ITO 32(2)(3), MUMBAI V. MAYUR R. KAMDAR, MUMBAI

ITA 5089/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0017 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARJU GARODIA LD SR
• Assessee Lawyers: ANIL THAKRAR LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO.5089/MUM/2015 & ITA NO.5741/MUM/2015 MAYUR KAMDAR ASSESSMENT YEAR- 2009-2010 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5089/MUM/2015 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 32(2)(3 ) ROOM NO. 305, 3 RD FLOOR C-11, PRATYAKSHAR KAR BHAWAN BKC, BANDRA, MUMBAI-400 051 / VS. MAYUR R. KAMDAR 705, SHASHI APARTMENT DEVIDAS LANE, BORIVALI (W) MUMBAI 400 092 ./ ./PAN/GIR NO. AFUPK-8611-C ( /APPELLANT ) : ( / RESPONDENT ) & ./I.T.A. NO.5741/MUM/2015 ( / ASSESSMENT YEAR: 2009-10) MAYUR R. KAMDAR 705, SHASHI APARTMENT DEVIDAS LANE, BORIVALI (W) MUMBAI 400 092 / VS. INCOME TAX OFFICER 32(2)(3 ) ROOM NO. 305, 3 RD FLOOR C-11,PRATYAKSH KAR BHAWAN BKC, BANDRA MUMBAI-400051 ./ ./PAN/GIR NO. AFUPK-8611-C ( /APPELLANT ) : ( / RESPONDENT ) A SSESSEE BY : ANIL THAKRAR, LD. AR RE VENUE BY : AARJU GARODIA, LD. SR. AR / DATE OF HEARING : 26/02/2018 / DATE OF PRONOUNCEMENT : 28 /02/2018 ITA NO.5089/MUM/2015 & ITA NO.5741/MUM/2015 MAYUR KAMDAR ASSESSMENT YEAR- 2009-2010 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THESE ARE CROSS APPEAL FOR ASSESSMENT YEAR [AY] 2009-10 WHICH CONTEST STAND OF LD. COMMISSIONER OF INCOME-TAX (AP PEALS)-44 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-44/ITA-135/32(2)(3)/2014-15 DATED 01/09/2015 QUA ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER- 32(2)(3) [AO] U/S 143(3) READ WITH SECTION 147 OF T HE INCOME TAX ACT, 1961 ON 16/03/2015 WHEREIN THE ASSESSEE HAS BEEN SADDLE D WITH ADDITION OF RS.90,43,090/- ON ACCOUNT OF CERTAIN ALLEGED BOGUS PURCHASES. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING OF BUILDING MATERIAL UNDER PROPRIETARY CONCERN NAMELY N.M.TRADERS WAS SUBJECTED TO REASSESSMENT PROCEEDINGS FOR IMPUGNED AY VIDE ISSUANCE OF NOTICE U/S 148 DATED 16/01/2014 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1). THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE AT RS.4,58,690/- WHICH WAS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA & DGIT (INVESTIGATION) REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SU CH BOGUS PURCHASE BILLS TO THE TUNE OF RS.4,52,28,619/- FROM TEN SUCH PARTI ES. THE ASSESSEE DEFENDED THE PURCHASES MADE BY HIM BUT NOTICES ISSU ED U/S 133(6) TO CONFIRM THE TRANSACTIONS REMAINED UN-SERVED WITH REMARKS LIKE LEFT / NOT ITA NO.5089/MUM/2015 & ITA NO.5741/MUM/2015 MAYUR KAMDAR ASSESSMENT YEAR- 2009-2010 3 KNOWN . AFTER CONSIDERING ASSESSEES SUBMISSIONS, DOCUMEN TARY EVIDENCES AND CERTAIN JUDICIAL PRONOUNCEMENTS, LD. AO ADOPTED GROSS PROFIT RATE OF RS.22.61% AS AGAINST 6.07% REFLECTED BY THE ASS ESSEE AGAINST TURNOVER OF RS.546.63 LACS AND ADDED THE DI FFERENTIAL PROFIT OF RS.90,43,090/- TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 01/09/2 015 WHERE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO 3% OF ALLEGED BOGUS PURCHASES WHICH CAME TO RS.13,56,900/- AND DELETED THE BALANC E. AGGRIEVED, THE ASSESSEE AS WELL AS REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] SUBMITT ED THAT THE ADDITION WAS ON LOWER SIDE WHEREAS LD. AUTHORISED R EPRESENTATIVE FOR ASSESSEE [AR] PLEADED FOR SOME MORE RELIEF ON THE P REMISE THAT THE ASSESSEE HAD RECONCILED THE SALE AND PURCHASE TRANS ACTIONS. 5. AFTER CONSIDERING RIVAL CONTENTIONS, WE FIND NO REASON TO INTERFERE WITH THE STAND OF LD. CIT(A) SINCE THE ASSESSEE WAS ENGAGED IN TRADING ACTIVITIES AND COULD NOT ACHIEVE THE SALES TURNOVER WITHOUT PURCHASE OF MATERIAL. THE TURNOVER OF THE ASSESSEE HAS NOT BEEN DOUBTED BY THE REVENUE AND THE ASSESSEE IS IN POSSESSION OF PRIMAR Y PURCHASE DOCUMENTS & FURTHER, THE PAYMENTS ARE THROUGH BANKI NG CHANNELS. THE ASSESSEE IS ABLE TO RECONCILE THE SALE AND PURCHASE TRANSACTIONS. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY SINGL E PARTY TO CONFIRM THE TRANSACTIONS AND NOTICES ISSUED U/S 133(6) WERE RETURNED BACK UN- SERVED WHICH CAST A SERIOUS DOUBT ON ASSESSEES CLAIM. THE REFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE , WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTI ONS TO FACTORIZE FOR ITA NO.5089/MUM/2015 & ITA NO.5741/MUM/2015 MAYUR KAMDAR ASSESSMENT YEAR- 2009-2010 4 PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST ALLEGED BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTLY DONE. THEREF ORE, FINDING THE SAME QUITE FAIR AND REASONABLE, WE DISMISS BOTH THE APPEALS. 6. RESULTANTLY, BOTH THE APPEALS STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR A GGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 28. 02.2018 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' ( ) / THE CIT(A) 4. ' / CIT CONCERNED 5. % , % , / DR, ITAT, MUMBAI 6. &' / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI