DCIT CIR 3(3)(1), MUMBAI V. RAMA PHOSPHATES LTD, MUMBAI

ITA 4007/MUM/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4826 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

1 ITA 4007/MUM/2016 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) I.T.A. NO.4007/MUM/2016 (ASSESSMENT YEAR 2011-12) DY.COMMISSIONER OF INCOME-TAX CIRCLE-3(3)(1), MUMBAI VS M/S RAMA PHOSPHATES LTD 812, RAHEJA CHAMBERS FREE PRES JOURNAL MARG, NARIMAN POINT MUMBAI-400 021 PAN : AAACR7191Q APPELLANT RESPONDENT APPELLANT BY SHRI BHARAT ANDHLE, DR RESPONDENT BY NONE DATE OF HEARING 22-09-2021 DATE OF PRONOUNCEMENT 30-09-2021 O R D E R PER SAKTIJIT DEY (JM) THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 14-03-2016 OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-8, MUM BAI FOR THE ASSESSMENT YEAR 2011-12. 2. PERTINENTLY, THIS APPEAL WAS EARLIER DISPOSED OF BY THE TRIBUNAL IN A CONSOLIDATED ORDER DATED 16-09-2019 PASSED FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. AFTER DISPOSAL OF THE APPEAL AS AFORES AID, THE REVENUE FILED A MISCELLANEOUS APPLICATION STATING THAT GROUND 3 RAI SED IN REVENUES APPEAL, BEING 2 ITA 4007/MUM/2016 ITA 4007/MUM/2016 FOR ASSESSMENT YEAR 2011-12 REMAI NED UNDECIDED. FINDING THE AFORESAID CONTENTION OF THE REVENUE TO BE CORRE CT, THE TRIBUNAL, IN ORDER DATED 23-07-2021 PASSED IN M.A. NO.81/MUM/2021, RECALLED THE ORDER FOR THE LIMITED PURPOSE OF DECIDING GROUND 3. 3. WHEN THE APPEAL WAS TAKEN UP FOR HEARING NONE AP PEARED ON BEHALF OF THE ASSESSEE. LOOKING AT THE NATURE OF ISSUE ARISING FO R CONSIDERATION, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFT ER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND BASED ON FACTS AND MATERIALS ON RECORD. 4. GROUND 3, AS RAISED IN MEMORANDUM OF APPEAL READ S AS UNDER:- 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS 3,46,273/- AS BOGUS PURCHASE AS THE DIRECTOR OF M/S MAA CHAMUNDA SALES PVT. LTD. HAS CONFIRMED BY FILING AFFIDAVIT BEFORE THE SALES TAX DEPARTMENT THAT HE HAD NOT DONE ANY ACTUAL PURCHASE/SALES & ONLY BI LLS WAS ISSUED WITHOUT ACTUAL DELIVERY OF THE MATERIAL.' 5. BRIEFLY, THE FACTS ARE, THE ASSESSEE, A RESIDENT COMPANY, IS ENGAGED IN MANUFACTURING OF FERTILIZER AND EDIBLE OIL. IN COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSMENT OFFICER NOTICED THAT THE ASSESSEE HA D SHOWN PURCHASES OF R.3,46,273/- FROM M/S MAA CHAMUNDA SALES PVT LTD. F ROM THE INFORMATION RECEIVED FROM THE SALES-TAX DEPARTMENT, THE ASSESSI NG OFFICER FOUND THAT THE SAID PARTY HAS BEEN IDENTIFIED AS A SUSPICIOUS DEALER AN D INVOLVED IN PROVIDING ACCOMMODATION BILLS WITHOUT EFFECTING ACTUAL SALES. THOUGH, IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS, THE ASSESSING OFFICER TREATE D THE PURCHASES OF RS.3,46,273/- AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 3 ITA 4007/MUM/2016 WHILE DECIDING ASSESSEES APPEAL CONTESTING SUCH AD DITION, LEARNED COMMISSIONER (APPEALS) DELETED IT. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DE PARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSING OFFICER WAS IN POSSESSION OF CERTAIN INFORMATION FO RWARDED BY THE SALES-TAX DEPARTMENT INDICATING THAT M/S MAA CHAMUNDA SALES P VT LTD HAS BEEN IDENTIFIED AS A SUSPICIOUS DEALER PROVIDING ACCOMMODATION BILL S. HOWEVER, IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED COPIES OF PURCHASE BILLS, DELIVERY CHALLAN, LEDGER EXTRACT AND PAYMENT DETAI LS. FURTHER, THE ASSESSEE HAS ALSO FURNISHED DETAILS OF CONSUMPTION OF MATERIALS. THUS, THE AFORESAID EVIDENCES, PRIMA FACIE, DEMONSTRATE THAT THOUGH THERE MAY BE S OME DOUBT REGARDING THE EXACT SOURCE FROM WHICH THE GOODS WERE PURCHASED; H OWEVER, THERE CANNOT BE ANY DOUBT THAT GOODS REPRESENTING SUCH PURCHASES WE RE AVAILABLE WITH THE ASSESSEE. IN THE AFORESAID SCENARIO, THE ENTIRE PUR CHASES CANNOT BE DISALLOWED; BUT THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES C AN BE CONSIDERED FOR DISALLOWANCE TO TAKE CARE OF ANY REVENUE LEAKAGE AR ISING OUT OF NON DISCLOSURE OF TRUE PROFIT. IN VIEW OF THE AFORESAID, WE ARE INCLI NED TO MODIFY THE ORDER OF LEARNED COMMISSIONER (APPEALS) ONLY TO THE EXTENT O F DISALLOWING THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURCHAS ES. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. OUR CONCLUSION, AS ABOVE, IS CO NSISTENT WITH THE VIEW EXPRESSED BY THE TRIBUNAL IN SIMILAR NATURE OF CASE S. THE GROUND IS PARTLY ALLOWED. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 4 ITA 4007/MUM/2016 ORDER PRONOUNCED ON 30/09/2021. SD/- SD/- (RAJESH KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 30/09/2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI