ASST. CIT-11(1)(1), Mumbai V. M/S RACHETA INTERIORS PVT LTD., Mumbai

ITA 4541/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6327 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! .#$% , ( ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER. . 4541 / / 2019 (. .2011-12 ) ITA NO. 4541/MUM/2019 (A.Y.2011-12) ASSTT. COMMISSIONER OF INCOME TAX-11(1)(1), 2 ND FLOOR, ROOM NO.204, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 / VS. : / APPELLANT M/S. RACHETA INTERIORS PVT. LTD., 59, APPOLLO INDUSTRIAL PREMISES, OFF.MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI 400 093 PAN: AAECR3723N : / RESPONDENT ASSESSEE BY : SHRI DEVENDRA JAIN REVENUE BY : SHRI SANJAY J. SETHI / DATE OF HEARING : 11/01/2021 / DATE OF PRONOUNCEMENT : 18/01/2021 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-18, MUMBAI ( IN SHORT THE CIT(A)) D ATED 26/04/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECOR DS ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF INTERIOR DECORATORS AND CIVIL CONTRACTOR. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IM PUGNED ASSESSMENT YEAR ON 2 ITA NO. 4541/MUM/2019 (A.Y.2011-12) 15/09/2011 DECLARING TOTAL INCOME OF RS.41,96,390/ -. THE RETURN OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). SUBSEQUENTLY, ON THE BASIS INFO RMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THA T ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.5,48,211/- FRO M M/S.MAHALAXMI CORPORATION, A DECLARED HAWALA DEALER, THE ASSES SMENT FOR ASSESSMENT YEAR 2011-12 WAS REOPENED. IN REASSESSMENT PROCEEDING S, THE ASSESSEE WAS ASKED TO PRODUCE DOCUMENTS TO SUBSTANTIATE GENUINENESS OF PURCHASES. THE ASSESSEE COULD NEITHER PRODUCE ANY DOCUMENT NOR CO NFIRMATION FROM SUPPLIER OF THE GOODS TO PROVE GENUINENESS OF PURCHASES. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. A GGRIEVED BY THE ASSESSMENT ORDER DATED 31/08/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A ) AFTER EXAMINING THE FACTS OF CASE AND AFTER CONSIDERING VARIOUS DECISIONS OF HIG HER FORUMS RESTRICTED THE ADDITION TO 12.5% OF THE BOGUS PURCHASES. AGAINST THE FINDING OF THE CIT(A) THE REVENUE IS IN APPEAL. 3. SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDING OF CIT(A) IN RESTRICTING THE ADDITION TO 12.5% OF BOGUS PURCHASE S. THE LD.DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE DECISION OF H ON'BLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEINS VS. DCIT IN SLP NO.(C) 769 OF 2017 D ECIDED ON 16/01/2017. 4. SHRI DEVENDRA JAIN, APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL BY THE REVENUE. THE LD.AUTHORIZED REPRESENTATIVE OF THE A SSESSEE SUBMITTED THAT THE TURNOVER OF THE ASSESSEE HAS BEEN ACCEPTED BY T HE DEPARTMENT. THE 3 ITA NO. 4541/MUM/2019 (A.Y.2011-12) ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ASS ESSEE . THEREFORE, ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. IT IS ONL Y THE PROFIT ELEMENT, IF ANY EMBEDDED IN SUCH PURCHASES THAT CAN BE ADDED. THE CIT(A) HAS RESTRICTED THE ADDITION TO 12.5% OF ALLEGED BOGUS PURCHASES, THE ASSESSEE HAS ACCEPTED THE SAME. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE SOLITARY ISSUE RAISED IN THE PRESENT APPEAL BY THE REVENUE I S THE RELIEF GRANTED TO THE ASSESSEE IN RESPECT OF BOGUS PURCHASES BY THE CIT(A ). UNDISPUTEDLY, THE TURNOVER DECLARED BY THE ASSESSEE HAS BEEN ACCEPTE D BY THE REVENUE. WITHOUT INPUTS THE ASSESSEE COULD NOT HAVE PERFORME D THE JOB WORK. UNDER SUCH LIKE ALLEGED BOGUS TRANSACTIONS, IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTION THAT HAS TO BE BROUGHT TO TAX. (RE: PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 O F 2017 DECIDED ON 15/07/2019 BY HON'BLE BOMBAY HIGH COURT) . IN THE PRESENT CASE, CIT(A) HAS RESTRICTED THE ADDITION BY ESTIMATING G.P AT 12.5%. THE ASSESSE E HAS ACCEPTED THE SAME. WE CONCUR WITH THE FINDINGS OF CIT(A). ACCORDINGL Y, THE SAME ARE UPHELD AND THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 18 TH DAY OF JANUARY, 2021. SD/- SD/- (S.RIFAUR RAHMAN) (VIKAS AWASTHY) ( / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, -'/ DATED: 18/01/2021 VM , SR. PS(O/S) 4 ITA NO. 4541/MUM/2019 (A.Y.2011-12) COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. /0 / THE RESPONDENT. 3. 10 ( )/ THE CIT(A)- 4. 10 CIT 5. 23/0' , . . . , / DR, ITAT, MUMBAI 6. 345$6 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI