ITO WARD 15 (3)(1), Mumbai V. M/S TITAN ANTONY AVIATION INDIA PVT LTD., Mumbai

ITA 4929/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3724 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 25-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 143(1); 201; 207

Judgement Text

1 ITA NO.4929/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) I.T.A. NO. 4929 /MUM/201 9 (ASSESSMENT YEAR : 201 1 - 1 2 ) ITO, WARD 15(3)(1), MUMBAI VS M/S TITAN ANTONY AVIATION INDIA PVT LTD, PLOT NO.E - 71, MIDC, ADDITIONAL PATALGANGA INDUSTRIAL AREA, PATALGANGA, NAVI MUMBI - 410 207 PAN : AA CCT2243H (APPELLANT) (RESPONDENT) APPELLANT BY S MT. SMITA VERMA (DR) RESPONDENT BY NONE DATE OF HEARING 0 3 - 0 2 - 2021 DATE OF PRONOUNCEMENT 2 5 /0 2 /2021 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DATED 3 0 - 0 4 - 201 9 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 24 , MUMBAI FOR THE ASSESSMENT YEAR 201 1 - 1 2 . 2. THE GRIEVANCE OF THE REVENUE IS AGAINST PARTIAL RELIEF GRANTED BY LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE ON ACCOUNT OF NON GENUINE PURCHASES. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, A RESIDENT COMPANY , IS ENGAGED IN THE BUSINESS OF FABRICATION OF AIR REFUELLERS, OIL TANKERS, BOWSERS , ETC. FOR THE 2 ITA NO.4929/MUM/2019 ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 29 - 09 - 2011 DECLARING TOTAL INCOME OF RS.13,30,660. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIALLY PROCESSED U NDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE A SSESSING O FFICER RECEIVED INFORMATION FROM THE S ALES - TAX DEPARTMENT THROUGH THE INVESTIGATION WING THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRY PROVIDED BY WAY OF BOGUS PURCHASE BILLS WORTH RS.4,87,675/ - . IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES OF RS.4,87,675/ - FROM M/S REXONN IMPEX. IN RESPONSE TO THE QUERY RAISED, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES TO PROVE THE PURCHASES. HOWEVER, THE A SSESSING O FFICER WAS NOT CONVINCED. TH US, THE ASSESSING O FFICER ULTIMATELY TREATED THE PURCHASES OF RS.4,87,675/ - AS NON GENUINE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. ASSESSEE CONTESTED THE AFORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER (APPEALS) REDUCED THE ADDITION TO THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURCHASES BY ESTIMATING AT 12.5%. 4. WHEN THE APPEAL WAS CALLED FOR HEARING , NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE I PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 5. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A READING OF PARAGRAPH 5.4 OF THE ASSESSMENT ORDER, IT APPEARS THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SUBMITTED PURCHASE INVOICES, DELIVERY CHALLAN , GOODS RECE IVED NOTE, TRANSPORTERS COPY, PURCHASE ORDERS, ETC. FURTHER, THE ASSESSEE HAD FURNISHED COPIES OF REGISTER 3 ITA NO.4929/MUM/2019 SHOWING ENTRY OF MATERIAL FROM M/S REXONN IMPEX. DETAILS OF PAYMENT MADE THROUGH CHEQUE WERE ALSO FURNISHED. THE A SSESSING O FFICER HAS NOT MADE ANY ADVERSE OBSERVATION WITH REGARD TO THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE. THE A SSESSING O FFICER HAS ALSO NOT DISPUTED THE SALES EFFECTED BY THE ASSESSEE. THUS, ALL THESE FACTS AND EVIDENCES INDICATE THAT THE GOODS / MATERIALS IN DISPUTE HAVE ENT ERED THE STOCK OF THE ASSESSEE , THOUGH , THE SOURCE OF SUCH PURCHASE S COULD NOT BE PROVED CONCLUSIVELY . THAT BEING THE CASE, THE ENTIRE PURCHASES COULD NOT HAVE BEEN DISALLOWED; BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE CONSIDERED FOR AD DITION TO TAKE CARE OF THE LEAKAGE OF REVENUE , IF ANY, ON ACCOUNT OF SUPPRESSION OF TRUE PROFIT. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFIRMITY IN THE DECISION OF LEARNED COMMISSIONER (A PPEALS ) IN RESTRICTING THE D ISALLOWANCE TO 12.5% OF THE NON GE NUINE PURCHASES. I MAY FURTHER ADD , THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS N.K. PROTEINS LTD BY JUDGEMENT DATED 16 - 01 - 2017 , RELIED UPON BY LEARNED DEPARTMENTAL REPRESENTATIVE, BEING FACTUALLY DISTINGUISHABLE, IS NOT APPLICABLE TO THE C ASE AT HAND. GROUNDS ARE DISMISSED. 6 . IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 5 /0 2 /2021. S D / - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI, DATED : 2 5 / 0 2 /2021. PAVANAN, SR.P.S (ON CONTRACT) 4 ITA NO.4929/MUM/2019 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONENT. 3. THE CIT(A) 4. 4. THE CIT 5. D.R., ITAT, MUMBAI. 6. GUARD FILE. //TRUE COPY// BY ORDER I.T.A.T., MUMBAI. 5 ITA NO.4929/MUM/2019