MR. MANISH S. RAJANI, KALYAN V. ITO 2 (2), KALYAN

ITA 4992/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8707 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH RAJHANSLD
• Assessee Lawyers: NEHA PARANJPE LD
• Keywords: Bogus purchase
• Section: 133(6); 148; 144

Judgement Text

1 ITA NO.4992/MUM/2018 A.Y. 2009-10 MR. MANISH S.RAJANI - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4992/MUM/2018 ( / ASSESSMENT YEAR:2009-10 ) MR. MANISH S. RAJANI BLOCK NO. A-145, ROOM NO.289. KURLA CAMP ROAD ULHASNAGAR-421 004. / VS. INCOME TAX OFFICER - WARD 2 (2) 2ND FLOOR, MOHAN MANSION WAYALE NAGAR, KHADAKPADA KALYAN (WEST)-421 301. '# ./ ./PAN/GIR NO. ACXPR-7906-B ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) REVENUE BY : SHRI ASHUTOSH RAJHANS-LD.DR ASSESSEE BY : SHRI NEHA PARANJPE-LD. AR / DATE OF HEARING : 11/09/2019 / DATE OF PRONOUNCEMENT : 11/09/2019 / O R D E R PER BENCH: - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-3, THANE, 2 ITA NO.4992/MUM/2018 A.Y. 2009-10 MR. MANISH S.RAJANI [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO.ITA NO.332-THN/14-15 DATED 20/06/2018 ON FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-III , THANE [HERE IN AFTER REFERRED TO AS ' LD CIT (A)' ] ERRED IN PASSING THE ORDER DATE 20-06-2018 DISALLOW ANCE @ 25% OF RS. 1102816/- WORKS OUT @ RS. 2,75,704/- ARE RETAINED & RELIEF IS PARTLY GIVEN @ RS.827112/- IN PLACE OF FULL RS.1102816/-. THE APPELLANT PRAYS THAT ADDITIONS OF RS. 1102816/- MAD E U//S 69 OF I.T. ACT BY LT.O. WARD 2(2) AT KALYAN ON A/C OF SO CALLED HAWALA PURCHASES BE DELETED. 2. PENALTY U/S 271(L)(C) WAS LEVIED @ RS. 330992/-. PENALTY ORDER WAS PASSED BEFORE SERVICE OF NOTICE & ASSESSMENT ORDER. LD. C.I.T. (A) - III ERRED BY N OT PASSING ANY ORDER ON THE PENALTY SO LEVIED ILLEG ALLY. 3. AN APPEAL FEE PAYABLE @ RS. 10000/- IS PAID CHAL LAN IS SUBMITTED HEREWITH. 4. ADDITIONS MADE BY I.T.O. @ RS.1102816/- & LD. C. I.T. (A) -III AT THANE RETAINED ADDITION @ 25% @ RS. 275704/-ARE UNJUSTIFIED, MAY KINDLY BE DELETED. 5. PENALTY U/S 271(L)(C) RS. 330992/- MAY KINDLY BE DELETED. 2.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY U/S. 144 R. W.S. 147 ON 24/10/2013 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED A T RS.15.07 LACS AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.11.02 LACS AS AGAINST RETURNED INCOME OF RS.4.05 LACS FILED BY THE ASSESS EE ON 17/09/2013 WHICH WAS PROCESSED U/S.143(1). 2.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM INVESTIGATION WING / SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRAN SPIRED THAT THE ASSESSEE STOOD BENEFICIARY OF ALLEGED BOGUS PURCHASES TO THE TUNE OF RS.11.02 LACS FROM 3 PARTIES, THE DETAILS OF WHICH HAS ALREADY BE EN EXTRACTED AT PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, AS PER D UE PROCESS OF LAW, RE- ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE A SSESSEE U/S 147 BY ISSUANCE OF NOTICE U/S 148 ON 15/04/2013 WHICH REMA INED UN-RESPONDED TO WHICH LED THE LD. AO TO FRAME THE ASSESSMENT ON BES T JUDGMENT BASIS. RELYING UPON THE INVESTIGATIONS BEING CARRIED OUT B Y SALES TAX DEPARTMENT, THE STATED PURCHASES WERE DISALLOWED AND ADDED TO T HE INCOME OF THE 3 ITA NO.4992/MUM/2018 A.Y. 2009-10 MR. MANISH S.RAJANI ASSESSEE. THE LEARNED FIRST APPELLATE AUTHORITY, AF TER CONSIDERING REMAND REPORT AND ASSESSEES SUBMISSIONS, RESTRICTED THE A DDITIONS TO 25%. STILL AGGRIEVED, THE ASSESSEE IS UNDER APPEAL BEFORE US. IT APPEARS THAT THE REVENUE IS NOT IN FURTHER APPEAL BEFORE US. 3. THE RESPECTIVE REPRESENTATIVES HAVE ADVANCED ARG UMENTS, WHICH WE HAVE DULY CONSIDERED. 4. WE ARE OF THE CONSIDERED OPINION THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASS ESSEES NATURE OF BUSINESS. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO SUPPLIERS WERE THROUGH BANKING CHANNELS. THE SALES TURNOVER HAS NOT BEEN DISPUTED / DISTURBED BY THE R EVENUE. HOWEVER, AT THE SAME TIME, NOTICE ISSUED U/S 133(6) TO ALL THE ENTI TIES REMAINED UNSERVED AND THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE T HE PURCHASES. UNDER SUCH CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SU STAINED, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHA SE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POS SIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VA T AGAINST SUCH BOGUS PURCHASES, WHICH LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DONE. HOWEVER, FINDING THE ESTIMATE TO BE ON THE HIGHER SIDE, WE R EDUCE THE SAME TO 12.5%. THE SAME COMES TO RS.1,37,852/-. THE IMPUGNED ORDER STAND MODIFIED TO THAT EXTENT. THE GROUND RELATING TO PENALTY, BEING PRE-MATURE, WOULD NOT REQUIRE ANY ADJUDICATION AT THIS STAGE AND THEREFOR E, DISMISSED. 5. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED. 4 ITA NO.4992/MUM/2018 A.Y. 2009-10 MR. MANISH S.RAJANI ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2019. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 11/09/2019 SR.PS:-JAISY VARGHESE #$ %$ / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. . ( ) / THE CIT(A) 4. . / CIT CONCERNED 5. /0 &)1 , 1 , / DR, ITAT, MUMBAI 6. 0234 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.