ACIT 11(3)(2), THANE V. VIVID VISION TREXIM P LTD, MUMBAI

ITA 4298/MUM/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7202 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 22-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 115JB; 133(6); 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.4298/M/2016 ASSESSMENT YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX -11(3)(2), R.NO.427, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. VIVID VISIONS TREXIM PVT. LTD., 440-443, F-WING, SOLARIS- 1, OFF SAKI VIHAR ROAD, OPP. L&T GATE NO.6, ANDHERI (EAST), MUMBAI 400 072 PAN: AABCV8727B (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI M. SUBRAMANIAN, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. DATE OF HEARING : 18.02.2019 DATE OF PRONOUNCEMENT : 15.04.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 14.03.2016 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE VARI OUS GROUNDS OF APPEAL IS AGAINST THE DELETION OF ADDITI ON BY LD. CIT(A) OF RS.1,18,22,356/- AS MADE BY THE AO ON ACC OUNT OF ALLEGED BOGUS PURCHASES FROM M/S. HINDUJA TRADERS P VT. LTD. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS F RAMED IN THIS CASE UNDER SECTION 143(3) OF THE ACT ON 26.12. 2011 ITA NO.4298/M/2016 M/S. VIVID VISIONS TREXIM PVT. LTD. 2 ASSESSING THE TOTAL INCOME AT RS.1,28,01,995/- UNDE R THE NORMAL PROVISIONS AND RS.98,63,833/- UNDER THE SPEC IAL PROVISIONS UNDER SECTION 115JB OF THE ACT. THEREAF TER, THE CASE OF THE ASSESSEE WAS REOPENED ON 18.02.2013 BY ISSUI NG NOTICE U/S 148 OF THE ACT AFTER THE AO RECEIVED THE INFORM ATION FROM DGIT (INV.) THAT ASSESSEE IS A BENEFICIARY OF BOGUS PURCHASE BILLS FROM M/S. HINDUJA TRADERS PVT. LTD. DURING THE ASS ESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO SUBSTANTIA TE THE CLAIM OF PURCHASES WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 23.12.2013 FILING THE LEDGER EXTRACTS OF THE SUPPLI ER, COPY OF TAX INVOICES AND DETAILS OF PAYMENTS ETC. THE AO ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT VIDE LETTER DATED 2 4.01.2014 ASKING THE CALLING FOR CERTAIN DETAILS FROM THE SU PPLIER WHICH WAS FILED BY THE SUPPLIER ON 30.01.2014. THEREAFTE R, THE AO ALSO ISSUED SUMMON UNDER SECTION 131 TO THE SUPPLIER CO MPANY AND RECORDED THE STATEMENT. DURING THE COURSE OF RECOR DING OF THE SAID STATEMENT, THE DIRECTOR OF THE COMPANY STATED THAT ALL THE ENTRIES WERE RECORDED IN THE BOOKS OF ACCOUNTS AND HE HAS NOTHING TO ADD FURTHER AS THE RECORDS ARE VERY OLD. FINALLY, THE AO NOT FINDING THE CONTENTIONS OF THE ASSESSEE AS G ENUINE ON THE BASIS THAT THE DIRECTOR OF THE SUPPLIER COMPANY HAS CONFIRMED BEFORE THE SALES TAX AUTHORITY AND ALSO DURING THE COURSE OF STATEMENT RECORDED UNDER SECTION 131 OF THE ACT THA T M/S. HINDUJA TRADERS PVT. LTD. WAS ENGAGED IN THE BUSINE SS OF PROVIDING ACCOMMODATION ENTRIES AND THEREFORE TREAT ED THE ENTIRE PURCHASES AS BOGUS AND NON GENUINE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, 19 61 VIDE ORDER DATED 07.03.2014. ITA NO.4298/M/2016 M/S. VIVID VISIONS TREXIM PVT. LTD. 3 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) AFT ER CONSIDERING THE CONTENTIONS OF THE ASSESSEE WHICH I S REPRODUCED IN PARA 4.1 OF THE APPELLATE ORDER ALLOWED THE APPE AL OF THE ASSESSEE. THE LD. CIT(A) NOTED THAT THE LETTER ISSU ED UNDER SECTION 133(6) TO M/S. HINDUJA TRADERS PVT. LTD. IT WAS DULY REPLIED AND THE SAID PARTY HAS CONFIRMED TO HAVE S UPPLIED THE EXPORT LICENSES TO THE ASSESSEE WHO IS ALSO DEALING IN THE EXPORT LICENSES WHICH IS TRADABLE ITEM. THE LD. CIT(A) AL SO NOTED THAT THERE IS NO PROOF THAT THE WITHDRAWAL OF CASH HAS T AKEN PLACE AFTER THE PAYMENT WAS MADE TO THE SUPPLIER AND THUS THE AO HAS FAILED TO BRING ANY EVIDENCE ON RECORD TO PROVE THAT THE SAID PURCHASE OF EXPORT LICENSES WAS NOT GENUINE AND THU S DELETED THE ENTIRE ADDITION. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS PURCHASED EXPORT LICENSES FROM M/S. HINDUJA TRADERS PVT. LTD. WHICH IS A HAWALA OPERATOR AS PER THE SALES TAX DEPARTMENT, GOVERNMEN T OF MAHARASHTRA. THIS IS ALSO UNDISPUTED THAT THE SAID COMPANY HAS CONFIRMED IN RESPONSE TO LETTER UNDER SECTION 1 33(6) ISSUED BY THE AO TO THE SAID COMPANY THAT THE EXPORT LICEN SES WERE IN FACT SUPPLIED TO THE ASSESSEE. THE AO HAS EVEN ISS UED SUMMON TO THE DIRECTOR OF THE SUPPLIER COMPANY AND RECORDE D A STATEMENT UNDER SECTION 131 OF THE ACT. IN THE SAI D STATEMENT THE DIRECTOR HAS STATED THAT WHATEVER HAS BEEN SOLD TO THE ASSESSEE HAS BEEN RECORDED IN THE BOOKS OF ACCOUNTS AND HE HAS NOTHING TO SAY FURTHER. BESIDES, THE ASSESSEE ALSO FILED THE COPIES OF LEDGER, INVOICES AND PROOF OF PAYMENTS T O THE SUPPLIER IN ORDER TO PROVE THE GENUINENESS OF THE PURCHASES. THE LD. CIT(A) DELETED THE ADDITION AFTER OBSERVING THAT TH E AO HAS NOT ITA NO.4298/M/2016 M/S. VIVID VISIONS TREXIM PVT. LTD. 4 BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE PU RCHASES WERE BOGUS EXCEPT RELYING ON THE STATEMENT GIVEN BE FORE THE SALES TAX AUTHORITIES AND THUS REVERSED THE ORDER OF THE AO. THE DELETION OF ADDITION BY LD. CIT(A) APPEARS TO B E BASED UPON CORRECT REASONING IS APPARENT FROM THE RECORD. EVE N THE SUPPLIER HAS CONFIRMED THE SUPPLY OF EXPORT LICENSES AS STAT ED HEREINABOVE AND CONFIRMED THE PAYMENT HAVING RECEIV ED FROM THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE NO T LEFT WITH ANY DOUBT ABOUT THE PURCHASES OF THESE LICENSES AS THE ASSESSEE HAS FURTHER SOLD THESE LICENSES TO THE THI RD PARTY AND REALISED THE PAYMENT THEREFROM WHICH IS ALSO PROVED . ACCORDINGLY WE ARE INCLINED TO UPHOLD THE ORDER O F LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.04.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 15.04.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.