ITO-31(1)(4), MUMBAI V. SHRI DEVINDERPAL VIDYASAGAR SOOD, MUMBAI

ITA 5236/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7983 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5236/ / 2019 (. . 2010-11 ) ITA NO.5236/MUM/2019(A.Y.2010-11) . 5235/ / 2019 (. . 2011-12 ) ITA NO.5235/MUM/2019(A.Y.2011-12) INCOME TAX OFFICER 31(1)(4), ROOM NO.606, 6 TH FLOOR, KAUTILYA BHAVAN, BKC, BANDRA (E), MUMBAI 400 051 ...... ) / APPELLANT VS. SHRI DEVENDERPAL VIDYASAGAR SOOD, A-101, KRISHNA, PARADISE, PL. 46/47, KHANDEL LAYOU, RAMCHANDRA ROAD, EXT.MALAD MUMBAI 400 064 PAN : AAEPS 4985J ..... !*/ RESPONDENT ASSESSEE BY : SHRI MANISH CHULAWALA REVENUE BY : MS. SMITA VERMA +* / DATE OF HEARING : 08/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 18/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-42, MUMBAI ( I N SHORT THE CIT(A)) DATED 24/05/2019 COMMON FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. SINCE THE FACTS 2 ITA NO.5236/MUM/2019(A.Y.2010-11) ITA NO.5235/MUM/2019(A.Y.2011-12) INVOLVED IN BOTH THE APPEALS AND THE GROUNDS RAISED BY THE REVENUE IN APPEALS FOR THE RESPECTIVE ASSESSMENT YEARS ARE IDENTICAL, THES E APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORD ER. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE : THE ASSESSEE IS ENGAGED IN MANUFACTURING OF TRANSFORMERS. ON THE B ASIS OF INFORMATION RECEIVED BY DGIT(INVN) FROM THE SALES TAX DEPARTMENT, GOVERNMEN T OF MAHARASHTRA, THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT Y EAR 201011 AND 2011-12 WERE REOPENED. AS PER THE INFORMATION RECEIVED, THE ASS ESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.5,16,756/- IN ASSE SSMENT YEAR 2010-11 AND RS.6,02,086/- IN ASSESSMENT YEAR 2011-12 FROM THE D EALERS DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT. THE ASSESSI NG OFFICER HELD THAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES AN D THE SUPPLIERS, AND THUS, MADE ADDITION OF RS.1,03,351/- IN ANY 2010-11 AND RS.1,2 0,417/- IN 2011-12 BY ESTIMATING GP @ 20% ON BOGUS PURCHASES. AGGREIVED BY THE ASSE SSMENT ORDERS, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) FOR THE RESPECTIVE A SSESSMENT YEARS. THE CIT(A) AFTER EXAMINING THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE RESTRICTED THE G.P ADDITION ON BOGUS PURCHASES TO 5%. HENCE, THE PRE SENT APPEAL BY THE REVENUE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVING BONA-FI DE OF THE DEALERS. NO CONFIRMATIONS WERE FILED BY THE ASSESSEE FROM THE DEALERS. EVEN THE NOTICES SENT UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), BY THE ASSESSING OFFICER ON THE ADDRESS FURNISHED BY THE ASSESSEE WERE RECEIVED BACK UNSERVED WITH THE REMARKS NOT KNOWN/LEFT/REFUSED. THE LD. DEPARTMENTAL REP RESENTATIVE FURTHER CONTENDED THAT THE ASSESSEE FAILED TO SUBSTANTIATE FROM THE D OCUMENTS THAT THE GOODS WERE ACTUALLY RECEIVED BY HIM. THE LD. DEPARTMENTAL REP RESENTATIVE VEHEMENTLY SUPPORTING THE ASSESSMENT ORDER SUBMITTED THAT THE ESTIMATION OF G.P ON BOGUS PURCHASES BY THE ASSESSING OFFICER IS FAIR AND REA SONABLE, HENCE, PRAYED FOR SUSTAINING THE SAME. 3 ITA NO.5236/MUM/2019(A.Y.2010-11) ITA NO.5235/MUM/2019(A.Y.2011-12) 4. ON THE CONTRARY, SHRI MANISH CHULAWALA APPEARING ON BEHALF OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FURNISHED RELEVANT DOCUMENTS VIZ. COPIES OF INVOICES, DELIVERY CHALLANS, TRANSPORT BILLS/LORRY RECEIPTS, QUANTITATIVE DETAILS, OPENING STOCK, CONSUMPTION, PURCHASE AND CLOSING STOCK TO S HOW THAT THE GOODS WERE IN FACT RECEIVED BY THE ASSESSEE AND WERE DULY RECORDED IN BOOKS. FURTHER, THE ASSESSEE FURNISHED BANK STATEMENTS EVIDENCING PAYMENTS MADE TO THE SUPPLIERS THROUGH BANKING CHANNELS.. THE LD. AUTHORIZED REPRESENTATI VE FOR THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSEE HAD MADE TOTAL PURCHASE OF . RS.54,00,000/- IN ASSESSMENT YEAR 2010-11 AND RS.74,75,000/- DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2011-12. SUBSTANTIAL PURCHASES WER E ACCEPTED BY THE ASSESSING OFFICER AND ONLY A MINUSCULE PART OF THE PURCHASES I.E. RS.5,00,000/- (APPROX) IN ASSESSMENT YEAR 2010-11 AND RS.6,00,000/- (APPROX) IN ASSESSMENT YEAR 2011-12 WERE DISPUTED. THE LD. AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE VEHEMENTLY CONTENDED THAT THOUGH NO ADDITION IN THE IMPUGNED A SSESSMENT YEAR SHOULD HAVE BEEN MADE IN LIGHT OF DOCUMENTARY EVIDENCES FILE D BY THE ASSESSEE TO PROVE TRAIL OF GOODS, HOWEVER, THE ASSESSEE ACCEPTED THE ORDER OF CIT(A) TO BUY PEACE OF MIND. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ADDITION IN THE IMPUGNED ASSESSMENT YEARS WERE MADE ON ACCOUNT OF A SSESSEES INVOLVEMENT IN OBTAINING ALLEGED BOGUS PURCHASE BILLS. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE ASSESSEE HAS FURNISHED VARIOUS DOCUMENTS TO PR OVE TRAIL OF GOODS. HOWEVER, THE ASSESSEE FAILED TO FURNISH CONFIRMATIONS FROM THE D EALERS. EVEN THE ADDRESSES FURNISHED BY THE ASSESSEE OF SUCH DEALERS WERE FOUN D TO BE IN CORRECT. THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT COULD NOT BE SERVED ON THE SAID ADDRESSES. THUS, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING AUTHENTICITY OF THE DEALERS. THE ASSESSEE HAS DECLARED G.P OF 19% FOR THE ASSES SMENT YEARS UNDER APPEAL. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE AND THE EVIDENCES FILED BY THE ASSESSEE RESTRICTED THE G.P AT 5% OF THE BOG US PURCHASES IN EACH OF THE 4 ITA NO.5236/MUM/2019(A.Y.2010-11) ITA NO.5235/MUM/2019(A.Y.2011-12) IMPUGNED ASSESSMENT YEARS. WE FIND NO REASON TO DI STURB THE WELL REASONED FINDINGS OF THE FIRST APPELLATE AUTHORITY, THE SAME ARE UPHELD. THE APPEALS BY THE REVENUE ARE DISMISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, BOTH THE APPEALS BY REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 18 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 18/03/2021 VM , SR. PS (O/S) !*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