ASST CIT 19(3), MUMBAI V. S.V. JIWANI, MUMBAI

ITA 4549/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0905 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR A K NAYAK SHRI AN
• Keywords: Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGA RWAL, AM ITA NO. 4549/MUM/2015 ASSESSMENT YEAR 2009-10 ACIT 19(3), MUMBAI VS. M/S. S V JIWANI , 25, 2 ND KHETWANI LANE, 2 ND FLOOR, NARAYAN NIWAS, C P TANK, GOLDEVAL MUMBAI- 400 004 PAN : AACFS5823M (APPELLANT) (RESPONDENT) CO NO. 29/MUM/2017 (ARISING OUT OF ITA NO. 4549/MUM/2015 FOR ASSESSMENT YEAR 2009-10 M/S. S V JIWANI , MUMBAI- 400 004 PAN : AACFS5823M VS. ACIT 19(3), MUMBAI (CROSS-OBJECTOR) (RESPONDENT) FOR THE REVENUE : DR. A K NAYAK FOR THE ASSESSEE : SHRI ANANT PAI DATE OF HEARING : 2 4 .0 4 .2017 DATE OF PRONOUNCEMENT : 03 .05 .2017 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THE AFORESAID APPEAL OF THE DEPARTMENT AND CROSS-O BJECTION OF THE ASSESSEE ARE AGAINST THE ORDER DATED 19.05.2015, OF THE LEARNED CIT(A)-32, MUMBAI, FOR A.Y. 2009-10. ITA NO 4549/MUM//2015 & CO 29/MUM/2017 M/S. S V JIWANI 2 2. ITA NO. 4549/MUM/2015 ASSESSMENT YEAR 2009-10 THE GRIEVANCE OF THE DEPARTMENT IN THE PRESENT APPE AL IS CONFINED TO THE DECISION OF THE CIT(A) IN RESTRICTING THE ADDIT ION MADE ON ACCOUNT OF ALLEGED BOGUS PURCHASES TO 12.5% OF SUCH PURCHASES. 3. BRIEFLY, THE FACTS ARE ASSESSEE - A PARTNERSHIP FIRM, IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.12.20 11, DECLARING TOTAL INCOME OF ` .92,36,071/-. THE ASSESSMENT IN THE CASE OF THE AS SESSEE WAS ORIGINALLY COMPLETED U/S. 143(3) OF THE ACT ON 30.12.2011, DET ERMINING TOTAL INCOME AT ` .93,73,219/-. SUBSEQUENTLY, ON THE BASIS OF THE IN FORMATION AVAILABLE WITH THE AO THAT ASSESSEE HAS INFLATED ITS PURCHASES THR OUGH ACCOMMODATION ENTRIES REOPENED THE ASSESSMENT U/S. 147 OF THE ACT . DURING THE REASSESSMENT PROCEEDINGS, ON THE BASIS OF INFORMATI ON OBTAINED FROM THE SALES TAX DEPARTMENT OF THE GOVERNMENT OF MAHARASHT RA, THE AO FOUND THAT PURCHASES MADE BY THE ASSESSEE TO THE TUNE OF ` .4,50,08,383/- FROM TWENTY THREE PARTIES ARE BOGUS PURCHASES, SINCE SUCH PART IES, AS PER THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTME NT WERE FOUND TO BE HAWALA DEALERS PROVIDING ACCOMMODATION ENTRIES. ACCORDINGLY, THE AO COMPLETED ASSESSMENT BY ADDING BACK THE ALLEGED BOG US PURCHASES OF ` .4,50,08,383/-. ASSESSEE CHALLENGED THE ADDITION I N APPEAL PREFERRED BEFORE ITA NO 4549/MUM//2015 & CO 29/MUM/2017 M/S. S V JIWANI 3 THE CIT(A). THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN CONTEXT OF FACTS AND MATERIALS ON RECOR D, DIRECTED THE AO TO RESTRICT THE ADDITION TO 12.5% BEING PROFIT ON BOGU S PURCHASES ALLEGED TO HAVE BEEN MADE BY THE ASSESSEE. BEING AGGRIEVED DE PARTMENT IS BEFORE US. 4. WE HAVE HEARD THE LEARNED COUNSELS APPEARING FOR BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE IS EXECUTING CIVIL CONTRACT WORK AWARDED MOSTLY BY MCGM. THE CIT(A) H AS NOTED THAT WITHOUT PURCHASING MATERIALS/GOODS IT WOULD NOT HAVE BEEN P OSSIBLE ON THE PART OF THE ASSESSEE TO EXECUTE THE CONTRACT WORK WITH THE MCGM. MOREOVER, THE ASSESSEE IS EXECUTING WORK OF A GOVERNMENT AUTHORIT Y. THEREFORE, THERE CANNOT BE ANY MANNER OF DOUBT WITH REGARD TO THE NA TURE OF WORK OR THE QUANTUM OF WORK CARRIED OUT BY THE ASSESSEE. IT IS EVIDENT FROM RECORD THAT THE AO IS NOT DISPUTING THE TURNOVER OF CONTRACT WO RK EXECUTED BY THE ASSESSEE. THEREFORE, UNLESS THE ASSESSEE PROCURED THE MATERIALS/GOODS, THOUGH MAY NOT BE FROM THE DECLARED SOURCES BUT FRO M SOME OTHER SOURCES, IT WOULD NOT HAVE BEEN POSSIBLE ON THE PART OF THE ASS ESSEE TO EXECUTE WORK AWARDED BY MCGM. THAT BEING THE CASE, THE ENTIRE P URCHASES MADE BY THE ASSESSEE CANNOT BE ADDED BACK AS INCOME BUT ONLY PR OFIT ELEMENT EMBEDDED THEREIN CAN BE TREATED AS INCOME OF THE ASSESSEE. IN AFORESAID VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(A) IN ESTIMATING ITA NO 4549/MUM//2015 & CO 29/MUM/2017 M/S. S V JIWANI 4 PROFIT AT 12.5%. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A). IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. 5. CO NO. 29/MUM/2017 ASSESSMENT YEAR 2009-10 AT THE TIME OF HEARING, THE LEARNED AR, ON THE INST RUCTION OF HIS CLIENT, DID NOT PRESS THE CROSS-OBJECTION. ACCORDINGLY, TH E CROSS-OBJECTION IS DISMISSED AS NOT PRESSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL AND THE A SSESSEES CROSS- OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DAY OF MAY 2017. SD/- SD/- (MANOJ KUMAR AGGARWAL) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI; DATED : 3 RD MAY, 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI