Sri. MURLI MANOHAR AGARWAL, MUMBAI V. ITO-19(2)(3), MUMBAI

ITA 4575/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6965 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 23-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JYOTI LAKSHMI NAYAKLD
• Assessee Lawyers: NIRAJ PUNAMIYALD
• Keywords: Bogus purchase; Accommodation entries
• Section: 145(3); 148

Judgement Text

ITA NO.4575-76/MUM/2018 SHRI MURLI MANOHAR AGARWAL ASSESSMENT YEARS :2008-09 & 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4575/MUM/2018 ( / ASSESSMENT YEAR : 2008-09 ) & ./ I.T.A. NO.4576/MUM/2018 ( / ASSESSMENT YEAR : 2011-12 ) SHRI MURLI MANOHAR AGGARWAL C/O. AVI GEMS DC-6210, BHARAT DIAMOND BOURSE BANDRA KURLA COMPLEX MUMBAI-400 051. / VS. INCOME TAX OFFICER - 19(2)(3) MATRU MANDIR MUMBAI. &' ./ ./PAN/GIR NO. AABPA-4295-N ( ') /APPELLANT ) : ( *+') / RESPONDENT ) ASSESSEE BY : SHRI NIRAJ PUNAMIYA-LD.AR REVENUE BY : MS. JYOTI LAKSHMI NAYAK-LD. DR / DATE OF HEARING : 04/02/2020 / DATE OF PRONOUNCEMENT : 05/02/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY ASSESSEE FOR ASSESSMENT YEA RS [IN SHORT REFERRED TO AS AY] 2008-09 AND 2011-12 CONTEST SE PARATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY. SINCE ISSUES ARE COMMON I.E. ESTIMATED ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES, THE APPEALS WERE HEARD TOGETHER AND ARE NOW BEING DISPOSED-OFF BY WA Y OF THIS ITA NO.4575-76/MUM/2018 SHRI MURLI MANOHAR AGARWAL ASSESSMENT YEARS :2008-09 & 2011-12 2 CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE (AR) SUBMITT ED THAT LEGAL GROUNDS CHALLENGING THE VALIDITY OF REASSESSMENT PR OCEEDINGS ARE NOT BEING PRESSED UNDER BOTH THE APPEALS. IN THE ABOVE BACKGROUND, WE FIRST TAKE UP APPEAL FOR AY 2008-09. WE HAVE CAREFULLY HE ARD THE RIVAL SUBMISSIONS AND PERUSED RELEVANT MATERIAL ON RECORD . OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEALS WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. ITA NO. 4575/MUM/2018, AY 2008-09 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDI VIDUAL STATED TO BE ENGAGED IN TRADING OF DIAMONDS WAS ASSESSED FOR YEA R UNDER CONSIDERATION U/S143(3) R.W.S. 147 ON 29/03/2016 WH EREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.102.50 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS.98.52 LACS FILED B Y THE ASSESSEE ON 30/09/2008 WHICH WAS PROCESSED U/S 143(1). 2.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION THAT THE ASSESSEE AVAILED ACCOMMODATION ENTRIES FROM BHANWARLAL GROUP COMPANIES , THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW VIDE ISSUANC E OF NOTICE U/S 148 ON 17/03/2015 WHICH WAS FOLLOWED BY STATUTORY NOTIC ES WHEREIN THE ASSESSEE WAS DIRECTED TO FILE REQUISITE DETAILS AND SUBSTANTIATE PURCHASE TRANSACTIONS. 2.3 IT TRANSPIRED THAT THE ASSESSEE REFLECTED AGGRE GATE PURCHASES OF RS.37.25 LACS FROM TWO GROUP ENTITIES AND ARMED WIT H INVESTIGATION CARRIED OUT IN THE CASE OF BHANWARLAL GROUP COMPANIES, LD. AO TO PROCEEDED TO TREAT THESE PURCHASES AS NON-GENUINE P URCHASES. AFTER CONSIDERING ASSESSEES SUBMISSIONS AND FACTS ON REC ORD, LD.AO REJECTED ITA NO.4575-76/MUM/2018 SHRI MURLI MANOHAR AGARWAL ASSESSMENT YEARS :2008-09 & 2011-12 3 ASSESSEES BOOKS OF ACCOUNTS U/S 145(3) AND ESTIMAT ED ADDITIONS OF8% AGAINST THESE PURCHASES WHICH CAME TO RS.2.98 LACS. 3. THE LEARNED FIRST APPELLATE AUTHORITY, AFTER CON SIDERING ASSESSEES SUBMISSIONS AND THE NATURE OF TRADE, REDUCED THE ES TIMATION TO 5%. STILL AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEF ORE US. 4. UPON DUE CONSIDERATION, WE ARE OF THE OPINION TH AT THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL PARTICU LARLY WHEN THE ASSESSEE WAS INTO TRADING ACTIVITIES. THE SALES TUR NOVER HAS NOT BEEN DISPUTED / DISTURBED BY THE REVENUE. THE ASSESSEE W AS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIERS WERE THROUGH BANKING CHANNELS. HOWEVER, AT THE SAME TIME , THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM T HE TRANSACTIONS. THE SEARCH PROCEEDINGS INDICATED THAT THE SAID SUPPLIER S WERE ACTING MERELY AS PAPER ENTITIES. THE STATED FACTUAL MATRIX, IN OU R CONSIDERED OPINION, WOULD MAKE IT A FIT CASE TO MAKE ESTIMATED ADDITION S TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MAT ERIAL IN THE GREY / UNORGANIZED MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LOWER AUTHORITIES HAVE RIGHTLY DON E SO. THEREFORE, FINDING THE ESTIMATION OF 5% TO BE QUITE FAIR AND R EASONABLE, WE DECLINE TO INTERFERE IN THE IMPUGNED ORDER. THE APPEAL STAN DS DISMISSED. ITA NO. 4576/MUM/2018, AY 2011-12 5. FACTS ARE PARI-MATERIA THE SAME IN THIS YEAR. TH E ASSESSEE WAS SIMILARLY SADDLED WITH ESTIMATED ADDITIONS OF 3% BY LD. AO. THE SAME, UPON CONFIRMATION BY LD. CIT(A), IS UNDER FURTHER A PPEAL BEFORE US. FACTS BEING PARI-MATERIA THE SAME, FINDING THE ESTIMATION TO BE QUITE FAIR AND ITA NO.4575-76/MUM/2018 SHRI MURLI MANOHAR AGARWAL ASSESSMENT YEARS :2008-09 & 2011-12 4 REASONABLE, WE DECLINE TO INTERFERE IN THE IMPUGNED ORDER IN THE MATTER OF ESTIMATION. CONCLUSION 6. BOTH THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH JANUARY, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/02/2020 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT CONCERNED 5. 34*-5 , 5 , / DR, ITAT, MUMBAI 6. 4678 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.