ITO 6(3)(1), MUMBAI V. FLUID POWER PVT. LTD, MUMBAI

ITA 417/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0626 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . ITA NO.417/MUM/2019(A.Y.2010-11) . ITA NO.418/MUM/2019(A.Y.2011-12) INCOME TAX OFFICER 6(3)(1), 5 TH FLOOR, ROOM NO.510, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ...... # / APPELLANT VS. FLUID POWER PVT. LTD. 40-E, MUNICIPAL COMPOUND, KK MARG, JACOB CIRCLE, MUMBAI 400 011 PAN: AAACF0605R ..... &'/ RESPONDENT #(/ APPELLANT BY : SHRI R. BHOOPATHI &'(/ RESPONDENT BY : NONE )' / DATE OF HEARING : 23/01/2020 * )' / DATE OF PRONOUNCEMENT : 13/03/2020 / ORDER THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI (IN SHORT THE CIT(A) ) FOR THE ASSESSMENT YEARS 2011-11 AND 2011-12, RESPECTI VELY. 2. THE APPEAL OF THE REVENUE IN ITA NO.417/MUM/2019 FOR ASSESSMENT YEAR 2010-11 IS AGAINST THE ORDER OF CIT(A) DATED 1 2/11/2018. THE APPEAL IS 2 . ITA NO.417/MUM/2019(A.Y.2010-11) . ITA NO.418/MUM/2019(A.Y.2011-12) TIME BARRED BY 19 DAYS. THE LD.DEPARTMENTAL REPRES ENTATIVE MADE ORAL REQUEST FOR CONDONATION OF 19 DAYS DELAY IN FILING OF THE APPEAL. TAKING INTO CONSIDERATION THAT THERE WAS ONLY MINOR DELAY IN FI LING OF THE APPEAL, THE PRAYER OF THE LD.DEPARTMENTAL REPRESENTATIVE IS ACC EPTED AND THE DELAY IN FILING OF THE APPEAL IS CONDONED. THE APPEAL IS AD MITTED TO BE HEARD AND DISPOSED OF ON MERITS. 3. NOTICE OF THE APPEAL WAS SENT TO THE ASSESSEE TH ROUGH RPAD. THE ACKNOWLEDGMENT OF THE NOTICE AVAILABLE ON RECORD SHOWS THAT THE NOTICE WAS SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE , NONE APPEARED ON BEHALF OF THE ASSESSEE, NOR ANY REQUEST FOR ADJOURNMENT HAS B EEN RECEIVED. IT APPEARS THAT THE ASSESSEE IS NOT KEEN TO PURSUE THE APPEAL . THEREFORE, THE APPEAL IS TAKE UP FOR ADJUDICATION WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE AND THE MATERIAL AVAILABLE ON RECORD. 4. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE ASSESSEE IS ENGAGED IN MANUFACTURING OF ENGINEERING EQUIPMENTS. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2010-11 THE ASSESSEE MADE BOGUS PURCHASES OF RS.39,422/- FROM HAWALA DEALERS. THE ASSESSING OFF ICER MADE ADDITION OF THE ENTIRE SUCH BOGUS PURCHASES. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT(A). THE CIT(A) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED BOGUS PURCHASES. HENCE, THE PRESENT APPEAL BY THE REVENUE. THE LD.DEPARTMENTAL REPRESENTATIVE ASSERTED THAT THE CI T(A) HAS ERRED IN ESTIMATING DISALLOWANCE ON BOGUS PURCHASES AT 12.5% WITHOUT THERE BEING ANY COGENT EVIDENCE. 3 . ITA NO.417/MUM/2019(A.Y.2010-11) . ITA NO.418/MUM/2019(A.Y.2011-12) 5. I HAVE HEARD THE SUBMISSION MADE BY LD.DEPARTMEN TAL REPRESENTATIVE AND HAVE EXAMINED THE MATERIAL ON RECORD. THE ASSE SSMENT WAS REOPENED ON THE GROUND THAT THE ASSESSEE HAD OBTAINED BOGUS PUR CHASE BILLS AMOUNTING TO RS.3,39,826/- FROM THE HAWALA DEALERS. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED ONE OF THE ALL EGED HAWALA DEALERS I.E. M/S.PADAM ENTERPRISES AND FURNISHED CONFIRMATIONS AND COPIES OF THE BILLS AGGREGATING TO RS.3,00,404/-. CONSEQUENTLY, ASSES SING OFFICER RESTRICTED THE DISALLOWANCE TO UNPROVED PURCHASES OF RS.39,422/-. I FIND THAT THE ASSESSING OFFICER HAS NOT QUESTION THE TURNOVER OF ASSESSEE. WITHOUT PURCHASE THERE CANNOT BE MANUFACTURING. FURTHER, IT IS A WELL SET TLED PROPOSITION NOW THAT ONLY ELEMENT OF PROFIT EMBEDDED IN ALLEGED BOGUS PU RCHASES SHOULD BE TAXED AND NOT THE ENTIRE BOGUS PURCHASES. THE CIT(A) AFT ER EXAMINING THE FACTS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED BOGUS PURCHASES. I FIND NO INFIRMITY IN THE ORDER OF CIT(A), HENCE, THE SAME I S UPHELD AND THE APPEAL OF REVENUE IS DISMISSED. ITA NO.418/MUM/2019(A.Y.2011-12): 6. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE NATURE OF DISALLOWANCE AND MANNER OF DISALLOWANCE IN ASSESSM ENT YEAR 2011-12 IS SIMILAR TO ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER DISALLOWED BOGUS PURCHASES OF RS.22,519/-. THE CIT(A) RESTRICTED THE ADDITION TO 12.5%. 7. I HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTME NTAL REPRESENTATIVE AND HAVE EXAMINED THE IMPUGNED ORDER. SINCE FACTS IN THE ASSESSMENT YEAR UNDER APPEAL ARE AT PARITY WITH FACTS IN ASSESSMENT YEAR 2010-11, THE FINDINGS GIVEN IN ASSESSMENT YEAR 2010-11 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT 4 . ITA NO.417/MUM/2019(A.Y.2010-11) . ITA NO.418/MUM/2019(A.Y.2011-12) ASSESSMENT YEAR AS WELL. THUS, APPEAL OF THE REVEN UE IS DISMISSED BEING DEVOID OF ANY MERITS. 8. IN THE RESULT, BOTH THE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 13 TH DAY OF MARCH, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, ,/ DATED 13/03/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT , 2. &' / THE RESPONDENT. 3. -' ( )/ THE CIT(A)- 4. -' CIT 5. 01&' , . . . , / DR, ITAT, MUMBAI 6. 12345 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI