MULTIPLE IMAGES, MUMBAI V. ITO -WD- 21 (2)(3), MUMBAI

ITA 5421/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6291 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH LD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 133(6); 143(2); 148

Judgement Text

1 ITA NO.5421-22/MUM/2018 MULTIPLE IMAGES ASSESSMENT YEARS - 2010-11 & 2011-12 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.5421/MUM/2018 ( / ASSESSMENT YEAR:2010-11) & ./ I.T.A. NO.5422/MUM/2018 ( / ASSESSMENT YEAR:2011-12) MULTIPLE IMAGES 10, DHANRAJ INDUSTRIAL ESTATE SITARAM JADHAV MARG LOWER PAREL (WEST), MUMBAI 400 013 / VS. I TO - WARD 2 1(2 ) (3) PIRAMAL CHAMBERS PAREL, MUMBAI 400 013 !'# ./ ./PAN/GIR NO. AABFM-0372-N ( !' /APPELLANT ) : ( #$!' / RESPONDENT ) !'% / APPELLANT BY : SHRI JITENDRA SINGH-LD. AR #$!'% / RESPONDENT BY : MS. JOTHILAKSHMI NAYAK- LD. DR / DATE OF HEARING : 10/10/2019 / DATE OF PRONOUNCEMENT : 10/10/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEALS BY ASSESSEE FOR ASSESSMENT YEA RS [AY] 2010-11 AND 2011-12 CONTEST SEPARATE ORDERS OF LD. COMMISSI ONER OF INCOME-TAX (APPEALS)-1, MUMBAI [IN SHORT REFERRED TO AS CIT(A )] DATED 16/08/2018 & 2 ITA NO.5421-22/MUM/2018 MULTIPLE IMAGES ASSESSMENT YEARS - 2010-11 & 2011-12 28/08/2018 ON CERTAIN COMMON GROUNDS OF APPEAL. SIN CE THE ISSUES ARE IDENTICAL, THE APPEALS ARE BEING DISPOSED-OFF BY WA Y OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE & BREVITY. THE GR OUNDS FOR AY 2010-11 READ AS UNDER: - 1. THE LD. CIT (A) ERRED IN CONFIRMING THE ACTION O F LD. AO IN MAKING ADDITION OF RS.5,59,317/- BEING 25% OF ALLEGED BOGUS PURCHASES WITHOUT APPREC IATING THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, THE ADDITION OF RS.5,59,317/- MADE IS U NJUSTIFIED AND THE SAME MAY BE DELETED. 2. THE LD. CIT (A) FAILED TO APPRECIATE THAT THE PU RCHASES MADE DURING THE YEAR WERE DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT AND THE S AME WERE SUPPORTED WITH PROPER DOCUMENTARY EVIDENCES. THUS, THE ADDITION OF RS.5,5 9,317/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES IS UNJUSTIFIED AND THE SAME MAY BE DELETE D. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY BOTH THE REPRESENTATIVES AND DELIBERATED ON JUDICIAL PRONOUN CEMENTS AS CITED BEFORE US. 2.1 FACTS FROM RECORDS OF AY 2010-11 WOULD REVEAL T HAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN PRINTIN G WORK, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 24/11/2016 WH EREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.22.06 LACS, AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.5.59 LACS AS AGAINST RETURNED INCOME OF RS.16.47 LACS FILED BY THE ASSESSEE ON 24/09/2010 W HICH WAS INITIALLY PROCESSED U/S.143(1). 2.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRANSPIRED THAT THE ASSESS EE OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.22.37 LACS FROM 6 ENTITIES, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED AT PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DU E PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 29/03/2016 WHICH WAS FOLLOWED BY STATUTORY 3 ITA NO.5421-22/MUM/2018 MULTIPLE IMAGES ASSESSMENT YEARS - 2010-11 & 2011-12 NOTICES U/S 143(2) & 142(1) WHEREIN THE ASSESSEE WA S DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WERE SUPPLIED IN DUE COURS E OF TIME. 2.3 ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES BY SUBMITTING LEDGER EXTRACTS, PURCHASE INVOICES, BANK STATEMENT EVIDENC ING PAYMENT TO SUPPLIERS THROUGH BANKING CHANNELS, HOWEVER, NOTICE S ISSUED U/S 133(6) TO ALL THE ENTITIES WERE RETURNED BACK UNSERVED. THE A SSESSEE FAILED TO PROVIDE THE WHEREABOUTS OF THE SUPPLIERS AND ALSO FAILED TO PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF TRANSACTIONS. SINCE T HE ASSESSEE FAILED TO DISCHARGE THE ONUS OF SUBSTANTIATING THE PURCHASES, LD. AO, INTER-ALIA, RELYING UPON THE DECISIONS OF HONBLE GUJARAT HIGH COURT RENDERED IN CIT V/S SIMIT P.SHETH 356 ITR 451 AND CIT V/S BHOLANATH POLY FAB PVT LTD. ITA NO.63 OF 2012 23/10/2012, ESTIMATED THE ADDITIONS @25% OF DISPUTED PURCHASES. THE SAME RESULTED INTO AN ADDITION OF RS .5.59 LACS IN THE HANDS OF THE ASSESSEE. THE STAND OF LD. AO, UPON CONFIRM ATION BY LEARNED FIRST APPELLATE AUTHORITY, IS UNDER CHALLENGE BEFORE US. 3. AFTER CAREFUL CONSIDERATION OF ORDERS OF LOWER A UTHORITIES AND AFTER APPRECIATING THE ARGUMENTS ADVANCED BY RESPECTIVE R EPRESENTATIVES, WE ARE OF THE CONSIDERED OPINION THERE COULD BE NO SALE WI THOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF B USINESS. UNDISPUTEDLY THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIER WAS THROUGH BANKING CHANNE LS. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTAN TIATE THE DELIVERY OF MATERIAL DURING ASSESSMENT AS WELL AS APPELLATE PRO CEEDINGS. THE 4 ITA NO.5421-22/MUM/2018 MULTIPLE IMAGES ASSESSMENT YEARS - 2010-11 & 2011-12 ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS AND THE ONUS CASTED UPON ASSESSEE, IN THIS REGARD, REMAINED UNDISCHARGED. NOTICES ISSUED U/S 133(6) ELICITED NO SATISFACTORY RESPONSE. UNDER SUCH CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SUSTAINED, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHA SE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POS SIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VA T AGAINST SUCH BOGUS PURCHASES, WHICH LOWER AUTHORITIES HAVE RIGHTLY DON E SO. THEREFORE, FINDING NO INFIRMITY IN THE SAME, WE DISMISS THE APPEAL. 4. FACTS ARE PARI-MATERIA THE SAME IN AY 2011-12 WH EREIN THE ASSESSEE HAS BEEN SADDLED WITH ESTIMATED ADDITION OF 25% OF DISPUTED PURCHASES. THE LD. CIT(A) HAS CONFIRMED THE SAME. FACTS AS WEL L AS ISSUE BEING IDENTICAL, OUR OBSERVATION AS WELL AS ADJUDICATION AS FOR AY 2010-11 SHALL MUTATIS-MUTANDIS APPLY TO THIS YEAR ALSO. CONSEQUEN TLY, THE IMPUGNED ADDITIONS STAND CONFIRMED. THE APPEAL STANDS DISMIS SED. 6. BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 10/10/2019 SR.PS:-JAISY VARGHESE 5 ITA NO.5421-22/MUM/2018 MULTIPLE IMAGES ASSESSMENT YEARS - 2010-11 & 2011-12 '( )( / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,# - , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.