ITO WARD 3 (4), THANE V. SHRI. YESUDEVASI ROMANI PITACHAIYA NADAR , THANE

ITA 411/MUM/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2434 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 22

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , . , BEFORE S H RI MAHAVIR SINGH, VP AND S H RI M. BALAGANESH, AM ./ ITA NO. 411 /MUM/ 2020 ( / ASSESSMENT YEAR 2009 - 10 ) INCOME TAX OFFICER, WARD - 3(4), THANE ROOM NO. 09, 6 TH FLOOR, B - WING, WAGLE INDUSTRIAL ESTATE, THANE (W) / VS. SHRI YESUDEVASI R A MANI PITACHAIYA NADAR A - 204, COSMOS HERITAGE, PRAMPARA MANPADA, THANE ( / APPELLANT) ( / RESPONDENT) . / PAN NO. ADIPN5236E / APPELLANT BY : SHRI T.S. KHALSA , DR / RESPONDENT BY : NONE / DATE OF HEARING : 1 6 .06.2021 / DATE OF PRONOUNCEMENT : 22 .06.2021 / O R D E R . , / PER M. BALAGANESH , AM : THIS APPEAL OF R EVENUE IS ARISING OUT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)] - 2 , NASHIK [IN SHORT CIT(A)], DATED 09.10.2019 . THE ASSESSMENT WAS FRAMED BY THE INCOME TAX OFFICER, WARD - 3(4) MUMBAI (IN SHORT ITO / AO) FOR THE A.Y. 2009 - 10 VIDE ORDER DATED 19 .03.2014 UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER THE ACT). 2 . THE EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO 25% ON PAGE | 2 ITA NO. 411 /MUM/ 2020 SHRI YESUDEVASI ROMANI PITACHAIYA NADAR; AY 2009 - 10 ACCOUNT OF BOGUS PURCHASE S MADE FROM NON - EXISTENT VENDORS IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3 . NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 4 . WE FIND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF F ABRICATION AND MANUFACTURING OF CHEMICAL PLANTS AND EQUIPMENTS. BASED ON THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT ASSESSEE HAD MADE CERTAIN PURCHASES FROM FIVE PARTIES TOTALING TO RS.33,18,640/ - , WHOSE NAMES APPEAR TO BE TAINTED DEALERS IN THE WEBSITE OF GOVERNMENT OF MAHARASHTRA, THE LEARNED AO REOPENED ASSESSMENT OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 AND RESORTED TO MAKE ADDITION TO THE EXTENT OF 100% OF VALUE OF SUCH PURCHASES ON THE GROUND THAT THOSE SUPPLIERS WERE NON - EXISTENT. THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE DATED 2 1 .02.2014 VIDE LETTER DATED 11.03.2014 HAD INDEED REPLIED BEFORE THE LEARNED AO THAT THE ASSESSEE HAD PURCHASED MATERIAL FROM ABOVE PARTIES AND USED THE SAME IN FABRICATI ON OF EQUIPMENTS WHICH HAD ULTIMATELY BEEN SOLD AND SALES THEREON ARE PROPERLY REFLECTED IN HIS BOOKS. THE ASSESSEE ALSO ENCLOSED THE DETAILS OF STATEMENT OF QUANTITY BY WEIGHT OF FINAL PRODUCTS SOLD AND THE TOTAL QUANTITY BY WEIGHT OF PRODUCTS OF THE EQUI PMENTS FABRICATED AND SOLD AND ALSO DETAILS OF MS PLATES PURCHASED AND SOLD. HOWEVER, WE FIND THAT THE LEARNED AO OBSERVED THAT SINCE THE NOTICES WERE ISSUED U/S 133(6) OF THE ACT TO THE CONCERNED SUPPLIERS HAD NOT BEEN RESPONDED BY THE PARTIES, THE ASSESS EE HAD NOT PROVED THE VERACITY OF THE PURCHASE S MADE TO THE EXTENT OF RS.33,18,640/ - AND ACCORDINGLY, THE ADDITION WAS MADE IN PAGE | 3 ITA NO. 411 /MUM/ 2020 SHRI YESUDEVASI ROMANI PITACHAIYA NADAR; AY 2009 - 10 THE ASSESSMENT. THE ASSESSEE APART FROM REITERATING THE AFORESAID SUBMISSIONS STATED THAT ALL THE PURCHASES WERE SUPPORTED BY INV OICES, DELIVERY CHALLANS AND PAYMENTS MADE TO THE SUPPLIERS ARE MADE BY ACCOUNT PAYEE CHEQUES . MERELY, BECAUSE THE SUPPLIERS HAD NOT RESPONDED TO THE NOTICES ISSUED U/S 133(6) OF THE ACT BY THE LEARNED AO, THE ASSESSEE CANNOT BE PENALIZED. WE FIND THAT THE LEARNED CIT(A) CONSIDERING THE FACT THAT SALES MADE BY THE ASSESSEE OUT OF AFORESAID PURCHASES WERE NOT DOUBTED BY THE LEARNED AO, ONLY THE PROFIT ELEMENT EMBEDDED IN THE SAID PURCHASE TRANSACTIONS COULD BE BROUGHT TO TAX AS INCOME OF THE ASSESSEE AND AC CORDINGLY, THE SAID PROFIT ELEMENT WAS ESTIMATED AT 25% BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE LEARNED CIT(A) ACCORDINGLY, GRANT ED THE RELIEF OF 75% TO THE ASSESSEE. AGGRIEVED BY THIS ORDER, NO APPEAL HAS BEEN PREFERRED BY THE ASSESSEE BE FORE US. 5 . WE FIND THAT THE LEARNED CIT(A) HAS REASONABLY ESTIMATED THE PROFIT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE INSTANT CASE AND WE DO NOT DEEM IT FIT TO INTERFERE IN THIS. ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 6 . IN THE RESULT , THE GROUND RAISED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 . 0 6.2021. SD/ - SD/ - ( /MAHAVIR SINGH) ( . / M. BALAGANESH ) ( / VICE PRESIDENT) ( / ACCOUNTANT MEMBER) , / MUMBAI, DATED: 22 . 06.2021 , . / SUDIP SARKAR, SR.PS PAGE | 4 ITA NO. 411 /MUM/ 2020 SHRI YESUDEVASI ROMANI PITACHAIYA NADAR; AY 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY . / SR. PRIVATE SECRETARY , / ITAT, MUMBAI