M/s. S.F.Fabrics, Pune V. Income-tax Officer, Ward - 4 (5), Pune

ITA 434/PUN/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9219 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-10-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDRA BHANU MANDAL
• Keywords: Bogus purchase; Principle of natural justice
• Section: 143(3); 201; 131

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO. 434 / PUN/201 9 / ASSESSMENT YEAR : 20 08 - 09 M/S. S.F. FABRICS, 18, M.G. ROAD, CAMP, PUNE 411001 PAN : AASFS6131N . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 4(5), PUNE . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI CHANDRA BHANU MANDAL / ORDER PER ANIL CHATURVEDI, AM : 1. TH IS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 8 , PUNE FOR THE ASSESSMENT YEAR 20 08 - 09. 2 . THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER : - ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN TRADING BUSINESS OF CLOTHS AND READYMADE GARMENTS. ASSESSEE ELECTRONICALLY / DATE OF HEARING : 01.10. 2019 / DATE OF PRONOUNCEMENT: 01 . 10 . 2019 2 FILED ITS RETURN OF INCOME FOR A.Y. 20 08 - 09 ON 16 - 09 - 2008 DECLARING TOTAL INCOME AT RS.9,27,500/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THERE AFTER ASSESSMENT WAS FRA MED U/S 143(3) OF THE ACT VIDE ORDER DATED 30 - 12 - 2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 19,08,440/ - . AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DATED 31 - 01 - 2019 (IN APPEAL NO. PN/CIT( A ) - 8/ITO, WD. 4(5 )503/ 2018 - 19 ) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LOWER AUTHORITIES HAVE ERRED IN MAKING A DISALLOWANCE OF RS.9,80,937/ - BEING GENUINE PURCHASES MADE BY TRADING THE SAME AS BOGUS PURCHASES BY DISREGARDING VARIOUS DOCUMENTARY EVIDENCES PRODUCED BY YOUR APPELLANT. THE ACTION BEING ARBITRARY DESERVES TO BE REVERSED & DISALLOWANCE AS MADE SHALL BE DELETED. THE APPELLANT CRAVES FOR TO LEAVE, ADD, ALTER, MODIFY, DELETE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME HEARING, IN THE INTEREST OF NATURAL JUSTICE. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT SURVEY ACTION WAS CARRIED OUT AT M/S. DEV - VANI INDUSTRIES AND OTHER FIRMS LISTED AT PAGES 2 AND 3 OF THE ORDER ON 13 - 02 - 2009 WHEREIN IT WAS FOUND THAT THOSE CONCERNS WERE EN GAGED IN ISSUING ACCOMMODATION BILLS TO VARIOUS PARTIES. DURING THE COURSE OF SURVEY ACTION STATEMENT OF SHRI RAKESH KUMAR GUPTA, WHO WAS MANAGING ALL THE ACTIVITIES OF ALL THOSE CONCERNS WAS RECORDED U/S. 131 OF THE ACT WHEREIN HE ADMITTED THAT HE WAS IS SUING ACCOMMODATION BILLS AS PER REQUIREMENT OF PARTIES AND EARNING 1% OF COMMISSION. THE ASSESSING OFFICER NOTED THAT THE PARTIES WHO HAD AVAILED THE ACCOMMODATION BILLS INCLUDED THE ASSESSEE AND THE 3 ASSESSEE HAD MADE PURCHASES TO THE EXTENT OF RS.9,80,9 37/ - FROM THREE PARTIES LISTED AT PAGE 5 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS THEREFORE ASKED TO PROVE GENUINENESS OF THE PURCHASES TO WHICH THE ASSESSEE INTER - ALIA SUBMITTED THAT THE PURCHASES ARE GENUINE AND PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNELS. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO ESTABLISH THE RECEIPT OF THE GOODS. HE, THEREFORE, CONSIDERED THE TOTAL PURCH ASES MADE BY THE ASSESSEE FROM THOSE PARTIES AGGREGATING TO RS.9,80,937/ - AS BOGUS AND MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO CONFIRMED THE ACTION OF ASSESSING OFFICER. AGGRIEVED BY T HE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE ASSESSING OFFICER AND CIT(A) AND FURTHER SUBMITTED THAT THE PURCHASES MADE BY THE ASSESSEE ARE GENUINE AS THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNELS AND NO ADDITION CAN BE MADE MERELY ON THE BASIS OF THE STATEMENT RECORDED OF A THIRD PARTY BEHIND THE BACK OF THE ASSESSEE. HE, THEREFORE, SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING O FFICER BE DELETED. IN THE ALTERNATE, HE SUBMITTED THAT PUNE BENCH OF TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 795/PUN/2014 FOR ASSESSMENT YEAR 2010 - 11, DATED 28 - 04 - 2017 AND OTHERS SIMILAR CASE S HAS UPHELD THE ADDITION TO THE EXTENT OF 10% OF 4 THE PURCHASES AND SIMILAR ADDITION IF MADE WOULD BE ACCEPTABLE TO THE ASSESSEE . 5. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(A) AND SUBMITTED THAT IN THE PRESENT CASE THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE PURCHASES ARE GENUINE AND IN SUCH A SITUATION, THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION OF THE ENTIRE PURCHASES. HE, THUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION OF RS. 9 ,80,937/ - ON ACCOUNT OF BOGUS PURCHASES. I FIND THAT THE ASSESSING OFFICER IN ASSESSMENT ORDER HAS NOTED THAT THE ASS ESSEE HAS FAILED TO PROVE THE PURCHASES AND ACCORDINGLY MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES OF RS.9,80,937/ - WHICH WAS ALSO CONFIRMED BY THE CIT(A). I FIND THAT VARIOUS SCENARIOS OF BOGUS PURCHASE ISSUE WAS ADJUDICATED IN SERIES OF DECISIO NS BY THE PUNE BENCHES OF TRIBUNAL WITH LEAD ORDER IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT (SUPRA), WHEREIN THE COORDINATE BENCH OF THE TRIBUNAL HAD UPHELD THE ADDITION OF 10% OF THE BOGUS PURCHASES OVER AND ABOVE G.P. SHOWN BY THE ASSESS EE . IN VIEW OF THE AFORESAID FACTS AND FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CHHABI ELECTRICALS (SUPRA) AND IN VIEW OF THE ALTERNATE SUBMISSION OF LD. A .R., I UPHOLD THE ADDITION TO THE EXTENT OF 10% OF ALLEGED BOGU S PURCHASES OVER AND ABOVE G.P. SHOWN 5 BY THE ASSESSEE . I THEREFORE DIRECT ACCORDINGLY. THUS, THE GROUND S RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 01 ST DAY OF OCTOBER, 201 9. SD/ - ( ANIL CHATURVEDI ) / ACCOUNTANT MEMBER PUNE ; DATED : 01 ST OCTOBER, 2019. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE CIT (A ) - 8 , PUNE THE P R. CIT - 4 , PUNE , , / DR, ITAT, SMC PUNE; / GUARD FILE. / BY ORDER // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE.