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

ITA 479/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5762 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Keywords: Bogus purchase; Corroborative evidences
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 479/MUM/2018 ASSESSMENT YEAR : 2009-10 ADVANCE COMPSEALS PVT. LTD., 406, GOLDEN CHAMBERS, NEW LINK ROAD, ANDHERI (EAST) MUMBAI [PAN : AAECA7292F] VS. ITO-9(1)(1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 28-01-2019 DATE OF PRONOUNCEMENT : 30-01-2019 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX(APPEALS)-16, MUMBAI, DATED 15-09-2017 FOR THE AY . 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ITA NO. 479/MUM/2018 : 2 : EACH AND EVERY GROUND OF APPEAL IS IN TH E ALTERNATIVE AND WITHOUT PREJUDICE TO THE OTHER 1. DURING THE YEAR THE ASSESSMENT WAS COMPLETED U/S 143(2). THE LD A.O ERRED IN LAW AND ON FACTS IN REOPENING T HE COMPLETED ASSESSMENT WITHOUT ANY LAPSE ON THE PART OF THE ASS ESSEE OR ANY VALID REASON HENCE THE ORDER U/S 147 BEING ULTRA VI RUS AND BAD IN LAW MAY BE QUASHED. 2. THE LD. AO HAS ERRED IN LAW AND ON FACTS, IN REO PENING OF THE CASE U/S 147. HE MERELY RELIED ON THE INFORMATION R ECEIVED FROM THE MAHARASHTRA VAT DEPARTMENT AND CIT (A) HAVE FAILED TO APPRECIATE THE CONTENTION OF THE ASSESSEE 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 UL TRA-VIRUS. THE LD. AO AND / CIT (A) FAILED TO APPRECIATE THAT 'SUS PICIOUS DEALERS 'LIST BY MVAT DEPT. DO NOT MEAN THAT PURCHASES ARE BOGUS. 3. THE LD CIT (A) HAVE ERRED IN LAW AND ON FACTS IN HOLDING THE IMPUGNED ADDITIONS IN THE ASSESSMENT YEAR 2009-10. THE ADDITIONS ARE CONFIRMED WITHOUT UNDERSTANDING THE NATURE OF T HE BUSINESS OF THE ASSESSEE. ASSESSEE BEING TRADER THERE CANNOT BE ANY SALE WITHOUT CORRESPONDING PURCHASE AND HENCE IT IS NOT POSSIBLE THAT THE PURCHASE CAN BE BOGUS. 4. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE MAT ERIAL PURCHASED DURING THE YEAR ARE DULY ACCOUNTED IN THE BOOK OF T HE APPELLANT AND THE SAME ARE SUPPORTED BY PROPER DOCUMENTARY EVIDEN CES. 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. 5. THE LD. CIT(A), FURTHER, FAILED TO THE APPRECIAT E THAT THE LD. A.O. HAS NEITHER REJECTED THE BOOKS OF ACCO UNTS OF THE APPELLANT NOR POINTED ANY DISCREPANCIES IN TH E 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. 6. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS DI SREGARDING THE ENTIRE SETS OF EVIDENCES CONTAINING VARIOUS DOCUMEN TS SUBMITTED BEFORE HIM BEFORE THE DISPOSAL OF THE APPEAL. ITA NO. 479/MUM/2018 : 3 : 7. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER, AMEND OR DROP ANY OR ALL GROUNDS OF APPEAL AT THE TIME OF TH E APPEAL PROCEEDINGS. 3. THIS APPEAL WAS FIXED FOR HEARING ON 28-01-2019. NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD ON THE ADDR ESS PROVIDED BY THE ASSESSEE IN THE APPEAL MEMO. THE SAI D NOTICE HAS COME BACK UN-SERVED WITH THE REMARK LEFT. THE AS SESSEE HAS NOT PROVIDED ANY NEW ADDRESS AND HENCE, UNDER THE SE FACTS, SERVICE OF NOTICE ON THE ASSESSEE IS NOT POSSIBL E AND THEREFORE, I DECIDE THE APPEAL OF THE ASSESSEE EX-PARTE QUA THE ASSESSEE. 4. LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF THE L D. CIT(A). 5. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR FOR TH E REVENUE AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. I FIND THAT THE ISSUE IN DISPUTE IN THIS APPEAL IS REGA RDING ADDITION MADE BY THE AO OF RS. 12,87,483/-, WHICH WAS DISALLOWED BY THE AO BY TREATING THE PURCHASES AS BOGU S PURCHASES. THIS ISSUE WAS DECIDED BY THE LD. CIT(A) AT PARA NO. 6.2.1 OF HIS ORDER, WHICH IS REPRODUCED HEREIN BELOW FOR THE SAKE OF READY REFERENCE: ITA NO. 479/MUM/2018 : 4 : 6.2.1 VIDE THIS GROUND APPELLANT HAS AGITATED AGAI NST DISALLOWANCE OF RS.12,87,483/- AS BOGUS PURCHASES. IN PARA 5 OF THE ASSESSMENT ORDER, THE LD. A.O. HAD MENTIONED THAT THE APPELLAN T HAD MADE PURCHASES IN THE NAME OF FOLLOWING PARTIES. KRSNA ENTERPRISES RS.5,54,540/- JAIN CORPORATION RS.7,32,943/- THE INFORMATION WAS RECEIVED FROM THE SALES TAX DEP ARTMENT THROUGH DGIT(INV), MUMBAI WHICH INDICATE THAT THE ABOVE MEN TIONED PARTIES DID NOT MAKE ANY GENUINE SALE BUT ONLY ISSUED BILLS WITHOUT SUPPLYING ANY MATERIAL. DURING THE COURSE OF REASSE SSMENT PROCEEDINGS THE APPELLANT COMPANY WAS ASKED BY THE A.O. TO FILE FOLLOWING COPIES OF LEDGER ACCOUNTS, PURCHASE BILLS , DELIVERY CHALLANS, LORRY RECEIPTS, DETAILS OF TRANSPORTATION PAYMENT, DETAILS OF PAYMENT MADE WITH CHEQUE NO., BANK AND BRANCH AGAINST PURCH ASES MADE, ETC. IN RESPONSE TO THE DETAILS FAILED BY THE A.O. THE APPELLANT ONLY FILED THE LEDGER EXTRACT AND COPY OF TAX INVOICES. AS MENTIONED IN PARA 5.5 THE LD. A.O. MADE FURTHER INVOICES BY WA Y OF ISSUING NOTICES U/S.133(6) OF THE I.T. ACT. THE INVOICES IS SUED WERE RETURNED BACK BY POSTAL AUTHORITIES WITH THE REMARKS LEFT / NOT KNOWN'. THE PART INFORMATION FURNISHED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAVE ALSO MANY IRREGULARITIE S WHICH ARE, MENTIONED BY THE A.O. IN PARA 5.5 OF THE ASSESSMENT ORDER. THE APPELLANT HAD FAILED TO PROVIDE DETAILS REGARDING A CTUAL RECEIPT OF MATERIAL PURCHASED, ITS SUBSEQUENT CONSUMPTION IN T HE BUSINESS OF THE APPELLANT, STOCK REGISTER IN SUPPORT OF ITS CLA IM, PROOF OF ACTUAL TRANSPORTATION AND DELIVERY OF MATERIAL PURCHASED. SINCE APPELLANT HAD FAILED TO PROVE THE ACTUAL RECEIPT AND SUBSEQUE NT CONSUMPTION OF MATERIAL PURCHASED, THEREFORE, IT IS A CLEAR CUT CA SE OF INFLATION OF PURCHASES AND REDUCTION OF ITS PROFIT. IN ABSENCE O F ANY SUPPORTING EVIDENCES APPEAL OF THE APPELLANT CANNOT BE ALLOWED . HENCE ADDITION OF RS.12,87,483/- MADE BY THE A.O. IS CONFIRMED. TH IS GROUND OF APPEAL IS DISMISSED. 5.1. FROM THE ABOVE PARAGRAPH, WHICH IS REPRODUCED F ROM THE ORDER OF LD. CIT(A), IT IS SEEN THAT A CATEGORICAL FIN DING HAS BEEN GIVEN BY THE LD. CIT(A) THAT ASSESSEE HAS FAILED TO PROVIDE DETAILS REGARDING ACTUAL RECEIPT OF MATERIAL PURCHASED AND ITS SUBSEQUENT CONSUMPTION IN THE BUSINESS OF AS SESSEE, ITA NO. 479/MUM/2018 : 5 : STOCK REGISTER IN SUPPORT OF ITS CLAIM, PROOF OF ACTUAL TRANSPORTATION AND DELIVERY OF MATERIAL PURCHASED. I N VIEW OF THESE FACTS, I FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). GROUNDS RAISED BY ASSESSEE ARE REJECTED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 30 TH JANUARY, 2019 TNMM ITA NO. 479/MUM/2018 : 6 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI