BHIKARAM PANAJI CHOUDHARY, MUMBAI V. INCOME TAX OFFICER 19(1)(2), MUMBAI

ITA 4173/MUM/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4455 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BEPAIR
• Keywords: Bogus purchase; Corroborative evidences; Accommodation entries; Onus to prove; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI G.S . PANNU , AM AND SHRI PAWAN SINGH , JM ITA NO. 4173/MUM/2018 ASSESSMENT YEAR 2010 - 11 SHRI BHIKARAM PANAJI CHOUDHARY 103, 1 ST FLOOR, 49/B, MARUTI MANDIR MARG , 5 TH KUMBHARWADA MU MBAI - 400 004. / VS. INCOME TAX OFFICER - 19( 1)(2 ) MUMBAI. ./ PAN : A KPC 1320 P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY NONE / RESPONDENT BY SHRI S.K. BEPAIR - DR DATE OF HEARIN G 1/0 8 /2018 DATE OF PRONOUNCEMENT 10 /0 8 /2018 / O R D E R PER PAWAN SINGH , JUDICIAL MEMBER : 1 . THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME - TAX(APPEALS) - 5 1 , MUMBAI [LD. CIT(A)] DATED 0 4 /01/2018 F OR ASSESSMENT YEAR 2010 - 11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL. (1) THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING A ADDITION OF RS. 1 1 , 4 9, 272 / - BY DISALLOWING 12.5% ON NON - GENUINE PURCHASES OF RS.91,94,172/ - . THE LEARNED CIT(A ) - 51 HAS ERRED IN SCALE DOWN GP 9% INSTEAD OF ADOPTING 0% ADDITION, WITHOUT THE FACTS OF CARE & SUBMISSION MADE BY THE ASSESSEE ( 2 ) . THE APPELLANT CRAVES TO LEAVE, ADD, AMEND ANY OF THE GROUNDS OF APPEAL AS ABOVE. ITA NO. 4173 /MUM/201 8 BHIKRAM PANAJI CHOUDHARY 2 2 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE AN INDIVIDUAL IS PROPRIETOR OF RAJESH METAL, TRADING IN FERROUS AND NON FERROUS METAL . HE FILED RETURN OF INCOME ON 07/07/2010 DECLARING TOTAL INCOME OF RS. 4,22,488/ - . THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT. THE ASSESSMENT WAS RE - O PENED BY ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, OF GOVERNMENT OF MAHARASHTRA, AND DG ( I NVESTIGATION) INCOME TAX . IN THE INFORMATION IT WAS COMMUNICATED THAT SOME BUSINESSMEN/TRADERS WERE ENGAGED IN PROVIDING BOGUS BILLS WITHOUT ACTUAL DELIVERY OF GOODS. ACCORDINGLY NOTICE U/S. 1 4 8 DATED 30 /11/2014 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN RESPONSE TO THE SAID NOTICE VIDE LETTER DATED 05/12/2014 CONTENDED THAT RETURN H AS ALREADY FILED ON 07/07/2010 AND MAY BE TREA TED AS RETURN IN RESPONSE TO NOTICE U/S. 148. THE ASSESSING OFFICER PROCEEDED FOR REASSESSMENT PROCEEDINGS. DURING THE ASSESSMENT ASSESSEE WAS CO NFRONTED ABOUT BOGUS HAWALA BILLS FROM WHOM ASSESSEE HAD SHOWN PURCHASES OF RS. 91,94,172/ - . THE ASSESSEE WAS AS KED TO PRODUCE/FURNISH SUPPORTING EVIDENCE AND TO PROVIDE ALL THE MATERIAL EVIDENCE TO PROVE THE GENUINENESS OF PURCHASE AND TO PRODUCE THE PARTIES FOR VERIFICATION ALONG WITH THEIR BOOKS OF ACCOUNT. THE ASSESSEE SHOWED HIS INABILITY TO PRODUCE THE PARTIES FOR VERIFICATION. HOWEVER, THE ASSESSEE FURNISHED COPY OF PURCHASE BILL AND OTHER DOCUMENTARY EVIDENCE ALONG WITH HIS WRITTEN SUBMISSION DATED ITA NO. 4173 /MUM/201 8 BHIKRAM PANAJI CHOUDHARY 3 28/12/2015 AND CONTENDED THAT PURCHASE MADE BY THE ASSESSEE ARE GENUINE. