DEPUTY COMMISSIONER OF INCOME TAX - 8(2)(1), MUMBAI V. SL FORMAT ARCHITECTS PRIVATE LIMITED , MUMBAI

ITA 5131/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3635 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G ', MUMBAI BEFORE SHRI C.N. PRASAD, HONBLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HONBLE ACCOUNTANT MEMBER ITA. NO . 5131 /MUM / 201 7 (A.Y : 20 09 - 10) DCIT 8(2)(1) AAYAKAR BHAWAN, ROOM NO . 624, M.K. ROAD, MUMBAI 400 020 V. M/S. SL FORMAT ARCHITECTS INDIA PVT LTD ., 342, KALIDAS UDYOG BHAVAN, NEAR CENTURY BAZAR, WORLI, MUMBAI 400 025 PAN: AAGCS 8412 H ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : CHAUDHARY ARUN KUMAR SINGH DATE OF HEARING : 10 .12.2018 DATE OF PRONOUNCEMENT : 20 . 02.2019 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) - 14, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] FOR THE ASSESSMENT YEAR 2009 - 0 IN SUSTAINING THE ADDITION OF PUR CHASES TO THE EXTENT OF 12.5%. 2. THIS CASE WHEN LAST POSTED FOR HEARING ON 04.12.2018 , THROUGH LETTER DATED 29.11.2018 LD. COUNSEL FOR THE ASSESSEE SOUGHT TIME AND THE CASE WAS ADJOURNED TO 10.1 2.2018 , WHEN THE MATTER WAS TAKEN FOR 2 ITA. NO. 5131/MUM/2017 (A.Y: 2009 - 10) M/S. SL FORMAT ARCHITECTS INDIA PVT LTD., HEARING ON 10.12.2018 NONE APPEARED . THEREFORE, WE PROCEED TO DISPOSE OF F THI S APPEAL ON HEARING THE LD. DR. 3. LD. DR SUBMITS THAT ASSESSING OFFICER BASED ON THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT NOTICE D THAT ASSESSEE MADE PURCHASES FROM SOME OF THE DEALERS WHO APPEARED TO BE ONLY ENTRY PROVIDERS AND T HEREFORE REQUIRED THE ASSESSEE TO PROVE TH E GENUINENESS OF THE PURCHASES MADE FROM THOSE PARTIES W HICH WERE MENTIONED IN THE ASSESSMENT ORDER. THE ASSESSEE NEITHER PRODUCED THE PARTIES NOR FURNISHED ANY INFORMATION TO PROVE THE GENUINENESS OF THE PURCHASES. THUS, ASSESSING OFFICER TREATED THE ENTIR E PURCHASES AS BOGUS PURCHASES. 4. ON APPEAL THE LD. CIT(A) CONSIDERING THE FACT THAT THE ASSESSING OF FICER FOR THE A.Y. 20 1 0 - 11 ESTIMATED THE PROFIT ELEMENT FROM THE PURCHASES TREATED AS NON - GENUINE @ 12.5% FROM THE THREE PARTIES AS THE ASSESSEE MIGHT HAVE MADE PURCHASES FROM THE GRAY MARKET AND OBTAINED BOGUS BILLS , T HIS YEAR ALSO HE ESTIMATED THE PROFIT ELEMEN T FROM SUCH PURCHASES @ 12.5%. 5. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. 6. WE HAVE HEARD THE LD. DR , PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) ESTIMATED THE PROFIT ELE MENT OF THESE PURCHASES 3 ITA. NO. 5131/MUM/2017 (A.Y: 2009 - 10) M/S. SL FORMAT ARCHITECTS INDIA PVT LTD., @12.5% OBSERVING T HAT THE ASSESSING OFFICER HIMSELF HAD ESTIMATED THE PROFIT ELEMENT IN THE A .Y. 2010 - 11 FROM THE PURCHASES FROM THREE PARTIES OBSERVING AS UNDER: 3. GROUND NO . 4 IS PREMATURE IN NATURE AND NO COMMENTS ARE MADE. AS REGARDS GROUND NUMBER 1 TO 3, THE FACTS OF THE CA S E IS THAT THE A.O. RECEIVED INFORMATION FROM THE INVESTIGATION WIND THAT THE APPELLANT HAS SHOWN BOGUS PURCHASES FROM THREE DIFFERENT PARTIES AMOUNTING TO THE R S 1,00,15,722/ - . DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O. ASKED THE APP ELLANT TO PRODUCE THESE PARTIES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE SE PARTIES BEFORE THE A.O. THE A.O ADDED THE ENTIRE PURCHASES AGAINST W HICH THE APPELLANT IS IN APPEAL . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AP PELLANT SUBMITTED THAT TALL PAYMENTS ARE MADE BAY ACCOUNT PAYEE CHEQUE AND THAT THE BANK STATEMENT WAS ALSO SUBMITTED BEFORE THE A.O. IT IS FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2010 - 11 ALSO, PURCHASES WORTH RS . 4,878,882/ - WAS MADE FROM SIMILAR THREE PARTIES AND AN ADDITIO N TO THE EXTENT OF 12.5% OF THE PURCHASES WERE MADE BY THE A.O. ASSESSMENT ORDER FOR ASSESSMENT YEAR 2010 - 11 WAS ENCLOSED. AS PER THE ASSESSMENT ORDER FOR 2010 - 11, PURCHASES WORTH RS. 4,878,882/ - WAS MADE FROM THE SAME THREE PARTIES. THE A.O ADDED 12.5% OF SUCH PURCHASES HOLDING THAT PURCHASES ARE MADE FROM THE GREY MARKET AND BOGUS BILLS OF OTHER PARTIES ARE OBTAINED. THE APPELLANT IN ITS SUBMISSIO N, CONTENDS THAT IN THIS YEAR A LSO ADDITION TO THE EXTENT OF 12.5% BE SUSTAINED. 3.2. I HAVE CONSIDERED THE SUBMISSIONS MADE. THE A.O HAS NOT DOUBTED THE SALE MADE BY THE ASSESSEE. THERE CAN NOT BE SALES WITHOUT PURCHASE. THE A.O HAS MERELY MADE THE ADDITION FOR NON PRODUCTION OF THE SELLERS. O N SIMILAR FACTS, ADDITION TO THE EXTENT O F 12.5% IS MADE IN A.Y. 2010 - 11 . IN THE CASE OF CIT VS. SIMIT SHETH [38 TAXMAN.COM 385(GUJ) IN SIMILAR CIRCUMSTANCES , THE ADDITION TO THE EXTENT OF 12.5% WAS SUSTAINED RELYING ON THE DECISION IN THE CASE OF VIJAY MUMBAI MIS T RY CONSTRUCTION LTD 355 ITR NO. 498 (GUJ) AND VIJA Y PROTEINS LTD 58 ITD 428 (AHD). THEREFORE, LOOKING INTO THE FACTS OF THE CASE AND ALSO THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2010 - 11, I AM OF THE OPINION THAT ADDITION TO THE EXTENT OF 12.5% OF SUCH PURCHASES BE ADDED. THE A.O IS TO TAKE ACTION ACCORD INGLY. 7. ON A CAREFUL CONSIDERATION OF THE ORDER OF THE LD.CIT(A) , WE DO NOT FIND ANY VALID REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THUS WE SUSTA IN THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, A PPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONO UNCED IN THE OPEN COURT ON 20 TH FEBRUARY, 2019 SD/ - SD/ - ( MAN OJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20/ 02/2019 GIRIDHAR, SR.PS 4 ITA. NO. 5131/MUM/2017 (A.Y: 2009 - 10) M/S. SL FORMAT ARCHITECTS INDIA PVT LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM