SHREERAM ENGINEERS, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX - 31(3), MUMBAI

ITA 4917/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4823 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 14-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CH ARUN KUMAR SINGH LD
• Assessee Lawyers: DEEPAK P TIKEKAR LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 147; 148; 143(3); 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JMAND HONBLE SHRIMANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4917/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) M/S. SHREERAM ENGINEERS 112-113, SHIVSAGAR INDUSTRIAL ESTATE BABASAHEB KOTKAR ROAD GOREGAON (EAST) MUMBAI 400 063 / VS. ASSISTANT COMMISSIONER OF INCOME TAX-31(3) C-13/409 PRATYAKSHKAR BHAWAN BKC, BANDRA (EAST) MUMBAI 400 051 ./ ./PAN/GIR NO. AAYFS-3974-K ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : DEEPAK P.TIKEKAR, LD. AR REVENUE BY : CH. ARUN KUMAR SINGH- LD.DR !' / DATE OF HEARING : 05/02/2019 #$ !' / DATE OF PRONOUNCEMENT : 14/02/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) 42, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-42/I.T-243/15-16 DATED 2 03/04/2017 QUA CONFIRMATION OF CERTAIN ADDITION OF RS.44,81,462/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2. BRIEF FACTS ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF ENGINEERING GOODS WAS SUBJECTED TO REASSESSMENT PROCEEDINGS FOR IMPUGNED AY U/S 143(3) READ WITH SECTION 147 ON 30/03/2015 BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-31(3), MUMBAI [AO]. THE REASSESSMENT PROCEEDINGS GOT TRIGGERED PURSUANT TO RECEIPT OF CERTAIN INFORMATIO N THAT THE ASSESSEE STOOD BENEFICIARY OF ACCOMMODATION BILLS TO THE TUN E OF RS.44.81 LACS FROM FIVE PARTIES, THE DETAILS OF WHICH HAVE BEEN E XTRACTED IN THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, NOTICE U/S 1 48 DATED 01/03/2014 WAS ISSUED TO THE ASSESSEE WHICH WAS FOL LOWED BY STATUTORY NOTICES U/S 143(2) & 142(1). NOTICES SENT U/S 133(6) TO ALL THE SUPPLIERS UNDER QUESTION ELICITED NO SATISFACTORY R ESPONSE. HOWEVER, THE ASSESSEE IN SUPPORT OF TRANSACTIONS, FILED COPI ES OF PURCHASE BILLS, DELIVERY CHALLANS, STATEMEN OF SALES & PURCHASES, E VIDENCES REGARDING PAYMENT THROUGH BANKING CHANNELS AND CONTENDED THAT THE PURCHASES WERE GENUINE. HOWEVER, THE FAILURE TO SUBMIT TRANSP ORTATION DETAILS AS WELL AS STOCK REGISTER COUPLED WITH THE OUTCOME OF NOTICES U/S 133(6) LED THE LD. AO TO TREAT THESE PURCHASES AS BOGUS PURCHASES AND ACCORDINGLY, THE SAME WERE ADDED TO THE INCOME OF T HE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE AGITATED THE SAME BEFORE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATED 03/04/2017 WHER EIN LD. CIT(A), AFTER CONSIDERING THE FACTUAL MATRIX, ASSESSEES SU BMISSIONS AND RELYING UPON SEVERAL JUDICIAL PRONOUNCEMENTS, CONFI RMED THE STAND OF LD. AO. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 3 4. THE LD. AUTHORIZED REPRESENTATIVE [AR] FOR ASSES SEE, DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER-BOOK SUBMITTED THAT THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PURCHASED GOODS WERE CONSUMED BY THE ASSESSEE. OUR ATTENTION IS ALSO DRAWN TO THE FACT THAT GROSS PROFIT RATE IN THE IMPUGNED AY WAS COMMENSURATE WITH EARLIER AY AND THEREFORE, FULL AD DITIONS WERE NOT JUSTIFIED. THE ASSESSMENT ORDERS FOR AYS 2010-11 & 2011-12 HAS BEEN PLACED ON RECORD TO SUBMIT THAT ADDITIONS UNDER SIM ILAR CIRCUMSTANCES IN THOSE YEARS, HAVE BEEN ESTIMATED BY LD. AO @12.5 %. THE ATTENTION HAS BEEN DRAWN TO THE FACT THAT FEW SUPPLIERS WERE COMMON IN AYS 2010-11, 2011-12 AS WELL AS IN THE IMPUGNED AY. PER CONTRA, LD. DR JUSTIFIED THE STAND OF LD. FIRST APPELLATE AUTHORIT Y. 5. UPON CAREFUL CONSIDERATION, WE STRENGTH IN THE A RGUMENTS ADDUCED BY LD. AR SINCE THE ASSESSEE WAS IN POSSESS ION OF PRIMARY PURCHASE DOCUMENTS AND THE BOOKS OF ACCOUNTS WERE S UBJECTED TO AUDIT. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHA SE / CONSUMPTION OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF B USINESS.FURTHER, THE PAYMENTS WERE THROUGH BANKING CHANNELS. THE GROSS PROFIT RATE WAS COMPARABLE IN THE IMPUGNED AY. KEEPING IN VIEW THE TOTALITY OF ALL THESE FACTORS, WE RESTRICT THE IMPUGNED ADDITIONS T O 12.5% WHICH IS IN LINE WITH THE ESTIMATION MADE BY REVENUE IN ASSESSE ES OWN CASE FOR AYS 2010-11 & 2011-12. THE ADDITION WORKS OUT TO RS .5,60,183/-, BEING 12.5% OF ALLEGED BOGUS PURCHASES OF RS.44,81,462/-. THE BALANCE ADDITION STANDS DELETED. 6. THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. 4 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2019. SD/- SD/- (PAWAN SINGH) (MANOJ KUMA R AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER % MUMBAI; DATED :14.02.2019 SR.PS:-THIRUMALESH % %% % / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 3. $$% ( ) / THE CIT(A) 4. $$% / CIT CONCERNED 5. & ''() , $) , / DR, ITAT, MUMBAI 6. ' +,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.