ITO -WD- 3(4), THANE V. YOGESH CHATERLAL JAIN, THANE

ITA 5060/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0618 (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: 2009-2010
• Appeal Filed On: 31-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H ANSARILD
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 143(2); 148

Judgement Text

1 ITA 5060/MUM/2018 A.Y.2009-10 YOGESH CHATERLAL JAIN - 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.5060/MUM/2018 ( / ASSESSMENT YEAR:2009-10 ) INCOME TAX OFFICER - 3 (4) ASHAR IT PARK, 6 TH FLOOR B-WING, ROOM NO.9 ROAD NO.16-Z WAGLE INDL. ESTATE THANE (W)-400 604. / VS. SHRI YOGES H CHATERLAL JAIN SHOP NO.6, SANJOG APARTMENT STATION ROAD, KALWA THANE (W)-400 605. '# ./ ./PAN/GIR NO. AEKPJ-4548-J ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) REVENUE BY : SHRI AKHTAR H. ANSARI-LD.DR ASSESSEE BY : NONE / 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] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, THANE, 2 ITA 5060/MUM/2018 A.Y.2009-10 YOGESH CHATERLAL JAIN [IN SHORT REFERRED TO AS CIT(A)], ITA NO. 211/2014-15 DATED 28/06/2018 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A) WS JUSTIFIED IN NOT APPRECIATING THE LAW CORRECTLY THA T ONCE THE PURCHASES ARE UNVERIFIABLE/NOT GENUINE/ BOGUS, THE SAME SHOULD HA VE BEEN DISALLOWED IN ENTIRETY? 2. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. NONE HAS APPEARED FOR ASSESSEE AND THEREFORE, THE M ATTER IS PROCEEDED WITH EX-PARTE QUA THE ASSESSEE. 2.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED AS TRADER OF HARDWA RE AND ELECTRICAL GOODS UNDER PROPRIETORSHIP CONCERN NAMELY M/S JAIN ELECTR IC & HARDWARE, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 07/03/2014 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.16. 35 LACS AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.12.21 LA CS AS AGAINST RETURNED INCOME OF RS.4.14 LACS FILED BY THE ASSESSEE ON 11/ 09/2009 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.12.21 LACS FROM 8 ENTITIES, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED AT PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, AS P ER DUE PROCESS OF LAW, RE-ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST TH E ASSESSEE U/S 147 BY ISSUANCE OF NOTICE U/S 148 ON 22/03/2013 FOLLOWED B Y STATUTORY NOTICES U/S 3 ITA 5060/MUM/2018 A.Y.2009-10 YOGESH CHATERLAL JAIN 143(2) & 142(1), WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASES TRANSACTIONS. 2.3 ALTHOUGH, THE ASSESSEE DEFENDED THE PURCHASES, HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THE ENTITIES REMAINED UN-R ESPONDED TO AND THE ASSESSEE ALSO FAILED TO PRODUCE ANY OF THE SUPPLIER S TO CONFIRM THE TRANSACTIONS. THE ASSESSEE ALSO FAILED TO PROVE THE DELIVERY OF MATERIAL WHICH LED THE LEARNED AO TO TREAT THE PURCHASES AS NON-GENUINE AND ACCORDINGLY, THE SAME WAS DISALLOWED & ADDED TO THE INCOME OF THE ASSESSEE. THE LEARNED FIRST APPELLATE AUTHORITY, INTER-ALIA, AFTER CONSIDERING TREND OF GROSS PROFIT / NET PROFIT RATES REFLECTED BY ASSESSEE IN VARIOUS YEARS & RELYING UPON THE DECISION OF HONBLE APEX C OURT RENDERED IN H M ESUFALI H M ABDULLA 90 ITR 271 ESTIMATED THE ADDITIONS AT 25% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTH ER APPEAL BEFORE US. IT APPEARS THAT THE ASSESSEE IS NOT IN FURTHER APPEAL. 3. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY LD. DR. 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. IT TRANSPIRES THAT THE ASSESSEE WAS IN PO SSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO SUPPLIERS WE RE THROUGH BANKING CHANNELS. THE SALES TURNOVER REFLECTED BY THE ASSES SEE HAS NOT BEEN DISTURBED / DISPUTED BY LD. AO. HOWEVER, AT THE SAM E TIME, THE ASSESSEE MISERABLY FAILED TO PROVE THE DELIVERY OF MATERIAL. NOTICES ISSUED U/S 133(6) REMAINED UN-RESPONDED TO. UNDER SUCH CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SUSTAINED, WAS TO ACCOUNT FOR PROFIT ELEME NT EMBEDDED IN THESE 4 ITA 5060/MUM/2018 A.Y.2009-10 YOGESH CHATERLAL JAIN 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 AGAINST SUCH BOGUS PURCHASES, WHICH LD. FIRST APPEL LATE AUTHORITY HAS RIGHTLY DONE. THEREFORE, CONCURRING WITH THE APPROACH OF LE ARNED FIRST APPELLATE AUTHORITY IN RESTRICTING THE ADDITIONS TO 25%, WE D ISMISS THE APPEAL. 5. 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 #$ %$ / 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.