ADVANCE COMPSEALS PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER 9(1)(1), MUMBAI

ITA 478/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7011 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY OJHA
• Keywords: Bogus purchase; Rejection of books of accounts; Reason to believe; Set aside
• Section: 143(3); 133(6); 143(1); 64; 148; 6

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI C.N PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.478 ,480 & 481 / MUM/2018 ( / ASSESSMENT YEAR : 2008 - 09, 2010 - 11 AND 2011 - 12) ADVANCE COMPSEALS PRIVATE LTD., 406, GOLDEN CHAMBERS, NEW LINK ROAD, ANDHERI(E), MUMBAI - 400053 / V. ITO 9(1)(1) CHURCHGATE , MUMBAI ./ PAN : AAECA7292F ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI. ROSHAN OCHANI (AR) REVENUE BY: SHRI. AJAY OJHA (DR) / DATE OF HEARING : 10.07.2019 / DATE OF PRONOUNCEMENT : 31 .07.2019 / O R D E R PER BENCH: THESE THREE APPEAL S , FILED BY ASSESSEE, BEING ITA NO. 478, 480 TO 481/ MUM/2018 , ARE DIRECTED AGAINST THREE SEPARATE APPELLATE ORDER S ALL DATED 15.09.2017 PASSED IN APPEAL NO. CIT(A) - 16/IT - 08/ITO - 9(1)(1)/2016 - 17, PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 16, MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEARS(AY) 2008 - 09 AND A PPELLATE ORDER IN APPEAL NO . CIT(A) - 16/IT - 09/ITO - 9(1)(1)/2016 - 17 F OR AY: 2010 - 11 AND A PPELLATE ORDER IN APPEAL NO. CIT(A) - 16/IT - 10/ITO - 9(1)(1)/2016 - 17 FOR AY: 2011 - 12 , THE APPELLATE PROCEEDINGS HAD ARISE N BEFORE LEARNED CIT(A) FROM THREE SEPARATE ASSESSMENT ORDER (S) ALL DATED 29.02.2016 PASSED BY LEARNED I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 2 ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) R.W.S. 147 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR AYS 2008 - 09, 2010 - 11 AND 2011 - 12 RESPECTIVELY . SINCE COMMON ISSUES ARE INVOLVED AND FACTS ARE SIMILAR IN ALL THESE THREE A PPEASL , WE WILL BE FIRST TAKING UP APPEAL FILED BY THE ASSESSEE FOR AY:2008 - 09. 2. T HE GROUNDS OF APPEAL RAISED BY A SSESSEE IN MEMO OF APPEAL FILED WITH THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) IN ITA NO. 478/MUM/2018 FOR AY 2008 - 09, READ AS UNDER: - 1. THE LD. AO HAS ERRED IN LAW AND ON FACTS, IN REOPENING OF THE CASE U/S 147. HE MERELY RELIED ON THE INFORMATION RECEIVED FROM THE MAHARASHTRA VAT DEPARTMENT AND CIT (A) HAVE FAILED TO APPRECIATE THE CONTENTION OF THE AS SESSEE THAT AO COULD NEVER HAD 'REASONS TO BELIEVE' THAT INCOME CHARGEABLE TO TAX HAD ESCAPED THE ASSESSMENT AND CONSEQUENTLY THE REOPENING IS BAD IN LAW AND ULTRA - VIRUS. THE LD. AO AND / CIT (A) FAILED TO APPR ECIATE THAT 'SUSPICIOUS DEALERS ' LIST BY MVAT DEPT. DO NOT MEAN THAT PURCHASES ARE BOGUS. 2. THE LT CIT (A) HAVE ERRED IN LAW AND ON FACTS IN HOLDING THE IMPUGNED ADDITIONS IN THE ASSESSMENT YEAR 2008 - 09. THE ADDITIONS ARE CONFIRMED WITHOUT UNDERSTANDING THE NATURE OF THE BUSINESS OF THE ASSESSEE. ASS ESSEE BEING TRADER THERE CANNOT BE ANY SALE WITHOUT CORRESPONDING PURCHASE AND HENCE IT IS NOT POSSIBLE THAT THE PURCHASE CAN BE BOGUS. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE MATERIAL PURCHASED DURING THE YEAR ARE DULY ACCOUNTED IN THE BOOK OF THE APPELLANT AND THE SAME ARE SUPPORTED BY PROPER DOCUMENTARY EVIDENCES. THE SAID MATERIAL WAS SUBSEQUENTLY SOLD BY THE APPELLANT AND THE PROFIT EARNED THEREON IS OFFERED FOR TAX. HENCE, ADDITION OF ENTIRE ALLEGED BOGUS PURCHASES IS UNJUSTIFIED AND THE SAME MAY BE DELETED. 4. THE LD. CIT(A), FURTHER, FAILED TO THE APPRECIATE THAT THE LD. A.O. HAS NEITHER REJECTED THE BOOKS OF ACCOUNTS OF THE APPELLANT NOR POINTED ANY DISCREPANCIES IN THE SAME. THE LD. A.O. ALSO ACCEPTED THE SALES MADE DURING THE YEAR. HENCE, THE ADDITIONS MADE OF THE PURCHASES IN THE SAID CIRCUMSTANCES IS UNJUSTIFIED AND THE SAME MAY BE DELETED. 5. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS DISREGARDING THE ENTIRE SETS OF EVIDENCES CONTAINING VARIOUS DOCUMENTS SUBMITTED BEFORE HIM BEFORE TH E DISPOSAL OF THE APPEAL. 6. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER, AMEND OR DROP ANY OR ALL GROUNDS OF APPEAL AT THE TIME OF THE APPEAL PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING CUS TOMIZED ENGINEERING COMPONENTS AND IS I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 3 ALSO THE SOLE DISTRIBUTOR OF M/S. GREENE TWEED & CO. PTE. LTD., SINGAPORE & M/S. ASTRUM (UK) LTD. CATERING PRODUCTS FOR AEROSPACE, DEFENCE, FLUID HANDLING (PETROCHEMICALS, REFINERIES, FERTILISERS, ETC) , OIL FIELDS ETC. 3.2 THE CASE OF THE ASSESSEE WAS REOPENED BY THE AO U/S. 1 47 OF THE 1961 ACT BASED ON THE INFORMATION RECEIVED FROM MAHARASHTRA VAT DEPARTMENT THROUGH DGIT(INV.) , MUMBAI THAT THE ASSESSEE IS ENGAGED IN MAKING BOGUS PURCHASES WHEREIN BILLS WERE OBT AINED FROM ACCOMMODATION ENTRY PROVIDERS WITHOUT OBTAINING ANY MATERIAL PHYSICALLY. THE FACTUM OF ASSESSEE BEING INVOLVED IN BOGUS PURCHASES/HAWALA TRANSACTIONS HAD ALSO CAME TO LIGHT DURING THE ASSESSMENT PROCEEDINGS CONDUCTED BY THE AO IN THE CASE OF TH E ASSESSEE FOR AY:2009 - 10 . 3.3 THE REASONS WERE RECORDED BY THE AO FOR REOPENING OF THE CONCLUDED ASSESSMENT BY INVOKING PROVISIONS OF SECTION 147 OF THE 1961 ACT, AS UNDER: - 1. THE ASSESSEE COMPANY FLE D ITS E - RETURN OF INCOME FOR A.Y. 2008 - 09 ON 08.0 8. 2008 DECLARING TOTAL INCOME OF RS.5,70,300/. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 12.2.2009. NO SCRUTINY ASSESSMENT HAS BEEN COMPLETED F OR THE RELEVANT ASSESSMENT YEAR. 2. DURING THE COURSE OF RE - ASSESSMENT PROCEEDINGS FOR A . Y . 2009 - 10 IT CAM E TO KNOWLEDGE THAT THE ASSESSEE WAS INVOLVED IN BOGUS PURCHASE/HAWALA TRANSACTIONS DURING THE F.Y.2007 - 08 RELEVANT TO A.Y.2008 - 09.THE ASSESSEE WAS INVOLVED IN BOGUS PURCHASE TRANSACTION AMOUNTING TO RS.1,41,21,236/ - DURING THE F.Y.2007 - 08 RELEVANT TO THE A.Y.2008 - 09. THE ASSESSEE HAD MADE THESE BOGUS PURCHASE THROUGH THE FOLLOWING PARTIES. SR. NO NAME OF HAWALA PARTY ADDRESS TIN BILL AMOUNT 1 DHARMESH TRADING COMPANY B - 203,RAM TOWER, OPP. YOGI NAGAR, OFF. LINK ROAD,BORI VALI(W , MUMBAI 27040154641V 47,03,875 2 OM ENTERPRISES D - 102, DHARMA NAGAR, OPP. JAYRAJ NAGAR, OFF. NEW LINK 27680554123V 45,38,753 I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 4 ROAD, BORIVALI(W}, MUMBAI - 400091 3 MEETALI INDUSTRIES C/1203, HULAS BASTI GARDEN TOWER, KANDIVALI(W), MUMBAI - 67 2742053 1 665V 15,47,025 4 BHARAT INDUSTRIAL CORPORATION 4 T AMARTLAL AMARCHAND BLDG, C.O.D.ROAD, OFF MANCHHUBAHI RD., MALAD(E), MUMBAI - 97 27420502953V 20,64,632 5 ADASHWER TRADERS 15/117A, MHB COLONY, MALWANI, MALAD (W) MUMBAI - 400095 27600537483V 12,66,951 TOTAL 1,41,21,236 3. FURTHER ON VERIFICATION OF THE WEBSITE OF MAHARASHTRA SOLES TAX DEPARTMENT (MAHAVAT.GOV. IN) SHOWS THAT THESE PARTIES HAVE BEEN DECLARED AS HAWALA DEALERS AND THEIR TIN HAVE BEEN CANCELLED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A. Y.2009 - 10, NOTICE U/S 133(6) OF THE I . T.ACT,1961 WERE ISSUED TO THE ABOVE PARTIES TO VERIFY THE GENUINEN ESS OF CREDITORS SHOWN IN THE NAME OF THE ABOVE PARTIES WHICH WERE RETURNED AS UN - SERVED. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSES AND ASKED TO PRODUCE THE ABOVE PARTIES BUT IT HAS FAIL ED TO PRODUCE THE ABOVE PARTIES . 5. FURTHER SHRI ASHISH BHARAT SHAH, PROPRIETOR OF M/S ADASHWER TRADER FILED AFF IDAVIT ON 22.11. 2011 BEFORE THE SALES TAX DEPARTMENT STATING THAT MR. SANJAY DHEDIA WAS OPERATING ABOVE CONCERN & WAS ISSUING ACCOMMODATION BILLS WITHOUT EFFECTING ANY SALES OR PURCHASE OR GIVEN/TAKEN PHYSICAL DELIVERY OF GOODS. & FROM THE ABOVE FACTS, IT IS CLEAR THAT THE ASSESSEE HAD BOOKED BOGUS PURCHASE IN ITS BOOKS OF ACCOUNT TO THE TUNE OF RS.1,41,21,236/ - AND FAILED TO DISCLOSE .FULLY AND TRULY ALL MATERIAL FACTS IN RESPECT OF PURCHASES NECESSAR Y FOR ITS ASSESSMENT FOR THE A.Y.2008 - 09. THUS, THE ASSESSEE HAS DEBITED BOGUS PURCHASE AND SUPPRESSED THE INCOME. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT IN THE CASE OF THE ASSESSEE, INCOME CHARGEABLE TO TAX OF RS.1,41,21,236/ - HAS ESCAPED ASS ESSMENT FOR A.Y.2008 - 09 WITHIN THE MEANING OF SEC. 147 OF THE I.T.ACT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENTS AND THEREFORE IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 OF THE I . T . .ACT, 1961,BECAUSE OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE FACT TRULY AND FULLY IN. ITS RETURN OF INCOME. I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 5 THE AFORESAID REASONS FOR REOPENING OF THE CONCLUDED ASSESSMENTS BY INVOKING PROVISIONS OF SECTION 147 WERE FURNIS HED TO THE ASSESSEE BY THE AO, VIDE LETTER DATED 05.05.2015. EARLIER NOTICE DATED 09.03.2015 U/S 148 OF THE 1961 ACT WAS ISSUED BY THE AO TO THE ASSESSEE WHICH RETURNED UNSERVED BY POSTAL AUTHORITIES. LATER , FRESH NOTICE DATED 23.03.2015 WAS ISSUED BY THE AO U/S 148 TO THE ASSESSEE, WHICH WAS DULY SERVED ON THE ASSESSEE. THE ASSESSEE VIDE LETTER DATED 24.06.2015 SUBMITTED THAT RETURN OF INCOME FILED BY IT ON 08.08.2008 REPRESENTS TRUE AND CORRECT RETURN OF THE ASSESSEE FOR AY: 2008 - 09. 3.4 THE ASSESSEE HA D ALLEGEDLY MADE BOGUS PURCHASES TO THE TUNE OF RS. 1,41,21,236/ - FROM FOLLOWING PARTIES, AS DETAILED HERE UNDER: - NAME TIN AMOUNT DHARMESH TRADING COMPANY 27040154641V 47,03,875 OM ENTERPRISES 27680554123V 45,38,753 MEETALI INDUSTRIES 27420531665V 15,47,025 BHARAT INDUSTRIAL CORPORATION 27420502953V 20 , 64 , 632 ADASHWER TRADERS 27600537483V 12,66,951 TOTAL 1,41,21,236 3.5 DURING THE COURSE OF REASSESSMENT PROCEEDING S CONDUCTED BY THE AO U/S 147 READ WITH SECTION 143(3) OF THE 1961 ACT , THE ASSESSEE SUBM ITTED DETAILS OF GOODS PURCHASED FROM ABOVE PARTIES , COPIES OF PURCHASE BILLS AND DELIVERY CHALLANS OF THE ABOVE PURCHASE PARTIES ONLY . W ITH RESPECT TO THE ABOVE PURCHASE PARTIES , IN ORDER TO MAKE FURTHER ENQUIRIES NOTICES WERE ISSUED BY AO U/S. 133(6) TO ALL THE FIV E PARTIES FROM WHOM ALLEGEDLY THE ASSESSEE MADE BOGUS PURCHASES, BUT THESE NOTICES RETURNED UN - SERVED BY POSTAL AUTHORITIES WITH REMARKS N OT KNOWN/LEFT . T HE WARD INSPEC TOR WAS DEPUTED BY THE AO TO SERVE THE I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 6 NOTICES U/S 133(6) BUT NONE OF THE CONCERN S WERE FOUND OPERATING FROM THE GIVEN ADDRESS ES. T HE AO CONDUCTED ENQUIRES FROM THE BANK OF THESE PARTIES AND BANK STATEMENT OF THESE PARTIES WERE OBTAINED FROM THE BANKS DIRE CTLY BY THE AO IN RESPONSE TO THE NOTICES ISSUE D U/S. 133(6) OF THE 1961 ACT . IT WAS OBSERVED BY THE AO FROM BANK STATEMENT OF THESE PARTIES THAT THERE WERE IMMEDIATE WITHDRAWAL OF CASH/TRANSFER OF FUNDS AFTER CLEARING OF THE CHEQUES IN THE SAID BANK ACCOU NTS. THE AO ALSO OBSERVED THAT OTHER PARTIES LISTED IN THE LIST OF BOGUS ACCOMMODATION ENTRY PARTIES PREPARED BY MAHARASHTRA VAT DEPARTMENT ALSO FOUND MENTION ED IN THE BANK STATEMENT S OF THESE PARTIES . THE AO OBSERVED THAT THIS LEND CREDENCE TO THE FACT T HAT THE SAID BANK ACCOUNTS WERE NOT USED FOR ANY GENUINE BUSINESS PURPOSES BUT MERELY TO GIVE COLOR TO BOGUS TRANSACTIONS. THE ASSESSEE WAS ASKED BY THE AO TO PRODUCE THE AFORE SAID PARTIES BEFORE IT BUT ASSESSEE FAILED TO PRODUCE THE AFORE SAID PARTIES BEFORE THE AO . THE ASSESSEE HAD PRODUCED BEFORE THE AO DETAILS OF PURCHASES, PURCHASE BILLS, DELIVERY CHALLANS AND DETAIL OF PAYMENT MADE TO THESE PARTIES . THE AO OBSERVED THAT THERE ARE NO SIGNATURES OF THE RECEIVER OF THE GOODS AND NO STAMP OF RECEIVING PARTY ON DELIVERY CHALLANS . THE AO ALSO OBSERVED THAT THERE IS ALSO NO EVIDENCE FILED WITH RESPECT TO TRANSPORTATION OF GOODS. THE AO OBSERVED THAT DESPITE BEING SPECIFICALLY ASKED TO PROVE CONSUMPTION OF MATERIAL, THE ASSESSEE BEING MANUF ACTURE HAS NOT PRODUCED REGISTER WHEREIN DETAILS OF DESCRIPTION AND QUANTITY OF MATERIAL PURCHASED, MATERIAL CONSUMED AND DETAILS OF FINAL PRODUCTS MANUFACTURED HAVE BEEN MAINTAINED. THE AO ALSO OBSERVED THAT THE PARTIES NAMELY DHARMESH TRADING COMPANY , M/S BHARAT INDUS TRIAL CORPORATION AND M/S ADASHWER TRADERS HAVE ACCEPTED BEFORE THE SALES TAX AUTHORITIES THAT THESE CONCERNS ARE NOT DOING ANY GENUINE BUSINESS. THE AO ALSO OBSERVED THAT PROPRIETOR OF M/S DHARMESH TRADING COMPANY IS ALSO PROPRIETOR OF M/S OM ENTERPRISES . THE AO ALSO OBSERVED THAT THE ASSESSEE HAS NOT MADE ANY PAYMENTS TO M/S BHARAT INDUSTRIAL CORPORATION DURING THE YEAR UNDER CONSIDERATION. THE AO HAD ALSO OBSERVED FROM THE BANK ACCOUNTS OF THESE PARTIES THAT THESE PARTIES I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 7 HAVE IMMEDIATELY WITHDRAWN/TRAN SFERRED THE FUNDS FROM THEIR BANK ACCOUNYTS. THE AO MADE ADDITIONS TO THE TUNE OF 100% OF THE ALLEGED BOGUS PURCHASES TO THE INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDER DATED 29.02.2016 PASSED BY THE AO U/S 143(3) READ WITH SECTION 147 OF THE 1961 ACT . 4 . B EING AGGRIEVED BY ASSESSMENT FRAMED BY THE AO VIDE ASSESSMENT ORDER DATED 29.02.2016 U/S 143(3) READ WITH SECTION 147 OF THE 1961 ACT, THE ASSESSEE FILED FIRST APPEAL BEFORE LEARNED CIT(A) BUT DESPITE NOTICES ISSUED BY LEARNED CIT(A) FOR HEARING OF T HE APPEAL FILED BY THE ASSESSEE , THE ASSESSEE DID NOT APPEAR BEFORE LD. CIT(A) WHO CONFIRM ED THE ADDITIONS BOTH ON T HE LEGAL GROUND AS TO CHALLENGE TO REOPENING OF THE CONCLUDED ASSESSMENT U/S. 147 OF THE 1961 ACT, AS WELL ADDITION ON MERIT WERE UPHELD /C ONFIRMED BY LD. CIT(A) VIDE A PPELLATE ORDER DATED 15.09.2017. 5 . AGGRIEVED BY APPELLATE ORDER DATED 15.09.2017 PASSED BY LEARNED CIT(A), THE ASSE SSEE HA S FILED AN APPEAL BEFORE THE TRIBUNAL . LD. COUNSEL FOR THE ASSESSEE ADVOCATE MR. ROSHAN OCHANI FILED AN APPLICATION FOR ADJOURNMENT BUT AT THE SAME TIME IT WAS ALSO STATED BEFORE THE B ENCH BY LD. COUNSEL FOR THE ASSESSEE MR. ROSHAN OCHANI THAT ASSESSEE COULD NOT PRODUCE PROPER DOCUMENT S BEFORE THE AO AS SOME OF THE DOCUMENTS WERE SEIZED BY SALES TAX DEPARTMENT AND ALSO THAT THE T HEN COUNSELS OF THE ASSESSEE DID NOT MADE PROPER REPRESENTATION BEFORE THE AUTHORITIES BELOW , WHICH LED TO 100% ADDITIONS BEING MADE BY THE AUTHORITIES BELOW OF THE ENTIRE AL LEGED BOGUS PURCHASES . IT WAS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE BENCH THAT THERE WAS NO APPEARANCE OF THE ASSESSEE BEFORE LD. CIT(A) AS NONE APPEARED BEFORE THE LD. CIT(A) ON BEH ALF OF THE ASSESSEE DURING APPELLATE PROCEEDINGS W HICH LED LD. CIT(A) TO PASS AN EX - PARTE ORDER AGAINST THE ASSESSEE DISMISSING ITS APPEAL . THE LD. COUNSEL FOR THE ASSESSEE HAD PRAYED THAT ONE MORE OPPORTUNITY BE GRANTED TO THE ASSESSEE IN THE INTEREST OF JUSTICE WHEREIN THE STATEMENT WAS MADE BEFORE THE BENCH BY AFORESAID LEARNED COUNSEL OF THE I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 8 ASSESSEE THAT THE ASSESSEE WILL LEAD ALL RELEVANT AND CREDIBLE EVIDENCES SUCH AS PURCHASES BILLS, DELIVERY CHALLANS, EVIDENCES OF TRANSPORTATION, STOCK RE CORD , CONSUMPTION DETAILS OF THE MATERIAL , CORRELATION WITH PRODUCTION OF FINAL PRODUCT , EXCISE RECORDS ETC IN ORDER TO PROVE THAT THE PURCHASES MADE BY ASSESSEE FROM THESE FIVE PARTIES WERE GENUINE PURCHASES AND NO ADDITIONS WERE WARRANTED IN THE HANDS OF THE ASSESSEE . THE LD. COUNSEL FOR THE ASSESSEE ALSO SU BMITTED SAMPLE PURCHASES INVOICES AND INVOICES RAISED BY THE ASSESSEE FOR AY 2008 - 09 ALONG WITH A CHART TO CORRELATE PURCHASES WITH SALES TO CONTEND ITS POINT THAT PURCHASES ARE DULY RECONCILED WITH THE SALES . THUS, IT IS PRAYED BY LEARNED COUNSEL FOR THE ASSESSEE THAT IF AN OPPORTUNITY IS GRANTED TO THE ASSESSEE THEN THE ASSESSEE WILL PRODUCE ALL THE RELEVANT DOCUMENTS / EVIDENCES WHICH CAN THEN BE VERIFIED BY THE AUTHORITIES BELOW AND APPROPRIATE ORDERS BE THEN PASSED ON MERITS IN ACCORDANCE WITH LAW . THE LD. DR ON THE OTHER HAND RELIED UPON THE APPELLATE ORDER PASSED BY LD. CIT(A) AND SUBMITTE D THAT APPELLATE ORDER PASSED BY LD. CIT(A) B E UPHELD. 6 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAV E OBSERVED THAT THE ASSESSEE IS MANUFACTURER AND IS ENGAGED IN THE BUSINESS OF PROVIDING CUSTOMIZED ENGINEERING COMPONENTS AND IS ALSO THE SOLE DISTRIBUTOR OF M/S. GREENE TWEED & CO. PTE. LTD., SINGAPORE & M/S. ASTRUM (UK) LTD. CATERING PRODUCTS FOR AEROSP ACE, DEFENCE, FLUID HANDLING (PETROCHEMICALS, REFINERIES, FERTILISERS, ETC) , OIL FIELD ETC. . THE ASSESSEE HAS , INTER - ALIA , MADE PURCHASES FROM FOLLOWING FIVE PARTIES AGAINST WHICH INFORMATION WAS RECEIVED BY THE AO FROM MAHARASHTRA VAT DEPARTMENT THRO UGH DGIT(INV.), MUMBAI T HAT THESE FIVE PARTIES ARE INDULGING IN ISSUING BOGUS PURCHASE BILLS WITHOUT SUPPLYING ANY MATERIAL PHYSICALLY, AS UNDER: NAME TIN AMOUNT DHARMESH TRADING COMPANY 27040154641V 47,03,875 I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 9 OM ENTERPRISES 27680554123V 45,38,753 MEETALI INDUSTRIES 27420531665V 15,47,025 BHARAT INDUSTRIAL CORPORATION 27420502953V 20,64,632 ADASHWER TRADERS 27600537483V 12,66,951 TOTAL 1,41,21,236 THE FACTUM OF THESE PARTIES BEING BOGUS ACCOMMODATION ENTRY PROVIDERS ALSO CAME TO NOTICE OF THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONDUCTED BY THE AO FOR AY: 2009 - 10. B ASED ON THE ABOVE TANGIBLE INCRIMINATING MATERIAL WHICH CAME TO THE NOTICE OF THE AO, THE CASE OF THE ASSESSEE WAS REOPENED BY THE AO BY INVOKING PROVISIONS OF SECTION 147 OF THE 1961 ACT WHEREIN NOTICE DATED 09.03.2015 U/S. 148 OF THE ACT WAS ISSUED BY THE AO , WHICH WAS AFTER THE END OF FOUR YEARS FRO M THE END OF THE AY: 2008 - 09( HOWVER, NOTICES U/S 147 OF THE 1961 ACT WERE ISSUED WITHIN FOUR YEARS FROM END OF AY: 2010 - 11 AND 2011 - 12) BUT WITHIN SIX YEARS FROM THE END OF THE ASSESSMENT YEAR. THE ASSESSEE HAS PRODUCED PURCHASE BILLS, DELIVERY CHALLANS , DETAIL OF PURCHASES AND PAYMENTS PROOF , WHEREIN PAYMENT S TOWARDS THESE PURCHASES WERE CLAIMED TO BE MADE THROUGH BANK ING CHANNEL. THE ENQUIRIES WERE MADE BY THE AO BY CALLING INFORMATION FROM ALL THESE PARTIES DIRECTLY VIDE NOTICES ISSUED U/S. 133(6) WHICH RETURNED UN - SERV ED . THE WARD INSPECTOR WHO WAS DEPUTED BY THE AO TO SERVE NOTICES U/S 133(6) OF THE 1961 ACT ALSO REPORTED TO THE AO THAT THESE PARTIES DO NOT EXIST AT THE GIVEN ADDRESSES. THE ASSESSEE WAS ASKED BY THE AO TO PRODUCE THE SE FIVE PARTIES BUT ASSESSEE FAIL S TO DO SO. THE ASSESSEE BEING MANUFACTURER WAS REQUIRED TO PRODUCE, INTER - ALIA, CONSUMPTION RECORDS BEFORE THE AUTHORITIES BELOW BUT THE ASSESSEE FAILED TO PRODUCE STOCK RECORD, CONSUMPTION DETAILS , EXCISE RECORDS ETC. BEFORE THE AUTHORITIES BELOW IN ORDER TO SUBSTANTIATE THAT THESE PURCHASES ARE GENUINE . THE ASSESSEE HAD ALSO FAILED TO FURNISH PROPER DELIVERY CHALLANS AND EVIDENCE OF TRANSPORTATION OF MATERIAL . THE ENQUIRIES MADE BY THE AO WITH THE I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 10 BANKERS OF THESE FIVE PARTIES ALSO REVEALED THAT THESE PA RTIES HAD IMMEDIATELY WITHDRAWN CASH OR TRANSFERRED FUNDS AFTER DEPOSIT OF CHEQUES ISSUED BY THE ASSESSEE TOWARDS THE ALLEGED PURCHASES. SOME OF THE PARTIES HAVE ALSO DEPOSED BEFORE MAHARASHTRA SALES TAX DEPARTMENT THAT THEY WERE ONLY ISSUING BOGUS BILLS W ITHOUT SUPPLYING ANY MATERIAL PHYSICALLY. THE ASSESSEE DID NOT APPEAR BEFORE LD. CIT(A) DURING COURSE OF FIRST APPELLATE PROCEEDINGS CONDUCTED BY LEARNED CIT(A). THE REASON S ADVANCED BY LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE BENCH IS THE LAPSES BY TH E ERSTWHILE COUNSEL WHO DID NOT MADE EFFECTIVE REPRESENTATIONS BEFORE THE AUTHORITIES BELOW. THE ASSESSEE HAS NOW FILED SOME SAMPLE INVOICES AND CHART TO CO - RELATE PURCHASES WITH SALES TO MAKE VIEW ITS POINT THAT PURCHASES ARE SUPPORTE D/CORRELATED WITH SALES . THESE DETAILS NOW FILED B Y THE ASSESSEE BEFORE THE BENCH REQUIRES VERIFICATION BY AUTHORITIES BELOW AS THIS IS FILED FOR THE FIRST TIME BEFORE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE IN HIS STATEMENT MADE BEFORE THE B ENCH HAS ALSO STATED THA T IF ONE MORE OPPORTUNITY IS PROVIDED TO THE ASSESSEE BY SETTING ASIDE/REMANDING THE MATTER, THE ASSESSEE WILL PRODUCE ALL NECESSARY EVIDENCES AND RECORDS TO PROVE GENUINENESS OF THESE PURCHASES AND THEN AUTHORITIES BELOW CAN ADJUDICATE THE ISSUES IN THESE APP EALS ON MERITS IN ACCORDANCE WITH LAW. THESE PURCHASES ARE APPEARING IN THE BOOKS OF ACCOUNTS AND ASSESSEE IS CLAIMING DEDUCTION OF THESE PURCHASES WHILE COMPUTING INCOME OF THE ASSESSEE AND THUS, ONUS IS ON THE ASSESSEE TO PROVE GENUINENESS OF THE SE PURCH ASES . THESE MATERIAL FACTS AS TO GENUINENESS OF THESE PURCHASES ARE ESPECIALLY WITH IN THE KNOWLEDGE OF THE ASSESSEE AND IT IS FOR THE ASSESSEE TO BRING CREDIBLE EVIDENCES AND MATERIAL TO SUBSTANTIATE THAT THESE PURCHASES ARE GENUINE. IT IS ALSO AVERRED BY LEARNED COUNSEL FOR THE ASSESSEE THAT DOCUMENTS RELATING TO THESE PURCHASES WERE SEIZED EARLIER BY SALES TAX AUTHORITIES WHICH ALSO PREVENTED ASSESSEE TO PRODUCE THESE DOCUMENTS BEFORE LOWER AUTHORITIES IN FIRST ROUND OF LITIGATION . THE LEARNED COUNSEL HAS MADE PRAYER S TO SET ASIDE AND RESTORE THE MATTER TO LOWER AUTHORITIES TO ENABLE ASSESSEE TO SUBMIT ALL RELEVANT AND CREDIBLE EVIDENCES TO SUBSTANTIATE ITS CONTENTIONS . IT IS A MAT TER OF RECORD THAT I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 11 100% OF THE ALLEGED BOGUS PURCHASES STOOD DISALLOWED BY BOTH THE AUTHORITIES BELOW IN THE ABSENCE OF STOCK CONSUMPTION RECORDS/ DETAILS , PROOF OF DELIVERY/TRANSPORTATION AS WELL RECEIPT OF INCRIMINATING MATERIAL FROM MAHARASHTRA VAT DEPARTMENT THAT THE ASSESSEE HAS MADE BOGUS PURCHASES FROM THESE PARTIES , BUT NOW THE ASSESSEE HAS MADE CATEGORICAL STATEMENTS BEFORE THE BENCH THROUGH ITS COUNSEL THAT IF ONE MORE OPPORTUNITY BE GRANTED THE ASSESSEE WILL LEAD ALL EVIDENCES INCLUDING CONSUMPTION RECORDS, PROOF OF DELIVERY, TRANSPORTATION ETC TO SUBSTANTIATE THAT TH ESE PURCHASES ARE GENUINE AND THEN AUTHORITIES BELOW CAN DECIDE THE ISSUES ON MERITS IN ACCORDANCE WITH LAW . KEEPING IN VIEW ENTIRE FACTUAL MATRIX OF THE CASE AS WELL STATEMENT S MADE BY LD. COUNSEL FOR THE ASSESSEE BEFORE THE B ENCH AND IN THE INTEREST OF JUSTICE , WE ARE INCLINED TO SET ASIDE AND RESTORE THE ISSUES IN THESE APPEALS TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION OF THE ISSUES AFTER CONSIDERING EVIDENCES /CONTENTIONS FILED BY THE ASSESSEE DURING DENOVO APPELLATE PROCEEDINGS. THE ASSESSEE I S DIRECTED TO FILE NECESSARY EVIDENCES/EXPLANATION S BEFORE THE LD. CIT(A) IN ITS DEFE NCE WHICH SHALL BE ADMITTED BY LD. CIT(A) IN THE INTEREST OF JUSTICE AND THEREAFTER ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW. THESE PURCHASES ARE APPEARING IN THE BO OKS OF ACCOUNTS OF THE ASSESSEE AND THE ASSESSEE IS CLAIMING DEDUCTION OF THESE PURCHASES WHILE COMPUTING ITS INCOME , HENCE ONUS IS ON THE ASSESSEE TO PROVE THAT THESE PURCHASES ARE GENUINE . N EEDLESS TO SAY THAT PROPER AN D ADEQUATE OPPORTUNITY OF BEING H EARD SHALL BE PROVIDED BY LD. CIT(A) TO THE ASSESSEE IN DE - NOVO PROCEEDINGS BEFORE LEARNED CIT(A) . NEEDLESS TO SAY THAT POWERS OF L D. CIT(A) ARE CO - TERMINUS WITH THE POWERS OF THE AO INCLUDING POWER OF ENHANCEMENT. THE ASSESSEE HAD NOT APPEARED BEFORE LEA RNED CIT(A) IN FIRST ROUND OF LITIGATION . IN C ASE THE ASSESSEE DID NOT AGAIN APPEAR BEFORE LEARNED CIT(A) IN SECOND ROUND OF LITIGATION OR DID NOT FILE CREDIBLE AND RELEVANT EVIDENCES TO SUBSTANTIATE ITS CONTENTIONS , THE LEARNED CIT(A) SHALL BE FREE TO D ECIDE THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. WE CLARIFY THAT WE HAVE NOT COMMENTED ON MERITS OF THE ISSUES IN THIS APPEAL AND A LL THE ISSUES ARE KEPT OPEN . THIS APPEAL FILED BY THE I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 12 ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER INDICATED ABOVE. WE ORDER ACCORDINGLY. 7 . THIS APPEAL FILED BY THE ASSESSEE IN ITA NO. 478/MUM/2018 FOR AY 2008 - 09 IS ALLOWED FOR STATISTICAL PURPOSES. 8. OUR DECISION IN THIS APPEAL IN ITA NO. 478/MUM/2018 FOR AY 2008 - 09 SHALL APPLY MUTATIS MUTANDIS TO THE APPEAL IN ITA NO. 480 & 481/MUM/2018 FOR AYS: 2010 - 11 AND 2011 - 12 RESPECTIVELY AS THE FACTS ARE SIMILAR IN THESE TWO APPEALS ALSO . WE ORDER ACCORDINGLY. 9. IN THE RESULT, ALL THE THREE APPEALS IN ITA NO. 478/MUM/2018 AND 480 - 481/MUM/2018 FOR AY 20 08 - 09, 2010 - 11 AND 2011 - 12 RESPECTIVELY ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 .07.2019. 31 .07.2019 SD/ - SD/ - (C.N PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31 .07.2019 NISHANT VERMA SR. PRIVATE SECRETARY COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// I.T.A. NO.478/MUM/2018 I.T.A. NO.480 TO 481/MUM/2018 PAGE | 13 BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI