JCIT (OSD) CIRCLE-15(1)(1), Mumbai V. M/S ESP (ASIA) PVT LTD., Mumbai

ITA 4066/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2611 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENONLD
• Keywords: Bogus purchase

Judgement Text

ITA NO.4066/MUM/2019 ASSESSMENT YEAR: 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.4066/MUM/2019 ( / ASSESSMENT YEAR: 2011-12) JCIT(OSD) - CIRCLE - 15(1)(1) ROOM NO.470, 4 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. / VS. M/S. ES P (ASIA) PVT.LTD. 10,13, NECO CHAMBERS SECTOR-11, CBD BELAPUR NAVI MUMBAI-400 706. PAN/GIR NO. AABCE - 6484 - C ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI VIJAY KUMAR MENON-LD.DR / DATE OF HEARING : 26/11/2020 / DATE OF PRONOUNCEMENT : 26/11/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THIS APPEAL FOR ASSESSMENT YEAR (AY) 2 011-12, THE DEPARTMENT CHALLENGES THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-24, MUMBAI [CIT(A)], APPEAL NO.CIT(A)-24/ DCIT-15(1)/IT- 682/2016-17 DATED 25/03/2019 WHICH HAS RESTRICTED T HE ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES TO 12.5%. 2. NONE APPEARED FOR ASSESSEE AT THE TIME OF HEARIN G AND NO VALID ADJOURNMENT APPLICATION WAS ON RECORD. HOWEVER, THE MATERIAL ON RECORD ITA NO.4066/MUM/2019 ASSESSMENT YEAR: 2011-12 2 WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ADDITION AS MADE BY LD. AO. 3. THE ASSESSEE WAS SUBJECTED TO REASSESSMENT PROCE EDINGS FOR THE YEAR UNDER CONSIDERATION PURSUANT TO RECEIPT OF CER TAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA WHICH INDICATED T HAT THE ASSESSEE AVAILED BOGUS PURCHASE BILLS AGGREGATING TO RS.14. 38 LACS FROM TWO ENTITIES. THE DETAIL OF THE SAME HAS ALREADY BEEN E XTRACTED IN PARA-5.1 OF THE ASSESSMENT ORDER DATED 28/12/2016. THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS. H OWEVER, IN DEFENSE, THE ASSESSEE SUBMITTED INVOICES, LEDGER ACCOUNTS ALONG WITH COPIES OF BANK STATEMENT EVIDENCING PAYMENT THROUGH BANKING CHANNE LS. FINDING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF ESTABL ISHING THE GENUINENESS OF THE PURCHASES SO MADE, LD. AO DISALL OWED ENTIRE PURCHASES AND ADDED THE SAME TO THE INCOME OF THE A SSESSEE U/S 69C. THE ASSESSEE IS STATED TO BE ENGAGED IN PROVIDING R EPAIRING AND MAINTENANCE SERVICES. 4. BEFORE LD. FIRST APPELLATE AUTHORITY, THE ASSESS EE REITERATED THAT THE PURCHASES WERE GENUINE. THE LD. CIT(A) PRIMARILY GO ING BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN SIMIT P.SHETH V/S CIT 356 ITR 451 RESTRICTED THE ADDITIONS TO 12.5% OF THESE PURCHASE S. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. UPON DUE CONSIDERATION OF FACTUAL MATRIX AS ENUM ERATED IN PRECEDING PARAGRAPHS, WE FIND NO INFIRMITY IN THE A CTION OF LD. CIT(A) IN ESTIMATING THE ADDITIONS @12.5% SINCE THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENT TO TH E SUPPLIERS WERE THROUGH BANKING CHANNELS. THE ASSESSEES NATURE OF BUSINESS WOULD REQUIRE ACTUAL PURCHASE OF MATERIAL. AT THE SAME TI ME, THE ASSESSEE ITA NO.4066/MUM/2019 ASSESSMENT YEAR: 2011-12 3 FAILED TO CONCLUSIVELY PROVE THE PURCHASE TRANSACTI ONS. IN SUCH A CASE, THERE WOULD BE NO OPTION BUT TO ESTIMATE THE ADDITI ONS AGAINST THESE PURCHASES WHICH LD. CIT(A) HAS RIGHTLY DONE SO. CON CURRING WITH THE SAME, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 26 TH NOVEMBER, 2020. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 26/11/2020 SR.PS:-JAISY VARGHESE !' #' / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$- , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.