ITO 25(1)(2), Mumbai V. SOHANLAL PUNARAMJI SANGAR, Mumbai

ITA 4510/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7360 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Accommodation entries; Set aside
• Section: 40A(3); 143(1); 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) SMC BENCH, MUMBAI BEFORE SHRI C.N. PRAS AD, HON'BLE JUDICIAL MEMBER ITA NO. 4510 /MUM/201 9 ( A. Y : 20 09 - 10) INCOME TAX OFFICER 2 5(1)(2 ) ROOM NO. 204, 2 ND FLOOR KAUTILYA BHAVAN BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI - 400051 V. SOHANLAL PUNARAMJI SANGAR B - 103, SIDHHANT COMPLEX RADHA KRISHNA ROAD ANDHERI (E), MUMBAI - 400069 PAN: AKCPS3014N ( A PPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PARAS JAIN DEPARTMENT BY SHRI SANJAY J. SETHI DATE OF HEARING : 18.01.2021 DATE OF PRONOUNCEMENT : 18.01.2021 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE R EVENUE AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 26 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 30.04.2019 FOR THE A.Y . 2011 - 12. 2. REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL: - 2 ITA NO. 4510/MUM/2019 (A.Y: 2009 - 10) SOHANLAL PUNARAMJI SANGAR 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, T HE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF THE TOTAL AMOUNT OF BOGUS PURCHASE TRANSACTION TO THE TUNE OF RS. 14,327/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO CONSIDER THE FACT THAT THE HAWALA DEALE RS HAD CONFIRMED ON OATH BEFORE THE SALES TAX DEPARTMENT THAT PURCHASES MADE BY THE ASSESSEE WERE WITHOUT SUPPLYING THE GOODS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO CONSIDER THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS UPON HIM TO PROVE THE GENUINENESS OF THE PURCHASE TRANSACTION CLAIMED BY IT. 4. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT PROVISION OF SECTION 40A(3) ARE ATTRACTED IN TH E CASE OF ASSESSEE AND 100% BOGUS PURCHASE AMOUNT IS TO BE DISALLOWED. 5. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED T O APPRECIATE THE FACT THAT TH E DECISION OF HONB LE APEX COURT IN THE CASE OF N K PROTEINS LTD. VS DCIT IN SLP (CIVIL) NO.769/2017 DATED 16/01/2017 HAS CONFIRMED THE 100% ADDITION ON THIS ISSUE. 6. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 3. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURING OF READYMADE SHIRTS AND SELLING IT TO THE RETAILS SHOPS FILED RETURN OF INCOME ON DECLARI NG INCOME OF . 4,42,190 / - FOR THE A.Y. 2009 - 10 AND THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT (INV. ,) , MUMBAI ABOUT THE ACCOMMODATION ENTRIES PROVIDED BY VARIOUS DEALERS AND ASSESSEE WAS ALSO ONE OF THE BENEFICIARY FROM THOSE DEALERS. 3 ITA NO. 4510/MUM/2019 (A.Y: 2009 - 10) SOHANLAL PUNARAMJI SANGAR THE ASSESSMENT WAS REOPENED U/S. 147 OF THE ACT BASED ON THE INFORMATION RECEIVED FROM DGIT(INV.) MUMBAI, THAT THE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES FROM VARIOUS DEALERS WHO ARE SAID TO BE PROVIDING ACCOMMODATION ENTRIES WITHOUT THERE BEING TRANS PORTATION OF ANY GOODS. IN THE RE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THE PURCHASES MADE FROM VARIOUS PARTIES REFERRED IN ASSESSMENT ORDER. 4. INSPITE OF ISSUE OF NUMEROUS NOTICES NONE APPEARED BEFORE THE APPELLATE PROCEEDINGS. THEREFORE, ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT U/S. 144 OF THE ACT IN ORDER TO AVOID TIME BAR FOR COMPLETION OF ASSESSMENT. IN THE RE - ASSESSMENT PROCE EDINGS, ASSESSING OFFICER MADE AN ADDITION IN RESPECT OF DISALLOWANCE OF PURCHASES OF .14,327/ - AS BOGUS PURCHASES AND ADHOC DISALLOWANCE OF .5,00,000/ - FROM OTHER EXPENSES IN THE ASSESSMENT ORDER. ON APPEAL THE LD.CIT(A) CONSIDERING THE EVIDENCES AND V ARIOUS SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE US CHALLENGING THE ORDER OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE OF PURCHASES. 4 ITA NO. 4510/MUM/2019 (A.Y: 2009 - 10) SOHANLAL PUNARAMJI SANGAR 5. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD.CIT(A). 6. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. 7. HEARD BOTH SIDES , PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE ORDER OF THE LD.CIT(A), I FIND THAT THE LD.CIT(A) CO NSIDERED THIS ASPECT OF THE MATTER ELABORATELY WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE AVERM ENTS IN THE ASSESSMENT ORDER AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING AS UNDER: - 5.7. I HAVE CONSIDERED THE SUBMISSIONS CAREFULLY. I HAVE ALSO EXAMINED THE REMAND REPORT SUBMITTED. THE AO HAS NOT SPECIFIED THE PARTY FROM WHOM PURCHASES OF RS. 14,327 / - WAS MADE AND THE VERIFICATION CARRIED OUT IN THIS REGARD IN THE REMAND PROCEEDINGS. FURTHER, THERE IS NO EVIDENCE BROUGHT O N RECORD IN THE ASSESSMENT ORDER OR EVEN IN REMAND PROCEEDINGS TO SUSTAIN T HE ADHOC DISALLOWANCE OF RS. 5, 00, 000 / - . NO SUCH EXPENSES HAVE BEEN SHOWN TO BE FALSE OR BOGUS. THE COPY OF THE ITR FILED IS PERUSED AND THE COLUMNS ARE DULY FILLED IN AND IT IS NOT BLANK. COPY OF AUDIT REPORT HAS BEEN FILED, IN THE APPELLATE PROCEEDINGS, THOUGH IT IS NOT CLEAR WHETHER AUDIT REPORT ALSO PART OF THE ONLINE RETURN FILED ALONG WITH THE ITR. NOW GIVEN THE FACT THAT IN THE REMAND REPORT NO SPECIFIC EVIDENCE HAS BEEN BROUG HT ON RECORD TO SUSTAIN THE ADHOC DISALLOWANCE AND, THEREFORE, THE ADDITIONS MADE SHOULD BE DELETED AND THE CONTENTIONS OF THE ASSESSEE MUST SUCCEED. IN THESE FACTS, THE GROUND OF APPEAL NO. 3 & 4 ARE ALLOWED AND THE ADDITION MADE OF RS 14,327/ - AND RS. 5, 00, 000 / - IS DELETED. 8. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD.CIT(A) AND THE REASONS GIVEN THEREIN, I DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE 5 ITA NO. 4510/MUM/2019 (A.Y: 2009 - 10) SOHANLAL PUNARAMJI SANGAR LD.CIT(A) IN DELETING THE DISALLOWANCE OF PURCHASES OF .14,327/ - . GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE VIRTUAL COURT ON 18.01.2021. SD/ - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 18/01/2021 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM