MR.PURVESH D ZAVERI, MUMBAI V. ITO WARD 19(2)(5), MUMBAI

ITA 5563/MUM/2018

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2229 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H ANSARILD
• Keywords: Bogus purchase
• Section: 142(1); 133(6); 148; 144

Judgement Text

1 ITA NO.5563/MUM/2018 PURVESH D. ZAVERI ASSESSMENT YEAR-2011-12 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.5563/MUM/2018 ( / ASSESSMENT YEAR:2011-12) MR. PURVESH D. ZAVERI ROOM NO. 6, GROUND FLOOR R.M. CHAWL, LNHO COMPOUND, 7 K.M MUNSHI MARG, CHOWPATTY, MUMBAI-400 007. / VS. I. T. O WARD 19(2)(5) 2 ND FLOOR, MATRU MANDIR TARDEO MUMBAI-400 007 !'# ./ ./PAN/GIR NO. AAEPZ-8042-P ( ! /APPELLANT ) : ( ' ! / RESPONDENT ) ! / APPELLANT BY : NONE ' ! / RESPONDENT BY : SHRI AKHTAR H. ANSARI-LD.DR / DATE OF HEARING : 14/11/2019 / DATE OF PRONOUNCEMENT : 20/11/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2011-12 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME-TAX (APPEALS)-6, MUMBAI [IN SHORT REFERRED TO AS CIT(A )], APPEAL NO.CIT(A)- 2 ITA NO.5563/MUM/2018 PURVESH D. ZAVERI ASSESSMENT YEAR-2011-12 6/IT-66/2059/2017-18 DATED 06/07/2018 QUA CONFIRMATION OF ADDITION OF RS.3.29 LAKHS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE P ROCEED TO DISPOSE-OFF THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY U/S. 144 R. W.S. 147 ON 22/02/2016 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED A T RS.5.61 LACS AFTER SOLE ADDITION OF ALLEGED BOGUS / SUSPICIOUS PURCHASES FOR RS. 3.29 LACS AS AGAINST RETURNED INCOME OF RS.2.32 LACS FILED BY TH E ASSESSEE ON 26/09/2011. 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM THE DGIT, MUMBAI / SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRAN SPIRED THAT THE ASSESSEE OBTAINED ACCOMMODATION PURCHASE BILLS OF R S.3.29 LACS FROM AN ENTITY NAMELY M/S. DAKSHA ENTERPRISES. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 07/11/2014 WHICH WAS FOLLOWED BY STATUTORY NOTICE U /S 142(1) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE STATED PU RCHASES. THE ASSESSEES FAILURE TO DO THE SAME AND IN VIEW OF TH E FACT THAT NOTICE ISSUED U/S 133(6) TO THE STATED SUPPLIER TO CONFIRM THE TR ANSACTIONS REMAINED UNSERVED, THE SAID PURCHASES WERE DISALLOWED AND AD DED TO THE INCOME OF THE ASSESSEE. 3 ITA NO.5563/MUM/2018 PURVESH D. ZAVERI ASSESSMENT YEAR-2011-12 3. AGGRIEVED, THE ASSESSEE CONTESTED THE STAND OF T HE LD. ASSESSING OFFICER BEFORE LEARNED FIRST APPELLATE AUTHORITY AN D INTER-ALIA, SUBMITTED THAT THE BOOKS WERE DULY AUDITED U/S 44AB AND THE PAYMEN T TO THE SUPPLIER WAS THROUGH BANKING CHANNEL. IN SUPPORT, THE ASSESSEE A LSO FILED THE RESALE IDENTIFICATION STATEMENT, BOOKS OF ACCOUNT, TAX AUD IT REPORT, COPY OF BANK STATEMENTS, COPY OF LEDGER ACCOUNT, XEROX COPIES OF PURCHASE/SALES INVOICES ETC TO SUBSTANTIATE THE SAID PURCHASES AND PLEADED FOR REASONABLE ESTIMATION. HOWEVER, THE SAID PLEAS COULD NOT CONVI NCE LEARNED FIRST APPELLATE AUTHORITY, WHO CONFIRMED THE STAND OF THE LD.AO. AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEFORE US. 4. AFTER CAREFUL CONSIDERATION, WE ARE OF THE CONSI DERED OPINION THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIA L KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. UNDISPUTEDLY THE ASS ESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PA YMENTS TO THE SUPPLIERS WERE THROUGH BANKING CHANNELS. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE PURCHASES AND COULD NOT PRODUCE THE SUPPLIER TO CONFIRM THE TRANSACTION S AND THEREFORE, THE ONUS CASTED UPON ASSESSEE, IN THIS REGARD, REMAINED UNDI SCHARGED. THEREFORE, ON THE GIVEN FACTS AND CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SUSTAINED, WOULD BE TO ACCOUNT FOR PROFIT ELEMENT E MBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNE D BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AN D UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES. KEEPING IN VIEW GROSS PROFIT RATE OF MORE 4 ITA NO.5563/MUM/2018 PURVESH D. ZAVERI ASSESSMENT YEAR-2011-12 THAN 12% REFLECTED BY THE ASSESSEE, WE ESTIMATE THE ADDITIONS @12.5% OF ALLEGED BOGUS PURCHASES OF RS.3,29,175/- WHICH COME S TO RS.41,147/-. THE BALANCE ADDITION STANDS DELETED. 5. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2019 SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 20/11/2019 SR.PS:-**PP,SPS '( )( / 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.