ITO WD 2(5), KALYAN V. VIJAYSINGH C. RAJPUROHIT, THANE

ITA 5591/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9245 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP LD
• Assessee Lawyers: SUBODH RATNAPARKHI LD
• Keywords: Bogus purchase
• Section: 69C; 143(3); 133(6)

Judgement Text

ITA NO.5591/MUM/2015 VIJAYSINGH C.RAJPUROHIT ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5591/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER WARD 2(5) 2 ND FLOOR, MOHAN PLAZA WAYLE NAGAR, KHADAKPADA, KALYAN KALYAN-421 301 / VS. VIJAYSINGH C. RAJPUROHIT PROP. PACIFIC CHEMICALS W-111,KHARWI MIDC BADLAPUR (E) THANE 421 503 '# ./ ./ PAN/GIR NO.AGHPR-3686-C ( #% /APPELLANT ) : ( &#% / RESPONDENT ) REVENUE BY : POOJA SWAROOP, LD. DR ASSESSEE BY : SUBODH RATNAPARKHI,LD.AR / DATE OF HEARING : 19/09/2017 / DATE OF PRONOUNCEMENT : 04/10/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2011-12 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-3 2 ITA NO.5591/MUM/2015 VIJAYSINGH C.RAJPUROHIT ASSESSMENT YEAR 2011-12 [CIT(A)], THANE, APPEAL NO. 246-THN/14-15 DATED 03/ 09/2015 QUA RELIEF PROVIDED TO THE ASSESSEE AGAINST CERTAIN BOGUS PURCHASES. THE ASSESSMENT WAS FRAMED BY LD. JOINT COMMISSIONER OF INCOME TAX OFFICER, RANGE-2, KALYAN [AO] U/S 143(3) ON 24/03/2014. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING OF CHEMICALS UNDER PROPRIETORSHIP CONCERN NAMELY PACIFIC CHEMICALS WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 24/03/2014 AT RS.64,01,100/- INTER-ALIA, AFTER ADDITION OF CERTAIN BOGUS PURCHASES U/S 69C FOR RS.51,15,600/- AS AGAINST RETURNED INCOME OF RS.12,20,269/- E-FILED BY THE ASSESSEE ON 30/09/2011. THE ASSESSEE REFLECTED TURNOVER OF RS.11.62 CRORES WITH GP/NP RATES OF 6.97% & 0.96% RESPECTIVELY. 2.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS, IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.51,15,600/- FROM THREE SUCH PARTIES. NOTICES SENT U/S 133(6) TO THESE PARTIES TO CONFIRM THE TRANSACTIONS EITHER REMAINED UN-SERVED OR NO RESPONSE WAS RECEIVED AGAINST THE SAME. THE ASSESSE E, IN SUPPORT, SUBMITTED DOCUMENTARY EVIDENCES LIKE INVOICE COPIES, TRANSPORT RECEIPTS, WEIGHT SLIPS ETC. AND CONTENDED THAT THE MATERIAL WAS PURCHASES AND CONSUMED IN THE PRODUCTION PROCESS. HOWEVER, THE LD . AO NOTED THAT THE ASSESSEE COULD NOT FILE ANY CONFIRMATION FROM THE S AID PARTY AND DOCUMENTARY EVIDENCES WERE INSUFFICIENT TO PROVE TH E SAID TRANSACTIONS 3 ITA NO.5591/MUM/2015 VIJAYSINGH C.RAJPUROHIT ASSESSMENT YEAR 2011-12 CONCLUSIVELY. FINALLY, NOT CONVINCED WITH ASSESSEE S SUBMISSIONS, THE PURCHASES WERE TREATED AS NON-GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE U/S 69C. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 03/09/2 015 WHERE THE ASSESSEE REITERATING THE CONTENTIONS PLACED RELIANC E ON SEVERAL JUDICIAL PRONOUNCEMENTS. THE LD. CIT(A), WHILE CONCURRING WI TH THE SAME TO A CERTAIN EXTENT, RESTRICTED THE IMPUGNED ADDITIONS T O 25% OF THESE PURCHASES WHICH CAME TO RS.12,78,900/-. AGGRIEVED, THE REVENU E IS IN FURTHER APPEAL BEFORE US. 4.1 THE LD. DR PLACING RELIANCE ON THE STAND OF LD . AO DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE FAILED TO S UBSTANTIATE THE DELIVERY OF MATERIAL AND RIGHTLY BEEN SADDLED WITH FULL DISALLO WANCE. THE LD. DR FURTHER SUBMITTED THAT NOTICE SENT U/S 133(6) WAS RETURNED BACK UN-SERVED AND THE ASSESSEE COULD NOT PRODUCE ANY OF THE SAID PARTY TO CONFIRM THE TRANSACTION AND THEREFORE, FAILED TO DISCHARGE THE ONUS CASTED ON HIM. IT WAS FURTHER PLEADED THAT PURCHASE INVOICES AND BANK STATEMENTS, BY ITSELF, WAS NOT SUFFICIENT TO PROVE THE TRANSACTIONS. 4.2 PER CONTRA, LD. COUNSEL FOR ASSESSEE [AR] DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE CONSUMED THE PURCHASED MATER IAL IN THE PRODUCTION PROCESS AND WAS IN POSSESSION OF PRIMARY PURCHASE D OCUMENTS AND ALL THE PAYMENTS WERE THROUGH BANKING CHANNELS AND THEREFO RE, FULL ADDITION WAS NOT JUSTIFIED. OUR ATTENTION WAS DRAWN TO THE FACT THAT THE ASSESSEE 4 ITA NO.5591/MUM/2015 VIJAYSINGH C.RAJPUROHIT ASSESSMENT YEAR 2011-12 ACCEPTED THE VERDICT OF LD. CIT(A) SINCE THE SAME W AS FAIR & REASONABLE UNDER THE CIRCUMSTANCES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE / CONSUMPTION OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS WHICH WAS MANUFACTURING OF CHEMICALS. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISP UTED BY THE REVENUE AND THE PAYMENTS WERE THROUGH BANKING CHANNELS. THE PURCHASES WERE BACKED BY INVOICES AND OTHER DOCUMENTARY EVIDENCES. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE ANY PARTY FOR CONFIR MATION AND NOTICES SENT U/S 133(6) REMAINED UN-SERVED , WHICH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, THE ADDITION , WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHTLY DONE. THEREFORE, FINDING THE SAME TO BE QUITE FAIR & REASONABLE, WE FIND NO REAS ON TO INTERFERE WITH THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. 5 ITA NO.5591/MUM/2015 VIJAYSINGH C.RAJPUROHIT ASSESSMENT YEAR 2011-12 SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04 .10.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT 3. . ( ) / THE CIT(A) 4. . / CIT CONCERNED 5. (0 , 0 , / DR, ITAT, MUMBAI 6. 12 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI