DCIT - 9(1)(1), MUMBAI V. ACE ENERGY INFRASTRUCTURE PVT. LTD., MUMBAI

ITA 5181/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8468 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: AARTHI SATHE LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 142(1); 133(6); 147; 148

Judgement Text

ITA.NO.5181/MUM/2016 ACE ENERGY INFRASTRUCTURE PRIVATE LIMITED ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5181/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX 9(1)(1) ROOM NO.260-A,2 ND FLOOR AAYKAR BHAVAN,M.K.ROAD MUMBAI-400 020 / VS. ACE ENERGY INFRASTRUCTURE PRIVATE LIMITED 4, STANBURG ESTATE, JUHU KOLIWADA,SANTACRUZ(W) MUMBAI-400 049 ! ./ ./PAN/GIR NO. AAGCA-2093-N ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : AARTHI SATHE ,LD.AR RE VENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 31/10/2017 / DATE OF PRONOUNCEMENT : 08/11 /2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2009- 10 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)- 16 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-16/IT-292/DCIT9(1)(1)/2015-16 DATED 29/05/2016 QUA RELIEF PROVIDED TO ASSESSEE AGAINST CERTAIN BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY ITA.NO.5181/MUM/2016 ACE ENERGY INFRASTRUCTURE PRIVATE LIMITED ASSESSMENT YEAR-2009-10 2 COMMISSIONER OF INCOME TAX 9(1)(1), MUMBAI [AO] U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 ON 25/03/2015. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS CIVIL CONTRACTOR WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 25/03/2015 AT RS.3,16,77,250/- AFTER ADDITION OF CE RTAIN BOGUS PURCHASES FOR RS.88,79,106/-. THE ORIGINAL RETURN WAS E-FILED ON 30/09/2009 AT RS. 2,27,98,140/- WHICH WAS PROCESSED U/S 143(1). THE S OLITARY ISSUE INVOLVED IN THE APPEAL IS ADDITION AGAINST BOGUS PURCHASES . 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.88,79,106/- FROM AN ENTITY NAMELY V.M.UDYOG. CONSEQUENTLY, NOTICE U/S 148 DATED 28/03/2014 WAS ISSUED TO THE ASSESSEE WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) AND 142(1) . 2.3 DURING ASSESSMENT PROCEEDINGS, NOTICE U/S 133(6 ) WAS SENT TO THE SAID SUPPLIER TO CONFIRM THE PURCHASE TRANSACTIONS. HOWEVER, THE SAME WAS RETURNED BACK UN-SERVED BY POSTAL AUTHORITIES WITH REMARKS LEFT. UPON CONFRONTATION, THE ASSESSEE CONTENDED THAT THE PURCHASES WERE MADE THROUGH AGENT AND PAYMENT WAS THROUGH BANKING CHANNEL AND THE MATERIAL WAS CONSUMED IN ASSESSEES BUSINESS. HOWEV ER, NOT CONVINCED, LD. AO CONCLUDED THAT THE ASSESSEE FAILE D TO DISCHARGE THE ONUS CASTED ON HIM TO PROVE THE PURCHASES TRANSACTI ONS. FINALLY, TREATING THE SAME AS NON-GENUINE PURCHASES, THE SAME WERE AD DED TO THE INCOME OF THE ASSESSEE. ITA.NO.5181/MUM/2016 ACE ENERGY INFRASTRUCTURE PRIVATE LIMITED ASSESSMENT YEAR-2009-10 3 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 29/05/2 016 WHERE LD. CIT(A) AFTER APPRECIATING THE FACTUAL MATRIX AND PL ACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS RESTRICTED THE ADDI TIONS TO 12.5% OF ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] RELIED ON THE STAND OF LD. AO WHEREAS LD. COUNSEL FOR ASSESSEE [AR] ASSERT ED THAT ESTIMATION MADE BY LD. CIT(A) WAS QUITE FAIR AND REASONABLE. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINIO N THAT THERE COULD BE NO SALE WITHOUT PURCHASE /CONSUMPTION OF MATERIAL S INCE THE ASSESSEE WAS ENGAGED IN CIVIL CONSTRUCTION. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND T HE PAYMENTS WERE THROUGH BANKING CHANNELS. THE PURCHASES WERE BACKED BY INVOICES. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY C ONFIRMATION FROM THE IMPUGNED SUPPLIER AND NOTICE SENT U/S 133(6) RE MAINED UN-SERVED , WHICH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THERE FORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS T O ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHAS E OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHTLY DONE. THERE FORE, FINDING THE SAME TO BE QUITE FAIR & REASONABLE, WE DISMISS REVE NUES APPEAL. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH NOVEMBER, 2017. ITA.NO.5181/MUM/2016 ACE ENERGY INFRASTRUCTURE PRIVATE LIMITED ASSESSMENT YEAR-2009-10 4 SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARW AL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08.11.2017 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