LAXMI SANITARY ENGINEERS & CONTRACTS, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 19(2), MUMBAI

ITA 561/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8653 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 30-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOMNATH M WAJALE LD
• Assessee Lawyers: VIRAJ MEHTA LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.561/MUM/2018 ( / ASSESSMENT YEAR: 2010-11) & ./ I.T.A. NO.562/MUM/2018 ( / ASSESSMENT YEAR: 2011-12) LAXMI SANITARY ENGINEERS & CONTRACTS 4A, TRIUMPH INDUSTRIAL PREMISES CO-OP SOC. LTD. DINDOSHI, VITBHATTI, GOREGAON (EAST) MUMBAI-400 063. / VS. A CIT RANGE - 19(2) PIRAMAL CHAMBERS, LALBAUG MUMBAI. !' ./ ./PAN/GIR NO. AABLF-3994-M ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : VIRAJ MEHTA LD.AR / RESPONDENT BY : SOMNATH M. WAJALE - LD.DR / DATE OF HEARING : 08/04/2019 / DATE OF PRONOUNCEMENT : 08/04/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1.1 AFORESAID APPEALS BY ASSESSEE FOR ASSESSMENT YE ARS [AY] 2010-11 & 2011-12 CONTEST SEPARATE ORDERS OF FIRST APPELLATE AUTHORITY QUA CONFIRMATION 2 OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. ALTHOUGH THE ASSESSEE, IN ITS GROUND OF APPEAL, HAS CHALLENGED T HE LEGALITY OF REASSESSMENT PROCEEDINGS U/S 147/148, HOWEVER, NO A RGUMENTS, IN THIS REGARD, HAVE BEEN MADE DURING HEARING BEFORE US AND THEREFORE, THE SAME ARE NOT CONSIDERED WHILE ADJUDICATING THE APPEALS. SINCE COMMON ISSUES ARE INVOLVED UNDER BOTH THE APPEALS, WE PROCEED TO DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE & BREVITY. 1.2 IT HAS BEEN NOTED THAT THE APPEALS HAVE BEEN FI LED WITH A DELAY OF 57 DAYS, THE CONDONATION OF WHICH HAS BEEN SOUGHT BY T HE ASSESSEE ON THE STRENGTH OF CONDONATION PETITION DATED 15/12/2017 D ULY SUPPORTED BY AN AFFIDAVIT OF ONE OF THE PARTNERS OF ASSESSEE FIRM. UPON PERUSAL OF THE SAME, IT TRANSPIRES THAT THE DELAY HAS BEEN ATTRIBUTED TO THE FACT THAT THE CHARTERED ACCOUNTANT OF THE ASSESSEE COULD NOT HAND OVER THE IMPUGNED OR DER TO THE ASSESSEE DUE TO HIS ILLNESS. ALTHOUGH LD. DR OPPOSE D THE CONDONATION, HOWEVER, THE BENCH FORMED AN OPINION THAT KEEPING I N VIEW THE PRINCIPLES LAID DOWN BY HONBLE APEX COURT IN 167 ITR 471 (SC) COLLECTOR, LAND ACQUISITION VS. KATIJI , THE ASSESSEE DESERVE CONDONATION OF DELAY. WE ORDER SO. FIRST, WE TAKE UP APPEAL FOR AY 2010-11. ITA NO. 561/MUM/2018 AY: 2010-11 2.1 FACTS LEADING TO THE PRESENT APPEAL ARE THAT TH E ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED AS SERVICE CONTRACTOR OF PLUMBING & SANITARY WORK WAS SUBJECTED TO REASSESSMENT PROCEEDINGS BY LD. AS SISTANT COMMISSIONER OF INCOME TAX-CIRCLE 19(2), MUMBAI [AO ] FOR THE IMPUGNED AY U/S 143(3) READ WITH SECTION 147 ON 19/03/2014 WHEREIN THE ASSESSEE WAS SADDLED WITH ESTIMATED ADDITIONS OF 25% ON ACCO UNT OF ALLEGED BOGUS 3 PURCHASES FOR RS.228.76 LACS STATED TO BE MADE FROM 6 PARTIES . THE PARTY- WISE DETAILS HAVE ALREADY BEEN EXTRACTED IN THE QUA NTUM ASSESSMENT ORDER AT PARA 4.1. THE ORIGINAL RETURN OF INCOME FILED ON 09/10/2010 W AS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS GOT TRIGGERED VIDE ISSUANCE OF NOTICE U/S 148 DATED 26/04/2013 PURSUANT TO RECEIPT OF CER TAIN INFORMATION FROM SALES TAX AUTHORITIES THAT THE ASSESSEE STOOD BENEFICIARY OF ALLEGED BOGUS PURCHASES AGGREGATING TO RS.228.76 LACS FROM 6 PARTIES. THESE PURCHASES WERE STATED TO BE MADE WITHOUT ACTUAL PURCHASE / DE LIVERY OF MATERIAL FROM THOSE PARTIES. ALTHOUGH THE ASSESSEE DEFENDED THE S AME VIDE REPLY DATED 13/03/2014, HOWEVER, THE SAME COULD NOT FIND FAVOR WITH LD. AO WHO ESTIMATED THE ADDITIONS @25% AGAINST THESE PURCHASE S AND ACCORDINGLY, MADE AN ADDITION OF RS.57.19 LACS IN THE HANDS OF T HE ASSESSEE. THE STAND OF LD. AO, UPON CONFIRMATION BY FIRST APPELLATE AUT HORITY, IS UNDER APPEAL BEFORE US. 3. THE ONLY SUBMISSIONS ADVANCED BY LD. AR IS THE F ACT THAT THE ASSESSEE WAS SADDLED WITH SIMILAR ADDITIONS IN AY 2 009-10 WHICH REACHED UP-TO THE LEVEL OF THIS TRIBUNAL VIDE ITA NO. 560/M UM/2018 ORDER DATED 02/07/2018 WHEREIN THE ADDITIONS HAVE BEEN RESTRICT ED TO 2% OF ALLEGED BOGUS PURCHASES AND THEREFORE, IMPUGNED ADDITIONS MAY BE RESTRICTED TO THAT EXTENT. ALTHOUGH LD. DR SUPPORTED THE STAND OF LOWER AUTHORITIES IN MAKING THE IMPUGNED ADDITIONS, HOWEVER, FAILED TO R EBUT THE SAID FACT. 4. UPON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS, WE CONCUR WITH THE STAND OF LD. AR THAT SIMILAR ISSUE IN AY 2009-10 HA S ALREADY BEEN ADJUDICATED BY THE COORDINATE BENCH OF THIS TRIBUNA L IN ASSESSEES OWN 4 CASE, A COPY OF WHICH HAS BEEN PLACED ON RECORD. WE FIND THAT SIMILAR ADDITIONS MADE BY THE REVENUE IN AY 2009-10 HAS BEE N RESTRICTED TO 2% AFTER CONSIDERATION OF FACTUAL MATRIX. NO MATERIAL CHANGES IN FACTS OR CIRCUMSTANCES HAVE BEEN DEMONSTRATED BEFORE US. NOT HING ON RECORD SUGGEST THAT THE AFORESAID RULING IS NOT APPLICABLE TO THE FACT OF THE CASE. THEREFORE, FINDING NO REASON TO DEVIATE FROM THE SA ME, WE DIRECT LD. AO TO RESTRICT THE IMPUGNED ADDITIONS TO 2% OF ALLEGED BOGUS PURCHASES. THE APPEAL STANDS PARTLY ALLOWED. ITA NO. 562/MUM/2018 AY: 2011-12 5. THE FACTS ARE IDENTICAL IN THIS AY WHEREIN THE A SSESSEE HAS BEEN SADDLED WITH ESTIMATED DISALLOWANCE OF 25% AGAINST ALLEGED BOGUS PURCHASES. THE STAND OF LD. AO, UPON CONFIRMATION BY FIRST APP ELLATE AUTHORITY, IS UNDER CHALLENGE BEFORE US. FACTS AND CIRCUMSTANCES BEING PARI- MATERIA THE SAME, WE DIRECT LD. AO TO RESTRICT THE IMPUGNED ADDITIONS TO 2% OF ALLEGED BOGUS PURCHASES. THE APPEAL STANDS PARTLY ALLOWED. CONCLUSION 6. BOTH THE APPEALS STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH APRIL, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. '& / THE APPELLANT 5 2. '('& / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. ) *'+ , + , / DR, ITAT, MUMBAI 6. * -./ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.