THE ACT . THE AO ISSUED SHOW - CAUSE NOTICE TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASE BY FURNISHING DETAILS OF PURCHASES, BI;;S ,VOUCHERS AND PAYMENT DETAILS FAILING WHICH WHY THE SAME SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY THE ASSESSEE FILED A COPY OF BILLS, VOUCHERS AND OTHER EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES. HOWEVER THE REPLY OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO. T HE AO OBSERVED THAT THE ASSESSEE HAS MADE SALES CORRESPONDING TO THE BOGUS PURCHASES AND THEREFORE PRESUMED THAT THE ASSESSEE HAS MADE PURCHASES FROM THE GREY MARKET AT LOWER RATES AND AFTER RELYING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. 350 ITR 651(BOMBAY) AND RAM BAHADUR THAKUR LTD., 261 ITR 390 TREATED T HE PURCHASES AS NON GENUINE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY MAKING AN ADDITION OF RS.26,43,839/ - BY FRAMING A SSESSMENT U/S 143(3) R.W.S. 147. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY R ESTRICTING THE ADDITION TO 25% OF THE ALLEGED BOGUS PURCHASES AND THUS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AFTER TAKING INTO ACCOUNT THE CONTENTIONS AND SUBMISSIONS MADE BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS AND ITA NO.37/MUM/2019 M/S. TECHEDGE AIR ENGINEERING PVT. LTD. 3 BY FOLLOWING THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED IN 356 ITR 451 . 5. AFTER HEARING THE LD. DR AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE UNDISPUTED FACTS ARE THAT THE ASSESSEE W AS BENEFICIARY OF HAWALA PURCHASES ENTRIES TO THE TUNE OF RS.26,43,839/ - . THOUGH THE ASSESSEE HAS TRIED TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE PURCHASES BY FILING THE DETAILS OF PURCHASES , BILLS ,VOUCHERS AND BANK STATEMENT ETC HOWEVER THE AO WAS NOT SATISFIE D QUA THE GENUINENESS AS THESE WERE MADE FROM HAWAL A DEALERS AS BROUGHT OUT BY THE SALES TAX DEPARTMENT GOVT . OF MAHARASHTRA THEREBY MAKING AN ADDITION OF RS.26,43,839/ - . WE NOTE THAT THE AO HAS NOT DOUBT ED THE GENUINENESS OF THE SALES . T HE LD. CIT(A ) RE DUCED THE SAID ADDITION BY APPLYING 25 % ON BOGUS PURCHASES BOGUS PURCHASES BY FOLLOWING THE DECISION OF CIT VS. SIMIT P. SHETH (SUPRA) . THE LD CIT(A) HAS SUSTAINED THE ADDITION EQUAL TO 25% WHICH IS ON THE HIGHER SIDE HOWEVER THE ASSESSEE IS NOT IN APPEAL AGAINST THE ORDER OF APPELLATE AUTHORITY. WE ARE THEREFORE INCLINED TO UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE BY DISMISSING THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 29.01 . 20 20 . SD/ - SD/ - ( SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 29 .01 . 2020 . RS , SR. P.S. ITA NO.37/MUM/2019 M/S. TECHEDGE AIR ENGINEERING PVT. LTD. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : YES/NO (AS THE ORDER HAS BEEN TYPED WITH THE HELP OF MANUSCRIPT) 1. DRAFT DICTATED ON SR.PS 2. DRAFT PLACED BEFORE AUTHOR SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.P S 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER