ITO 17 (1)(5), MUMBAI V. HEMANSHU HARILAL MEHTA, MUMBAI

ITA 5044/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0621 (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: 2011-2012
• Appeal Filed On: 31-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H ANSARILD
• Assessee Lawyers: M K PATEL; K S CHOKSHILD ARS
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 143(2); 148

Judgement Text

1 ITA NO.5044/MUM/2018 A.Y.2011-12 HEMANSHU HARILAL MEHTA - 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. 5044/MUM/2018 ( / ASSESSMENT YEAR:2011-12 ) INCOME TAX OFFICER - 17(1)(5) ROOM NO.117, 1 ST FLOOR AAYKAR BHAVAN M.K. ROAD, MUMBAI-400 020. / VS. HEMANSHU HARILAL MEHTA 23, HEMDEEP ENTERPRISES SARANG STREET MUMBAI-400 003. !'#$ ./ ./PAN/GIR NO. AAEMP-5345-E ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) REVENUE BY : SHRI AKHTAR H. ANSARI-LD.DR ASSESSEE BY : SHRI M.K. PATEL & SHRI K.S. CHOKSHI-LD. ARS / DATE OF HEARING : 16/09/2019 / DATE OF PRONOUNCEMENT : 16/09/2019 / O R D E R PER BENCH: - 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-56, 2 ITA NO.5044/MUM/2018 A.Y.2011-12 HEMANSHU HARILAL MEHTA MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-56/ITO- 17(1)(5)/2017-18/678 DATED 27/06/2018 ON FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE AT 8% AS AGAINST 12.5% AD OPTED BY THE A.O. IN RESPECT OF BOGUS PURCHASES. 2.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF HARDW ARE ITEMS WAS ASSESSED U/S 143(3) R.W.S 147 OF INCOME TAX ACT, 1961 ON 28/ 09/2016 WHEREIN THE ASSESSEE WAS SADDLED WITH ESTIMATED ADDITIONS OF RS .1.44 LACS ON ACCOUNT OF SUPPRESSION OF PROFIT IN LIEU OF INFLATED PURCHA SES. PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), IT T RANSPIRED THE ASSESSEE MADE PURCHASES OF RS.11.55 LACS FROM A SUSPICIOUS E NTITY NAMELY M/S PARIKH MULTI TRADE. ACCORDINGLY, AS PER DUE PROCESS OF LAW, THE CASE WAS REOPENED VIDE ISSUANCE OF NOTICE U/S 148 ON 29/03/2 016 FOLLOWED BY STATUTORY NOTICES U/S 143(2) & 142(1), WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASES. 2.2 ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES, H OWEVER, NOTICES ISSUED U/S 133(6) TO THE SAID ENTITY REMAINED UN-SE RVED / UN-RESPONDED TO AND THE ASSESSEE ALSO FAILED TO PRODUCE THE SAID SU PPLIER. RESULTANTLY, THE ASSESSEE WAS SADDLED WITH ESTIMATED ADDITIONS OF 12 .5% AGAINST THESE PURCHASES. THE LEARNED FIRST APPELLATE AUTHORITY RE DUCED THE ESTIMATE TO 8%, AGAINST WHICH THE REVENUE IS UNDER APPEAL BEFORE US . IT APPEARS THAT THE ASSESSEE HAS NOT PREFERRED ANY FURTHER APPEAL. WE H AVE HEARD AND CONSIDERED THE RIVAL SUBMISSIONS. 3 ITA NO.5044/MUM/2018 A.Y.2011-12 HEMANSHU HARILAL MEHTA 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. IT TRANSPIRES THAT THE ASSESSEE WAS IN POSSESSION OF P RIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO SUPPLIERS WERE THROUG H BANKING CHANNELS. THE SALES TURNOVER REFLECTED BY THE ASSESSEE HAS NO T BEEN DISTURBED / DISPUTED BY LD. AO. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO PROVE THE DELIVERY OF MATERIAL. NOTICES I SSUED U/S 133(6) REMAINED UN-RESPONDED TO. UNDER SUCH CIRCUMSTANCES, THE ADDI TIONS WHICH COULD BE SUSTAINED, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDD ED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSE SSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE B ENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. FIRST APPELLATE AUT HORITY HAS RIGHTLY DONE. THEREFORE, CONCURRING WITH THE APPROACH OF LEARNED FIRST APPELLATE AUTHORITY IN RESTRICTING THE ADDITIONS TO 8%, WE DISMISS THE APPEAL. 4. IN RESULT, THE APPEAL STANDS 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 4 ITA NO.5044/MUM/2018 A.Y.2011-12 HEMANSHU HARILAL MEHTA () *) / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. -. $'/ , / , / DR, ITAT, MUMBAI 6. .012 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.