ASSISTANT COMMISSIONER OF INCOME TAX-6(3)(1), MUMBAI V. FREE INDIA ASSURANCE SERVICES LTD., MUMBAI

ITA 5268/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8891 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBOBDH RATNAPARKH I
• Keywords: Bogus purchase
• Section: 69C; 250

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5268/ / 2019 (. . 2011-12 ) ITA NO.5268/MUM/2019(A.Y.2011-12) ASSTT. COMMISSIONER OF INCOME TAX-6(3)(1), ROOM NO.506, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020. ...... ) / APPELLANT VS. FREE INDIA ASSURANCE SERVICES LTD., 209, PRIME PLAZA, B.M.ROAD, ELPHINSTONE (EAST), MUMBAI 400 013 PAN: AAACF3879K ..... !*/ RESPONDENT ASSESSEE BY : SHRI SUBOBDH RATNAPARKH I REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 08/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 11/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI ( IN SHORT THE CIT (A)) DATED 11/04/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTME NT SUBMITTED THAT THE ASSESSEE HAS INDULGED IN BOGUS PURCHASES. SINCE, THE ASSES SEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE PURCHASES AND SUPPLIERS, THE ASSESSING OFFICER MADE 2 . 5268/ / 2019 (. . 2011-12 ) ITA NO.5268/MUM/2019(A.Y.2011-12) ADDITION OF THE ENTIRE SUCH PURCHASES AGGREGATING T O RS.4,83,525/-. IN THE FIRST APPEALLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE A DDITION TO 12.5% ON BOGUS PURCHASES. THE LD.DEPARTMENTAL REPRESENTATIVE SUB MITTED THAT THE ENTIRE BOGUS PURCHASES SHOULD BE DISALLOWED IN LINE WITH THE DEC ISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEINS VS. DCIT, 250 T AXAMAN 22. 3. PER CONTRA, SHRI SUBOBDH RATNAPARKHI APPEARING ON BEHALF OF THE ASSESSEE SUPPORTED THE FINDINGS OF CIT(A). THE LD.AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MULTIPLE ACTIVITIES. THE DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES HAS BEEN MADE BY THE ASS ESSING OFFICER IN RESPECT OF TRADING OF CONSUMER PRODUCT BUSINESS CARRIED OUT BY THE ASSESSEE. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE MADE PURCHASES OF WATER FLASKS AGGREGATING TO RS.4,83,525/- FROM M/S. RUSHA BH SALES CORPORATION. THE ASSESSEE FURNISHED VARIOUS DOCUMENTS VIZ. GRN, PURC HASE INVOICES, BANK STATEMENT, ETC. TO PROVE GENUINENESS OF PURCHASES. THE ASSESS EE FURTHER FURNISHED RECONCILIATION STATEMENT OF PURCHASES AND SALES. T HUS, THE ASSESSEE COULD SHOW ONE TO ONE CORRELATIONS WITH THE PURCHASES AND SALES. DESPITE THAT THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE PURCHASES FROM M/S. RU SHABH SALES CORPORATION TERMING IT TO BE BOGUS. THE CIT(A) AFTER APPRECIAT ING THE EVIDENCES FURNISHED BY THE ASSESSEE RESTRICTED THE ADDITION TO 12.5% OF THE TO TAL PURCHASES. SINCE, THE AMOUNT INVOLVED WAS MINISCULE THE ASSESSEE ACCEPTED THE AD DITION AND DECIDED NOT TO FILE FURTHER APPEAL. THE LD.AUTHORIZED REPRESENTATIVE O F THE ASSESSEE ASSERTED THAT IT IS A CASE WHERE NO ADDITION SHOULD HAVE BEEN MADE IN THE LIGHT OF DOCUMENTS FURNISHED BY THE ASSESSEE AND THE DECISION IN THE CASE OF CI T VS. CENTURY PLYWOOD INDIA LTD., 262 TAXAMAN 13(SC). 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAD MADE PURCHASES TO THE TUNE OF RS.4,83,525/- FROM M/S. RUSHABH SALES CORPORATION. SINCE, ASSESSEE FAILED TO PROVE GENUINENESS OF THE SAID DEALER AND THE TRANSACTIONS, 3 . 5268/ / 2019 (. . 2011-12 ) ITA NO.5268/MUM/2019(A.Y.2011-12) THE ASSESSING OFFICER HELD THAT THE PURCHASES ARE BOGUS AND MADE ADDITION OF THE ENTIRE SUCH PURCHASES UNDER SECTION 69C OF THE ACT. IN FIRST APPEAL, THE CIT(A) AFTER RECORDING THE FACT THAT THE SALES DECLARED BY THE A SSESSEE HAS BEEN ACCEPTED BY ASSESSING OFFICER, THE CIT(A) RESTRICTED THE ADDITI ON TO RS.60,441/- I.E. 12.5% OF THE ALLEGED BOGUS PURCHASES. WE FIND THAT THE ORDER OF CIT(A) IS IN LINE WITH THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS. PARAMSAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECID ED ON 15/07/2019. THE ASSESSEE HAS ACCEPTED THE ADDITION. WE FIND NO INFIRMITY IN THE IMPUGNED ORDER, THE SAME IS UPHELD AND THE APPEAL BY REVENUE IS DISMISSED BEING DEVOID OF MERIT. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 11 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 11/03/2021 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