ITO 21(1)(2), MUMBAI V. BANWARILAL LALLAN VISHWKARMA, MUMBAI

ITA 3866/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1454 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Tax effect; Reassessment proceedings
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 3866 / / 2019 (%. .2010-11 ) ITA NO. 3866/MUM/2019 (A.Y.2010-11) INCOME TAX OFFICER-21(1)(2), ROOM NO.104, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. / VS. : / APPELLANT BANWARILAL LALLAN VISHWKARMA, 15, AKANSHA APT. VEER NARIMAN ROAD, PRABHADEVI, MUMBAI 400 025 PAN: ABQPV 6782R : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY J. SETHI / DATE OF HEARING : 01/12/2020 / DATE OF PRONOUNCEMENT : 01/12/2020 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI ( IN SHORT THE CIT (A)) DATED 26/03/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF INTERIOR WORKS CONTRACTS . ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF M AHARASHTRA BY THE DIRECTOR GENERAL OF INCOME TAX (INVESTIGATION) THAT THE AS SESSEE HAS INDULGED IN OBTAINING 2 ITA NO. 3866/MUM/2019 (A.Y.2010-11) BOGUS PURCHASE BILLS AMOUNTING TO RS.68,458/- FROM DECLARED HAWALA DEALERS, THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT Y EAR 2010-11 WAS REOPENED. IN REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MAD E ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27/03/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX A CT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE RESTRIC TED THE ADDITION TO RS.20,537/- I.E. 30% OF THE BOGUS PURCHASES. AGAINST THE FINDINGS O F CIT(A), THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE. 3. SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTME NT SUBMITTED THAT THOUGH THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY LIMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CASE OF ASSESSEE FALLS UNDER EXCEPTION SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT T HE ASSESSEE COULD NOT PROVE GENUINENESS OF THE PURCHASES. THE ASSESSEE COULD N EITHER PRODUCE THE PARTIES FROM WHOM GOODS WERE ALLEGEDLY PROCURED NOR THE NOTICE S ISSUED TO THE SAID PARTIES UNDER SECTION 133(6) COULD BE SERVED ON THE ADDRESS FURNISHED BY ASSESSEE. THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING TH E GENUINENESS OF PURCHASES AND THE SUPPLIERS OF GOODS. 4. SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESENTATI VE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. A PERUSAL OF ASSESSM ENT ORDER SHOWS THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASES IN QUESTION. HOWEVER, THE SALES DECLARED BY THE ASSESSEE WERE NOT DISPUTE D BY THE ASSESSING OFFICER. WITHOUT PURCHASE, THERE CANNOT BE SALES. THE CIT(A ) IN FIRST APPELLATE PROCEEDINGS HAS OBSERVED THAT THE ASSESSEE MIGHT HAVE PROCURED GOODS FROM GREY MARKET AND HAD OBTAINED BILLS FROM HAWALA OPERATORS. IN SU CH LIKE TRANSACTIONS IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN THE TRANSACTIONS THAT HAS TO BE BROUGHT TO TAX. 3 ITA NO. 3866/MUM/2019 (A.Y.2010-11) CONSEQUENTLY, THE CIT(A) RESTRICTED THE ADDITION TO 30% OF SUCH PURCHASES. UNDISPUTEDLY, THE SALES DECLARED BY ASSESSEE HAVE B EEN ACCEPTED DISPUTED BY THE REVENUE, ERGO, ENTIRE ALLEGED BOGUS PURCHASES CANNO T BE ADDED. I FIND NO INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND T HE APPEAL OF REVENUE IS DISMISSED. 5. NO APPEAL/CROSS OBJECTIONS FILED BY THE ASSESSEE AG AINST THE ORDER OF CIT(A) HAS BEEN BROUGHT TO THE NOTICE OF BENCH. IN CASE ANY APPEAL/CROSS OBJECTIONS BY THE ASSESSEE AGAINST IMPUGNED ORDER OF CIT(A) IS NO TICED,, THEN THIS ORDER MAY BE RECALLED AND THE CROSS APPEALS MAY BE LISTED TOGETH ER FOR DISPOSAL BY A COMMON ORDER . 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON TUESDAY THE 1 ST DAY OF DECEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 01/12/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI