ITO WD- 3 (4), KALYAN V. VIPUL C. DOSHI, DOMBIVALI

ITA 5041/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0616 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H ANSARILD
• Assessee Lawyers: VISHWAS MEHENDALELD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 133(6); 143(2); 148

Judgement Text

1 ITA NO.5041-42/MUM/2018 SHRI VIPUL C.DOSHI ASSESSMENT YEARS 2010-11 & 2011-12 - 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.5041/MUM/2018 ( / ASSESSMENT YEAR:2010-11 ) & ./ I.T.A. NO.5042/MUM/2018 ( / ASSESSMENT YEAR:2011-12 ) INCOME TAX OFFICER WARD-3(4), KALYAN, 2 ND FLOOR, RANI MANSION MURBAD ROAD, KALYAN (W)-421 301. / VS. SHRI VIPUL C. DOSHI [PROP. OF M/S. VIP INDUSTRIES] 2-B, NEW VIKAS BUILDERS, K.D. AGARWAL HALL DOMBIVALI (E) MUMBAI-421 201. #$ ./ ./PAN/GIR NO. AAQPD-2795-P ( $& /APPELLANT ) : ( '($& / RESPONDENT ) REVENUE BY : SHRI AKHTAR H. ANSARI-LD.DR ASSESSEE BY : SHRI VISHWAS MEHENDALE-LD. AR / DATE OF HEARING : 16/09/2019 / DATE OF PRONOUNCEMENT : 16/09/2019 / O R D E R PER BENCH: - 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEAR S [AY] 2010-11 & 2011-12 CONTEST COMMON ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, MUMBAI, [IN SHORT REFERRED TO AS CIT( A)], ITA NOS.956, 957 & 2 ITA NO.5041-42/MUM/2018 SHRI VIPUL C.DOSHI ASSESSMENT YEARS 2010-11 & 2011-12 958/14-15 DATED 20/06/2018. THE GROUNDS RAISED IN AY 2010-11 READS AS UNDER: - WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE LAW CORRECTLY THAT ONCE THE PURCHASES ARE UNVERIFIABLE/NOT GENUINE/ BOGUS, THE SAME SHOULD HA VE BEEN DISALLOWED IN ENTIRETY? WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY BOTH THE REPRESENTATIVES. 2.1 FACTS FOR AY 2010-11, IN BRIEF, ARE THAT THE AS SESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF ELECT RICAL GOODS & HARDWARE ITEMS UNDER PROPRIETORSHIP CONCERN NAMELY M/S V.I.P . INDUSTRIES, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 13/02/2015 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.15. 73 LACS, INTER-ALIA, AFTER ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.12.45 LACS AS AGAINST RETURNED INCOME OF RS.2.98 LACS E-FILED BY THE ASSE SSEE ON 12/08/2010 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.12.45 LACS FROM 10 ENTITIES, THE DETAILS OF WHICH HAVE ALREADY BEEN TABULATED AT PARA-3 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, AS PE R DUE PROCESS OF LAW, RE-ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST TH E ASSESSEE U/S 147 BY ISSUANCE OF NOTICE U/S 148 ON 09/05/2013. THE STATU TORY NOTICES U/S 143(2) & 142(1) WERE ISSUED IN DUE COURSE WHEREIN THE ASSE SSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 3 ITA NO.5041-42/MUM/2018 SHRI VIPUL C.DOSHI ASSESSMENT YEARS 2010-11 & 2011-12 2.3 ALTHOUGH, THE ASSESSEE DEFENDED THE PURCHASES, HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THE SUPPLIERS REMAINED UNS ERVED AS WELL AS UN- RESPONDED TO. THE ASSESSEE FAILED TO SUBSTANTIATE D ELIVERY OF MATERIAL AND ALSO FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONF IRM THE STATED TRANSACTIONS WHICH LED THE LD. AO TO BELIEVE THAT THE ASSESSEE R EMAINED UNSUCCESSFUL IN DISCHARGING THE ONUS CASTED UPON HIM, IN THIS REGAR D. CONSEQUENTLY, THE BOOKS WERE REJECTED U/S 145(3) AND THE SAID PURCHAS ES WERE ADDED TO THE INCOME OF THE ASSESSEE. THE LEARNED APPELLATE AUTHO RITY, APPLYING THE PROVISIONS OF SECTION 44AF, ESTIMATED ASSESSEES IN COME @5% OF THE TURNOVER. THE STAND OF FIRST APPELLATE AUTHORITY RE DUCED THE ASSESSED INCOME FROM RS.15.73 LACS TO RS.6.69 LACS. AGGRIEVE D, THE REVENUE IS IN FURTHER APPEAL BEFORE US. IT APPEARS THAT THE ASSES SEE HAS NOT PREFERRED ANY FURTHER APPEAL. 3. WE ARE OF THE CONSIDERED OPINION THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS I.E. TRADING. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIER WAS THROUGH BANKIN G CHANNELS. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE PURCHASES DURING ASSESSMENT PROCEEDINGS. NOTICES IS SUED U/S 133(6) REMAINED UN-RESPONDED TO IN ALL THE CASES. THE ASSE SSEE FAILED TO PROVE THE DELIVERY OF MATERIAL. UNDER SUCH CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SUSTAINED, WAS TO ACCOUNT FOR PROFIT ELEME NT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNE D BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AN D UNDUE BENEFIT OF VAT 4 ITA NO.5041-42/MUM/2018 SHRI VIPUL C.DOSHI ASSESSMENT YEARS 2010-11 & 2011-12 AGAINST SUCH BOGUS PURCHASES. THE LEARNED FIRST APP ELLATE AUTHORITY, KEEPING IN VIEW THE ENTIRETY OF FACTUAL MATRIX, EST IMATED THE INCOME ON PRESUMPTIVE BASIS I.E. 5% OF THE TURNOVER. THE SAID ESTIMATION, IN OUR CONSIDERED OPINION, IS QUITE FAIR AND REASONABLE UN DER THE CIRCUMSTANCES KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. WHEN THE INCOME HAS BEEN ESTIMATED ON PRESUMPTIVE BASIS, NO FURTHER ADD ITION WOULD BE WARRANTED ON ACCOUNT OF ALLEGED BOGUS PURCHASES. T HEREFORE, CONCURRING WITH THE APPROACH OF LEARNED FIRST APPELLATE AUTHOR ITY, WE DISMISS THE APPEAL. 4. FACTS ARE PARI-MATERIA THE SAME IN AY 2011-12 WH EREIN THE ASSESSEE WAS SADDLED WITH ADDITIONS OF RS.10.80 LACS ON ACCO UNT OF ALLEGED BOGUS PURCHASES IN AN ASSESSMENT FRAMED U/S 143(3) R.W.S. 147 ON 13 /02/2015. THE FIRST APPELLATE AUTHORITY ESTIMATED THE INCOME ON PRESUMPTIVE BASIS. THE IMPUGNED ORDER IS COMMON ORDER FOR BOTH THE YEA RS. HENCE, OUR OBSERVATION, CONCLUSION AS WELL AS ADJUDICATION AS FOR AY 2010-11 SHALL MUTATIS MUTANDIS APPLY TO THIS YEAR ALSO. RESULTANTLY, THE APPEAL ST ANDS DISMISSED. 5. BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2019. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16/09/2019 SR.PS:-JAISY VARGHESE 5 ITA NO.5041-42/MUM/2018 SHRI VIPUL C.DOSHI ASSESSMENT YEARS 2010-11 & 2011-12 #$ %$ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT 3. / ( ) / THE CIT(A) 4. / / CIT CONCERNED 5. 01 '*2 , 2 , / DR, ITAT, MUMBAI 6. 134 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.