DCIT 15(3)(1), MUMBAI V. TECHNO INFRACON P.LTD, MUMBAI

ITA 3705/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9699 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

ITA NO.3705/M/2017 TECHNO INFRACON PRIVATE LIMITED ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3705/MUM/2017 ( / ASSESSMENT YEAR: 2010-11) DEPUTY COMMISSIONER OF INCOME TAX 15(3)(1) R.NO.451,4 TH FLOOR AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 / VS. TECHNO INFRACON PVT. LTD . H-220,2 ND FLOOR, IIP ABOVE VASHI RAILWAY STATION, VASHI NAVI MUMBAI 400 703 ./ ./PAN/GIR NO. AACCT-8276-E ( ! /APPELLANT ) : ( '#! / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 07/09/2017 / DATE OF PRONOUNCEMENT : 08 /09/2017 ITA NO.3239/M/2017 SUNJYOT GEMS ASSESSMENT YEAR 2007-08 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2010- 11 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)- 24 [CIT(A)], MUMBAI DATED 10/02/2017 QUA RELIEF PROVIDED TO ASSESSEE AGAINST CERTAIN BOGUS PURCHASES. NONE HAS APPEARED FOR ASSESSEE DESPITE NOTICE. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AF TER HEARING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS CIVIL CONTRACTOR, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 16/12/2015 AT RS.1,82,93,853/- AFTER ADDITION OF CERTAIN BOGUS PURCHASES FOR RS.84,91,599/-. THE ORIGINAL RETURN OF INCOME WAS FILED ON 15/10/2010 AT RS.98,02,250/- WHICH WAS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASES BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.84,91,599/- FROM ELEVEN PARTIES. CONSEQUENTLY, N OTICE U/S 148 DATED 19/03/2015 WAS ISSUED TO THE ASSESSEE WHICH WAS FOL LOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1). 2.3 THE ASSESSEE PRODUCED LEDGER EXTRACTS, INVOICES, DELIVERY CHALLANS, BANK STATEMENTS REFLECTING PAYMENT TO SAI D PARTIES ETC. AND ITA NO.3239/M/2017 SUNJYOT GEMS ASSESSMENT YEAR 2007-08 3 CONTENDED THAT THE PURPOSES WERE GENUINE. HOWEVER L D. AO NOTED THAT THE ASSESSEE COULD NEITHER PRODUCE ANY OF THE PARTY NOR FILED ANY CONFIRMATION TO SUBSTANTIATE THE TRANSACTIONS AND H ENCE, THE PURCHASES WERE BOGUS PURCHASES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 10/02/2 017 WHERE LD. CIT(A) NOTED THAT THE CONSUMPTION OF MATERIAL AND T URNOVER WAS NOT DISPUTED BY THE REVENUE. FINALLY, PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN CIT VS. SIMIT P. SHETH [2013 38 TAXMANN.COM 385] , THE IMPUGNED ADDITIONS WERE RESTRICTED TO 12.5%. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DR PLACED RELIANCE ON THE FINDINGS OF LD . AO AND CONTENDED THAT FULL ADDITIONS WERE JUSTIFIED SINCE ASSESSEE COULD NOT FURNISH REQUISITE CONFIRMATIONS. 5. WE HAVE HEARD THE CONTENTIONS AND PERUSED RELEVA NT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE / CONSUMPTION OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS WHICH WAS MATERIAL IN TENSIVE AND COULD NOT BE CARRIED OUT WITHOUT CONSUMPTION OF MATERIAL. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY T HE REVENUE AND THE PAYMENTS WERE THROUGH BANKING CHANNELS. THE PURCHAS ES WERE BACKED BY INVOICES. AT THE SAME TIME, THE ASSESSEE COULD N OT SUBSTANTIATE ACTUAL DELIVERY OF MATERIAL AND ALSO COULD NOT PROD UCE ANY CONFIRMATIONS ETC. FROM THE ALLEGED BOGUS SUPPLIERS , WHICH CAST SERIOUS DOUBT ON ITA NO.3239/M/2017 SUNJYOT GEMS ASSESSMENT YEAR 2007-08 4 ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, T HE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EM BEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEME NT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. C IT(A) HAS RIGHTLY DONE. THEREFORE, FINDING THE SAME TO BE VERY FAIR A ND REASONABLE, WE CONFIRM THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH SEPTEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08. 09.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. '%- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI