JAYA JEWELLERY P.LTD, MUMBAI V. ASST CIT CC 4(3), MUMBAI

ITA 5120/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4515 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 11-01-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 26-10-2015
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Assessee Lawyers: M D PRAJAPATI
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 148

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NOS.5120 AND 5121/MUM/2015 ASSESSMENT YEAR: 2011-12 & 2010-11 M/S JAYA JEWELLERY PVT. LTD. PLOT NO.74/A, GOVERNMENT INDUSTRIAL ESTATE, CHARKOP, KANDIVALI (WEST), MUMBAI-400067 / VS. DCIT, CC-4(3), MUMBAI / ASSESSEE / REVENUE P.A. NO. AAACJ5545N $ % & / ASSESSEE BY SHRI M.D. PRAJAPATI $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 11/01/2016 & / DATE OF ORDER: 11/01/2016 & / O R D E R BOTH THESE APPEALS ARE BY THE ASSESSEE FOR ASSESSM ENT YEAR 2010-11 AND 2011-12 AGAINST THE RESPECTIVE IMP UGNED ORDER BOTH DATED 11/08/2015 OF THE LD. FIRST APPELL ATE AUTHORITY, MUMBAI, THE COMMON GROUND RAISED BY THE ITA NO.5120 & 5121/MUM/2015 M/S JAYA JEWELLERY PVT. LTD. 2 ASSESSEE PERTAINS TO CONFIRMING ADDITION OF RS.1,36 ,116/-, BEING 30% OF TOTAL PURCHASES OF RS.4,53,721/- FROM M/S AMBIKA TRADE IMPEX (RS.1,32,925/-), FROM M/S SAMIR TRADING CORPORATIN (RS.76,760/-) AND M/S VAISHALI ENTERPRISES (RS.2,44,036/-) AS BOGUS PURCHASES WITH OUT CONSIDERING THE TRUE FACTS (FOR A.Y. 2010-11) AND RS.3,64,055/- (FOR A.Y. 2011-12). 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, SHRI M.D. PRAJAPATI, ADVANCED ARGUMEN TS, WHICH IS IDENTICAL TO THE GROUND RAISED, BY FURTHER SUBMITTING THAT THE PROFIT WAS ESTIMATED AT 30% BY THE LD. COM MISSIONER OF INCOME TAX (APPEALS) WHICH CAN BE REDUCED TO 12% . ON THE OTHER HAND, THE LD. DR, SHRI V.S. JADHAV, STRON GLY DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDERS BY CONTENDING THAT THERE ARE BOGUS PURCHASES BY THE AS SESSEE, WHICH WERE ADDED BY THE ASSESSING OFFICER AND THE L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS ALREADY GR ANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY REDUCING THE PROFIT AT 30%, THEREFORE, NO FURTHER RELIEF MAY BE GRANTED TO THE ASSESSEE. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN TRADING OF IMITATION JEWELLERY/FASHION JEWELLERY ON RETAIL AND WHOLESALE BASIS. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ASSESSING THE TOTAL INCOME AT RS.5,58,054/-. SUBSE QUENTLY, ITA NO.5120 & 5121/MUM/2015 M/S JAYA JEWELLERY PVT. LTD. 3 THE ASSESSING OFFICER GOT INFORMATION FROM THE SALE S TAX DEPARTMENT/HAWALA PARTIES, THAT INCOME HAS ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE, THEREFORE, NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. FURTHER, NOTICES U/S 133(6) OF THE ACT WERE ISSUED TO THE FIRMS/PART IES FROM WHERE, THE ASSESSEE CLAIMED TO HAVE MADE PURCHASES. THE NOTICES WERE RETURNED UNSERVED WITH THE REMARKS LE FT, UNKNOWN AND ON SOME NOTICES COULD NOT BE SERVED. ON ASKING BY THE ASSESSING OFFICER, THE ASSESSEE ALSO DID NOT PRODUCE THE PARTIES BY CLAIMING THAT FOR THE LAST N EARLY FOUR YEARS, THERE IS NO TRANSACTION WITH THESE PARTIES, ULTIMATELY, THE ASSESSING OFFICER MADE THE ADDITIONS AS BOGUS PURCHASES. ON APPEAL, BEFORE THE LD. CIT(A), THE A SSESSEE FURNISHED THE DETAILS AND IT WAS GATHERED THAT THE MAHARASHTRA SALES TAX AUTHORITIES (VAT AUTHORITIES) EXAMINED THE FACTS AND FOUND THAT M/S R.S. INDUSTRI ES WAS NOT TRACEABLE. IT WAS FURTHER FOUND THAT ONLY TAX INVOICES BILLS WERE ISSUED AND FINALLY, IT WAS FOUND THAT TH E ASSESSEE USED TO MADE BOGUS PURCHASES. HOWEVER, CONSIDERING THE TOTALITY OF FACTS AND VARIOUS CASE LAWS, AS MENTION ED AT PAGE 7 ONWARDS OF THE IMPUGNED ORDER, THE PROFIT TO THE EXTENT OF 30% WAS UPHELD. THE ASSESSEE IS IN FURTHER APPEAL B EFORE THIS TRIBUNAL. BEFORE THIS TRIBUNAL, THE LD. COUNSEL FO R THE ASSESSEE, CLAIMED THAT THE PROFIT MAY BE REDUCED TO THE EXTENT OF 12.5% AND PLACED RELIANCE UPON THE DECISI ON OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS PVT. LTD. VS CIT (58 ITD 428). ALTERNATIVELY, IT WAS SUBMITTED THAT A REASO NABLE ITA NO.5120 & 5121/MUM/2015 M/S JAYA JEWELLERY PVT. LTD. 4 ESTIMATED MAY BE MADE. IF THE OBSERVATION MADE IN T HE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE T OTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MAT ERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, THE RE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE USED TO MAKE BOGUS PURCHASES, THEREFORE, WITHOUT GOING INTO MUCH DELIB ERATION AND CONSIDERING THE FACTUAL MATRIX AVAILABLE ON REC ORD, IT WILL MEET THE ENDS OF JUSTICE, IF THE ADDITION IS RESTRI CTED TO 20% IN PLACE OF 30%, OF THE BOGUS PURCHASES, SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, BOTH TH E APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. FINALLY, BOTH THE APPEALS OF THE ASSESSEE ARE PARTL Y ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 11/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 11/01/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. ITA NO.5120 & 5121/MUM/2015 M/S JAYA JEWELLERY PVT. LTD. 5 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI