SHRI LAXMIKANT ASUBHAI GALA, MUMBAI V. ITO, WARD-3(5), MUMBAI

ITA 5203/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8899 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RUCHI RATHOD
• Keywords: Bogus purchase
• Section: 201; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5203/ / 2019 (. . 2009-10 ) ITA NO.5203/MUM/2019(A.Y.2009-10) SHRI LAXMIKANT ASUBHAI GALA, G-5, NEW SGAR CHS, SHIVMANDIR ROAD, RAMNAGAR, DOMBIWALI EAST- 421 201 PAN: ABHPG 6121A ...... ) / APPELLANT VS. INCOME TAX OFFICER, WARD 3(5), 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN 421 301 ..... !*/ RESPONDENT ASSESSEE BY : MS.RUCHI RATHOD REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 04/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 08/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE ( IN SHORT THE CIT(A )) DATED 06/06/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. MS.RUCHI RATHOD APPEARING ON BEHALF OF THE ASSE SSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF LABELS AND STICKERS. THE ASSESSMENT YEAR 2009-10 WAS REOPENED ON THE BASIS OF INFORMATION RE CEIVED BY THE DGIT (INV), 2 . 5203/ / 2019 (. . 2009-10 ) ITA NO.5203/MUM/2019(A.Y.2009-10) MUMBAI FROM THE SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. IN THE REOPENED PROCEEDINGS, THE ASSESSING OFFICER HELD TH AT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.2,75,713/- F ROM SUSPICIOUS DEALERS. THE ASSESSEE WAS NEVER SERVED WITH NOTICE DURING THE AS SESSMENT PROCEEDINGS.. THE ASSESSING OFFICER IN EX-PART PROCEEDINGS MADE ADDIT ION OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 06/02/2015 PASSED UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE ASSESSEE FILED EVIDENCES IN THE FORM OF LEDGER ACCOUNTS OF THE SUPPLIERS BEFORE THE CIT(A) TO PROV E GENUINENESS OF THE PURCHASES. HOWEVER, THE SAME WAS REJECTED BY THE CIT(A). HENCE , THE PRESENT APPEAL BY THE ASSESSEE. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE SALES DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED, THEREFO RE, THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. ALTHOUGH THE PURCHASES MADE BY ASSESSEE ARE GENUINE AND ADDITION SHOULD BE DELETED IN ENTIRETY, HOWEVER , WITHOUT PREJUDICE TO THE PRIMARY CONTENTION, THE ADDITION MAY BE RESTRICTED TO THE G.P DECLARED BY THE ASSESSEE OR ANY REASONABLE RATE. 3. PER CONTRA, SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL OF THE ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HE ASSESSEE DID NOT CO-OPERATE IN ASSESSMENT PROCEEDINGS. DESPITE REPEATED NOTICE S THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER, HENCE, THE ASSESSING OFFICER WAS CONSTRAINED TO PASS ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. NO DOCUMENTARY EVIDENCE WAS PRODUCED BY THE ASSESSEE EITHER BEFORE THE ASSESSI NG OFFICER OR BEFORE THE CIT(A) TO SUBSTANTIATE GENUINENESS OF THE PURCHASES/SUPPLIERS . SINCE, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS, THE AUTHORITIES BELOW HAVE RIGH TLY MADE ADDITION OF THE ENTIRE BOGUS PURCHASES. 3 . 5203/ / 2019 (. . 2009-10 ) ITA NO.5203/MUM/2019(A.Y.2009-10) 4. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. A PERUSAL OF THE ASSE SSMENT ORDER SHOWS THAT THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE ASSESSING OFFICER DESPITE SEVERAL NOTICES. SINCE, NO EVIDENCE WAS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER TO PROVE GENUINENESS OF THE PURCHASES AND THE SUPPLIERS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. IT IS RELEV ANT TO MENTION HERE THAT THE ASSESSING OFFICER ACCEPTED THE SALES TURNOVER DECLA RED BY THE ASSESSEE. THUS, IN SUCH CIRCUMSTANCES THE ENTIRE ALLEGED BOGUS PURCHASES C ANNOT BE ADDED. WITHOUT PURCHASES THERE CANNOT BE SALES. THE ASSESSEE MIGH T HAVE PROCURED GOODS FROM GREY MARKET AND THEREAFTER, OBTAINED MATCHING BOGUS PURCHASE BILLS FROM HAWALA OPERATORS. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH BOGUS PURCHASES THAT HAS TO BE BROUGHT TO TAX. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE PROPOSE TO RESTRICT THE ADDITION AT 12.5% OF THE ALLEGED BOGU S PURCHASES. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS AGREED FOR THE A DDITION @12.5% ON THE ALLEGED BOGUS PURCHASES. THE ADDITION IS RESTRICTED TO RS. 34,465/- I.E. 12.5% OF THE TOTAL BOGUS PURCHASES. THE IMPUGNED ORDER IS MODIFIED , ACCORDINGLY AND THE APPEAL BY THE ASSESSEE IS PARTLY ALLOWED, IN THE TERMS AFORES AID. 5. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY TH E 08 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 08 /03/2021 VM , SR. PS (O/S) 4 . 5203/ / 2019 (. . 2009-10 ) ITA NO.5203/MUM/2019(A.Y.2009-10) !*12'.* COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. !* / THE RESPONDENT. 3. 3* ( )/ THE CIT(A)- 4. 3* CIT 5. 45!* , . . . , / DR, ITAT, MUMBAI 6. 56789 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPRO VED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER