DCIT,CC-3(2),CR-3, MUMBAI V. CMS COMPUTERS LTD., MUMBAI

ITA 4231/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9279 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHI RAMA KARTIKEYANLD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 142(1); 133(6); 147; 148

Judgement Text

ITA NO.4231/MUM/2017 M/S. CMS COMPUTERS LTD. ASSESSMENT YEAR :2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4231/MUM/2017 ( / ASSESSMENT YEAR:2009-10) D CIT - CC - 3(2) ROOM NO.1913, 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT, MUMBAI-21. / VS. M/S. CMS COMPUTERS LTD. C/O. KAYCEE IND. COMPOUND, 70-LAKE ROAD BHANDUP-(W), MUMBAI-78.. ./ ./PAN/GIR NO. AAACC-1758-Z ( ! /APPELLANT ) : ( '#! / RESPONDENT ) APPELLANT BY : ABHI RAMA KARTIKEYAN - LD.DR RESPONDENT BY : NONE / DATE OF HEARING : 20/03/2019 / DATE OF PRONOUNCEMENT : 03/04/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-51, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-51/IT-62/2015-16 DATED 22/03/2017 QUA CERTAIN RELIEF PROVIDED TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJOURNMENT APPL ICATION IS ON RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE- OFF THE SAME ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING LD. D EPARTMENTAL ITA NO.4231/MUM/2017 M/S. CMS COMPUTERS LTD. ASSESSMENT YEAR :2009-10 2 REPRESENTATIVE [DR] WHO JUSTIFIED THE IMPUGNED ADDI TIONS AS MADE BY LD. AO. 2.1 FACTS ON RECORD REVEAL THAT THE ASSESSEE BEING RESIDENT CORPORATE ENTITY STATED TO BE ENGAGED IN THE BUSINESS OF TRADING IN BIOMETRICS ATTENDANCE AND ACCESS CONTROL SYSTEMS ETC. WAS SUBJECTED TO REASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 147 ON 30/03/2015 BY LD. ASSISTANT COMMISSIONER OF INCOME TAX 3(2), MUMBAI [AO] WHEREIN THE ASSESSEE WAS SADDLED WITH ADDITIONS OF RS.78.38 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ORIGINAL RETURN FILED ON 30/09/2009 WAS ASSESSED IN SCRUTINY ASSESSMENT U/S 143(3) ON 27/12/2011. 2.2 THE REASSESSMENT PROCEEDINGS GOT TRIGGERED PURS UANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION) & SALES TAX DEPARTMENT, MAHARASHTRA THAT THE ASSESSEE STOOD BENEFICIARY OF ACCOMMODATION PURCHASE BILLS AGGREGATING TO RS.78.48 LACS FROM 6 ENTITIES, THE D ETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED AT PARA 2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, STATUTORY NOTICES U/S 148 / 143 (2) & 142(1) WERE ISSUED AGAINST THE ASSESSEE WHEREIN THE ASSESSEE WA S DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 2.3 NOTICES ISSUED U/S 133(6) AGAINST ALL THE SUPPL IERS, TO CONFIRM THE TRANSACTIONS, DID NOT ELICIT SATISFACTORY RESPONSE AND THE FIELD INQUIRIES REVEALED THAT NONE OF THE PARTY EXISTED AT THE GIVE N ADDRESS. THE ASSESSEE DEFENDED THE SAME ON THE STRENGTH OF COPIE S OF INVOICES, BANK STATEMENTS, QUANTITATIVE STOCK STATEMENTS ETC. BUT FAILED TO SUBSTANTIATE THE DELIVERY OF MATERIAL WITH DOCUMENTARY EVIDENCES LIKE DELIVERY CHALLANS, OCTROI RECEIPTS ETC. THE ASSESSEE ALSO FA ILED TO PROVIDE LATEST ITA NO.4231/MUM/2017 M/S. CMS COMPUTERS LTD. ASSESSMENT YEAR :2009-10 3 ADDRESSES OF THE SUPPLIERS. THE FACTUAL MATRIX LED THE LD. AO TO TREAT THE PURCHASES AS NON-GENUINE AND ACCORDINGLY, THE SAME WERE DISALLOWED. 3. AGGRIEVED, THE ASSESSEE AGITATED THE REASSESSME NT PROCEEDINGS ON LEGAL GROUNDS WITHOUT ANY SUCCESS BEFORE LD. FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATED 22/03/2017. HOWEVER, ON M ERITS, THE QUANTUM ADDITIONS WERE REDUCED TO 12.5% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDER ED OPINION THAT THERE COULD BE NO SALES WITHOUT ACTUAL PURCHASE OF MATERI AL. THE SALES TURNOVER REFLECTED BY THE ASSESSEE HAS BEEN ACCEPTE D BY THE REVENUE. THE PAYMENTS OF THE SUPPLIES HAVE BEEN MADE BY THE ASSESSEE THROUGH BANKING CHANNELS. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS. HOWEVER, AT THE SAME TIME, THE DELIVERY OF MATERIAL COULD NOT BE SUBSTANTIATED AND THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIER TO CONFIRM THE TRANSACTIONS. UNDER THE GIVEN FACTUA L MATRIX, THE FULL DISALLOWANCE WAS NOT JUSTIFIED BUT ONLY SOME REASON ABLE ESTIMATE WAS ADEQUATE SO AS TO PLUG THE REVENUE LEAKAGE ON ACCOU NT OF POSSIBLE PURCHASE OF THE MATERIAL FROM THE GREY MARKET AND P ROFIT ELEMENT EMBEDDED IN THESE TRANSACTIONS, WHICH LD. FIRST APP ELLATE AUTHORITY HAS RIGHTLY DONE. THEREFORE, WE DO NOT FIND ANY INFIRMI TY IN THE SAME. 5. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD APRIL, 2019. SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03/04/2019 SR.PS, JAISY VARGHESE ITA NO.4231/MUM/2017 M/S. CMS COMPUTERS LTD. ASSESSMENT YEAR :2009-10 4 !'#$ # / 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.