VIJAY J PITHADIA, MUMBAI V. ACIT RANGE 17(3), MUMBAI

ITA 5202/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1448 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 143(3); 142(1); 13; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM ITA NOS. 5201, 5202 & 5203/MUM/2018 ( ASSESSMENT YEAR: 2009-10, 2010-11 & 2011-12) VIJAY J. PITHADIA, 144, V.T. MENSION, PERIN NARIMAN STREET, FORT, MUMBAI-400001. VS. A.C.I.T. RANGE-17(3), MUMBAI. PAN/GIR NO.AABPP 6266 A (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY MS. AARTI SATHE (AR) REVENUE BY SHRI R. BHOOPATHI (DR) DATE OF HEARING 13/12/2019 DATE OF PRONOUNCEMENT 13/12/2019 / O R D E R PER: BENCH THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE COMPOSITE ORDER OF THE LD. CIT(A)-28, MUMBAI DATED 22/06/2018 FOR THE A.YS. 2009-10, 2010-11 AND 2011-12 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT, THE ACT). 2. ALL THESE THREE APPEALS HAVE COMMON ISSUES, THER EFORE, THEY ARE CLUBBED TOGETHER FOR HEARING AND FOR THE SAKE OF CO NVENIENCE AND BREVITY, A COMMON ORDER IS BEING PASSED. ITA NO. 5201 TO 5203/MUM/2018 VIJAY J. PITHADIA VS ACIT 2 3. COMMON GRIEVANCE OF THE ASSESSEE IN ALL THESE TH REE APPEALS RELATE TO REOPENING OF ASSESSMENT AND ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES BY ESTIMATING PROFIT ON SUCH BOGUS PURCHASES. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN JOBWORK O F FALSE CEILING, DUCTING, INSULATION ETC. THE A.O. GOT INFORMATION F ROM THE SALES TAX AUTHORITY ABOUT SOME OF THE DEALERS UNDER MVAT ACT, 2002 INDULGING IN THE PRACTICE OF PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF ISSUING BOGUS SALES BILLS. AFTER RECORDING DUE REASONS, THE A.O. REOPENED THE ASSESSMENT BY ISSUANCE OF NOTICE U/S 148 OF THE ACT . AS PER THE REASONS RECORDED, WE FOUND THAT THE A.O. WAS JUSTIF IED IN REOPENING THE ASSESSMENT SINCE THERE WAS SUFFICIENT REASON TO BEL IEVE THAT THE INCOME TO THE EXTENT OF BOGUS PURCHASES HAS ESCAPED ASSESS MENT. ACCORDINGLY, WE UPHOLD THE REASSESSMENT MADE U/S 147 OF THE ACT. 5. WITH REGARD TO MERIT OF THE ADDITION, WE FOUND T HAT DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE A.O. HAS OB SERVED THAT THE ASSESSEE COULD NOT FILE VITAL DOCUMENTS SUCH AS DEL IVERY CHALLANS, TRANSPORT RECEIPTS, OCTROI RECEIPT FOR PAYMENT OF O CTROI DUTY, RECEIPT OF WEIGHBRIDGE FOR WEIGHMENT OF GOODS, EXCISE GATE PAS S ETC. AFTER MAKING ENQUIRY, THE A.O. HELD THAT THE ASSESSEE PUR CHASED GOODS FROM SOME OTHER SUPPLIERS WITHOUT BILL AND TAKEN BILL FR OM HAWALA DEALERS. ITA NO. 5201 TO 5203/MUM/2018 VIJAY J. PITHADIA VS ACIT 3 THEREAFTER THE A.O. ESTIMATED EXTRA PROFIT OF 22.68 %, 23.22% AND 20.46% FOR THE A.Y. 2009-10 TO 2011-12 RESPECTIVELY IN RESPECT OF ALLEGED BOGUS PURCHASES AND ADDED THE SAME IN ASSES SEES INCOME. 6. BEFORE THE LD. CIT(A), THE ASSESSEE FILED ADDITI ONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (IN SH ORT, THE RULES) WHICH INDICATES THAT THE EVIDENCE REGARDING PRICE C OMPRISING OF PURCHASE OF VARIOUS ITEMS MADE FROM ALLEGED ACCOMMO DATION DEALERS VIS A VIS PURCHASES MADE FROM OTHER DEALERS DURING THE YEAR. HOWEVER, THE LD. CIT(A) HAS NOT ADMITTED THE ADDITIONAL EVID ENCE AND WITHOUT ANY REASONING, REJECTED THE SAME. AS PER THE LD AR, ALL THESE BILLS GOES TO THE ROOT OF THE ISSUE FOR DECIDING THE PROFIT ELEME NT EMBEDDED IN SUCH PURCHASES. SHE ALSO INVITED OUR ATTENTION TO THE GR OSS PROFIT DECLARED BY THE ASSESSEE DURING THE YEARS UNDER CONSIDERATION W HICH ARE RANGING BETWEEN 15 TO 20%. SHE ALSO SUBMITTED THAT FOLLOWIN G DETAILS WERE FILED BEFORE THE A.O.: A. QUANTITATIVE DETAILS FOR PURCHASES MADE FROM THE PARTIES SPECIFICALLY MENTIONED AS BOGUS BILLERS AS REFERRED IN NOTICE U/S 142(1) B. TOTAL LIST OF PURCHASE PARTIES ALONGWITH NAME, A DDRESS AND AMOUNT OF PURCHASES MADE DURING THE YEAR UNDER REFE RENCE. C. PHOTOCOPIES OF BILLS FOR THE ALLEGED BOGUS PURCH ASES MADE. D. PHOTOCOPIES OF DELIVERY CHALLANS FOR THE ALLEGED BOGUS PURCHASES MADE. ITA NO. 5201 TO 5203/MUM/2018 VIJAY J. PITHADIA VS ACIT 4 E. PHOTOCOPIES OF BANK STATEMENT EVIDENCING THE PAY MENT MADE TOWARDS THE ALLEGED BOGUS PURCHASES MADE. F. ALLOCATION OF PURCHASES MADE TOWARDS VARIOUS JOB WORK CONTRACTS IN WHICH THE SAID ALLEGED BOGUS PURCHASES WERE UTILIZED. 7. THE LD. AR ALSO RELIED ON VARIOUS JUDICIAL PRONO UNCEMENTS IN SUPPORT OF THE CONTENTION THAT AFTER FILING THE ABO VE DETAILS, NO ADDITION IS WARRANTED. 8. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS PASSED BY THE AUTHORITIES BELOW AND CONTENDED THAT THE ASSESS EE COULD NOT PROVE THE GENUINENESS OF PURCHASES AND THEREFORE, KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS BEING CONTRACTOR, THE A.O. H AS VERY REASONABLY ESTIMATED THE PROFIT AFTER GIVING DETAILED FINDING IN THE ORDER OF RESPECTIVE YEARS. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAV E ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LOWE R AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY THE LD. AR DURING THE COURSE OF HEARING BEFORE US. FROM THE RECORD WE FOUND THAT THE ASSESSEE IS IS ENGAGED IN JOBWORK OF FALSE CEILING, DUCTING, INSUL ATION ETC. ON GETTING INFORMATION FROM THE SALES TAX DEPARTMENT THAT THE ASSESSEE HAS TAKEN ACCOMMODATION BILL, THE A.O. HAS REOPENED THE ASSES SMENT AND ITA NO. 5201 TO 5203/MUM/2018 VIJAY J. PITHADIA VS ACIT 5 THEREAFTER MADE ADDITION BY ESTIMATING G.P. ON THE ALLEGED PURCHASES WHICH RANGES FROM 20.46% TO 23.22%. 10. FROM THE RECORD, WE ALSO FOUND THAT BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAS FILED QUANTITATIVE DETAILS FOR PUR CHASES MADE FROM THESE PARTIES, LIST OF PURCHASE PARTIES ALONGWITH N AME, ADDRESS AND AMOUNT OF PURCHASES, COPY OF DELIVERY CHALLANS FOR ALLEGED BOGUS PURCHASES, COPY OF BANK STATEMENT EVIDENCING THE PA YMENT MADE TOWARDS THE ALLEGED BOGUS PURCHASES. THE ASSESSEE H AS ALSO FILED DETAILS OF ALLOCATION OF PURCHASES MADE TOWARDS VAR IOUS JOB WORK CONTRACT IN WHICH THE SAID ALLEGED BOGUS PURCHASES WERE UTILIZED. WE ALSO FOUND THAT THE ASSESSEE HAS SHOWN G.P. RANGING FROM 15 TO 20%, THEREFORE, KEEPING IN THE VIEW THE VARIOUS JUDICIAL PRONOUNCEMENTS AND FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WE MOD IFY THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THE A.O. TO RESTRI CT THE ADDITION TO THE EXTENT OF 7% OF THE ALLEGED BOGUS PURCHASES. WE DIR ECT ACCORDINGLY. 11. IN THE RESULT, ALL THESE THREE APPEALS ARE IN A LLOWED IN PART IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2019. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 13/12/2019 ITA NO. 5201 TO 5203/MUM/2018 VIJAY J. PITHADIA VS ACIT 6 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//