RAMNIKLAL S. SAVLA, MUMBAI V. ITO-19(3)(1), MUMBAI

ITA 4239/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8392 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.4239/M/2017 ASSESSMENT YEAR: 2010-11 SHRI RAMNIKLAL S. SAVLA, PROP. OF M/S. PARAG STEEL, 74, MULJIBHAI BUILDING, KHETWADI MAIN ROAD, BEHIND ALANKAR CINEMA, MUMBAI-400 004 PAN: AACPS7486C VS. ITO 19(3)(1), ROOM NO.202, 2 ND FLOOR, MATRU MANDIR, TARDEO, MUMBAI 400 007 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SMT. N. HEMALATHA, D.R. DATE OF HEARING : 06.11.2017 DATE OF PRONOUNCEMENT : 23.11.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 03.03.2017 OF THE COMMISSIONER OF I NCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME FOR THE A.Y.2010-11 ON 22.9.2010 DECLARIN G TOTAL INCOME OF RS.3,56,462/-. THE RETURN OF INCOME WAS PROCESSE D U/S.143(1) OF THE I.T ACT. SUBSEQUENTLY, THE ASSESSING OFFICER (H EREINAFTER REFERRED TO AS THE AO) RECEIVED INFORMATION FROM THE DGIT(IN V.), MUMBAI WHO IN TURN RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT ABOUT SOME PARTIES WHO WERE PROVIDING HAWALA ENTRY/ACCOMM ODATION ITA NO.4239/M/2017 SHRI RAMNIKLAL S. SAVLA 2 ENTRIES FOR PURCHASES. THE INFORMATION IN POSSESSIO N OF THE AO WAS THAT THE ASSESSEE HAS AVAILED OF ACCOMMODATION ENTR IES FOR PURCHASES FROM 6 PARTIES TOTALING TO RS.2,33,89,804/- THE DET AILS OF THE PARTIES ARE AS UNDER :- SR. NO. NAME OF THE PARTY AMOUNT 1. MUMBAI METAL CORPORATION 3,54,640/- 2. MONU METAL 4,24,037/- 3. MONA METALS METALEX METAL CORPORATION 6,41,946/- 4. GOODLUCK METALS 77,80,44/- 5. GOOD LUCK INDUSTRIES 58,41,639/- 6. MAHALAXMI STEEL (INDIA) 83,47,102/- TOTAL 2,33,89,804/- 3. ON THE BASIS OF THIS INFORMATION, THE AO ISSUED NOTICE U/S.148 WHICH WAS SUBSEQUENTLY FOLLOWED BY NOTICE U/S.142(1 ) AND 143(2) AND COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.147 O N 20.1.2016. THE AO HAD INFORMATION THAT THE ASSESSEE HAD MADE P URCHASES FROM THE ABOVE MENTIONED 6 PARTIES TO THE TUNE OF RS.2,3 3,89,804/- AND THAT THESE PARTIES WERE INVOLVED IN PROVIDING MERE ACCOMMODATION ENTRIES WITH NO GENUINE TRANSACTIONS. IN ORDER TO V ERIFY THE GENUINENESS OF THE PURCHASES CLAIMED BY THE ASSESSE E FROM THESE PARTIES, THE AO ASKED THE ASSESSEE TO FURNISH SUPPO RTING DOCUMENTS FOR CORRESPONDING SALES AFFECTED. THE ASSESSEE HAS FURNISHED THE ADDRESSES OF THE ABOVE MENTIONED PARTIES. THE AO TH EREFORE ISSUED NOTICES U/S. 133(6) TO THE ABOVE PARTIES, BUT THE S AME WERE RETURNED BACK UNSERVED BY THE POSTAL AUTHORITIES WITH THE RE MARKS 'NOT KNOWN' OR 'LEFT'. THE AO FURTHER HELD THAT NO DOCUMENTS SU CH AS DELIVERY CHALLANS, OCTROI RECEIPTS, TRANSPORTATION DETAILS E TC. WERE PRODUCED ITA NO.4239/M/2017 SHRI RAMNIKLAL S. SAVLA 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A O FURTHER HELD THAT MERE FILING OF EVIDENCES IN SUPPORT OF PURCHAS ES AND PAYMENTS MADE THROUGH ACCOUNT PAYEE CHEQUES CANNOT BE CONCLU SIVE IN A CASE WHERE GENUINENESS OF DELIVERY/TRANSACTION IS IN DOU BT AND HELD THAT THE PAYMENTS MADE THROUGH ACCOUNT PAYEE CHEQUES ARE NOT SACROSANCT AND FURTHER RELYING ON THE GUJARAT HIGH COURT DECISION OF CIT VS. SIMIT P. SHETH 356 ITR 451 PROCEEDED TO MA KE AN ADDITION @12.% OF THE TOTAL PURCHASES OF RS.2,33,89,804/- WH ICH COMES TO RS.29,23,7267/- 4. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS PARTLY ALLOWED THE CLAIM BY OBSERVING AS UNDER: 3.3.2. THE ACTION OF THE AO IN MAKING AN ADDITION OF 12.5% OF THE ALLEGED BOGUS PURCHASES IS CONFIRMED. HOWEVER, THE AO IS DI RECTED TO REDUCE THE GP ALREADY SHOWN BY THE APPELLANT ON SUCH PURCHASES . THIS GROUND OF APPEAL IS PARTLY ALLOWED. 5. BEFORE ME NONE APPEARED ON BEHALF OF THE ASSESSE E. I FIND THAT LD. CIT(A) HAS DISCUSSED VARIOUS LAWS. I FIND NO I NFIRMITY IN THE ORDER OF THE LD. CIT(A). HENCE, I HAVE NO ALTERNAT IVE BUT TO ACCEPT THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.11.2017. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 23.11.2017. * KISHORE, SR. P.S. ITA NO.4239/M/2017 SHRI RAMNIKLAL S. SAVLA 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.