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER HOLDING THAT THE ASSESSEE FAILED TO DISCHARGE HIS ONUS TO PROVE THE GENUINENESS OF THE PURCHASE. THE ASSESSING OFFICER DISALLOWED 12.5% OF THE PURCHASES SHOWN FROM M/S. ANAND DEEP METAL; M/S. MONA METAL/METALEX METAL CORPO RATION AND M/S. MONU METAL . 3 . ON APPEAL BEFORE THE LD. CIT(A) THE RE - OPENING WAS UPHELD, HOWEVER, THE ADDITION/DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES WAS RESTRICTED TO 9% OF THE BOGUS/IMPUGNED PURCHASES. FURTHER, AGGRIEVED THE ASSESSEE HAS FILED THE PRE SENT APPEAL BEFORE US. 4 . N ONE , APPEARED ON BEHALF OF ASSESSEE, DESPITE SERVICE OF NOTICE THROUGH RPAD. CONSIDERING THE FACT THAT NEITHER THE ASSESSEE NOR ITS REPRESENTATIVE APPEARED NOR MOVE ANY ADJOURNMENT APPLICATION, THEREFORE, WE WERE LEFT WITH NO OTHE R OPTION EXCEPT TO HEAR THE LD. DR FOR THE REVENUE AND DECIDE THE CASE ON MERITS AFTER GOING THROUGH THE AVAILABLE MATERIAL ON RECORD . THE DR FOR THE REVENUE SUPPORTED THE ORDER OF CIT(A). THE DR FURTHER SUBMITS THAT THE SALES TAX DEPARTMENT, GOVT. OF MAHA RASHTRA AND THE INVESTIGATION WING OF INCOME TAX DEPARTMENT MADE A FULL - FLEDGED ENQUIRY WITH REGARD TO HAWALA DEALERS WHO WERE INDULGING IN PROVIDING ACCOMMODATION ENTRIES WITHOUT DELIVERY OF GOODS. THE ASSESSEE HAS SHOWN PURCHASES FROM SUCH PARTIES WHOSE NAMES ITA NO. 4173 /MUM/201 8 BHIKRAM PANAJI CHOUDHARY 4 APPEAR IN THE LIST OF HAWALA DEALERS. THE NAME OF THE ASSESSEE IS ALSO SHOWN IN THE LIST OF SUCH BENEFICIARY. THE ASSESSEE MERELY OBTAINED ACCOMMODATION BILLS ONLY TO INFLATE EXPENSES AND BRING OUT THE PROFITABILITY IN ORDER TO AVOID TAX. THE LD. DR FURTHER SUBMITS THAT CIT(A) HAS ALREADY GIVEN SUFFICIENT RELIEF TO THE ASSESSEE . 5 . W E HAVE CONSIDERED THE SUBMISSION OF LD. DR AND ORDERS OF THE AUTHORITI ES BELOW. WE HAVE SEEN THAT THE ASSESSING OFFICER MADE ADDITION /DISALLOWANCE OF 12.5% OF THE PURCHASE S SHOWN BY THE ASSESSEE FROM BOGUS/TAINTED DEALERS. THE LD. CIT(A) SUSTAINED THE ADDITION @ 9% OF THE BOGUS PURCHASES , ON HI S OBSERVATION THAT THE ASSESSEE HAS RECONCILED THE ALLEGED HAWALA PURCHASES WITH CORRESPONDING SALES. THE LD. CIT(A) AFTER CONSIDERI NG THE RATE OF SALE S TAX PREVALENT IN THE STATE OF MAHARASHTRA GRANTED PARTIAL RELIEF TO THE ASSESSEE AND SUSTAINED ADDITION @ 9% OF THE BOGUS PURCHASES. WE HAVE FURTHER EXAMINED THE ORDER OF THE AUTHORITIES BELOW. WE ARE OF THE VIEW THAT EVEN IN CASE TRA NSACTION IS NOT VERIFIABLE DUE TO ANY REASON THE INCOME TAX DEPARTMENT IS ENTITLED TO TAX THE INCOME COMPONENT OF THE TRANSACTION. IN OUR VIEW THE DISALLOWANCE SUSTAINED BY THE LD. CIT(A) IS REASONABLE ONE TO SUSPECT THE ELEMENT OF REVENUE LEAKAGE, WHICH W E CONFIRM. THE ASSESSEE NEITHER CAME FORWARD NOR DID IT PLACE ANY MATERIAL BEFORE US TO TAKE ANY CONTRARY VIEW. GROUND IS DISMISSED. ITA NO. 4173 /MUM/201 8 BHIKRAM PANAJI CHOUDHARY 5 IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COU RT ON 10 .0 8 .2018. SD/ - SD/ - (G.S. PANNU) (PAWAN SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED: 10 /08 /2018 JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR D BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.