INCOME TAX OFFICER WARD 1(4), THANE V. M/S. J.M.C. EQUIPMENTS & CO., THANE

ITA 5637/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3773 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 147; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5637 //2019 (. . 2011-12 ) ITA NO.5637/MUM/2019 (A.Y.2011-12) ITO, WARD-1(4), R. NO. 11, 6 ST FLOOR, B WING, WAGALE INDUSTRIAL ESTATE, THANE (W) - 400604 ...... ) / APPELLANT VS. M/S J.M.C. EQUIPMENTS & CO. PLOT NO. B-26, ROAD NO.22, OPP. SBI, WAGLE INDUSTRIAL ESTATE, THANE (W),-400604. PAN: AACFJ5525F ..... *,/ RESPONDENT ) -/ APPELLANT BY : SHRI SUSHIL KUMAR MISHRA *, -/ RESPONDENT BY : NONE . / DATE OF HEARING : 30/03/2021 . / DATE OF PRONOUNCEMENT : 28/05/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE [HEREINAFTER REFER RED TO AS THE CIT(A)] DATED 06.06.2019 FOR THE ASSESSMENT YEAR (AY) 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM TH E RECORDS ARE: THE ASSESSMENT IN THE CASE OF ASSESSEE FOR THE AY 2011- 12 WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTME NT, GOVERNMENT OF 2 . 5637 //2019 (. .2011-12 ) ITA NO.5637/MUM/2019 (A.Y.2011-12) MAHARASHTRA THAT THE ASSESSEE HAS OBTAINED BOGUS PU RCHASE BILLS AMOUNTING TO RS. 2,39,117/- FROM TWO HAWAL OPERATORS I.E. (1) SHRI RAJ TILAK TRADING COMPANY RS. 2,25,576/- (2) REHBAR ENTERPRISES RS. 13,541/- 3. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FAIL ED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE PURCHASES AND THE DEALER S. THE NOTICES SENT TO THE DEALERS UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WERE RETURNED BACK UNSERVED BY THE PO STAL AUTHORITIES WITH REMARKS NOT KNOWN. NO CONFIRMATIONS WERE EITHER FILED BY THE ASSESSEE FROM THE DEALERS. FURTHER, THE ASSESSEE COULD NOT FURNISH NE CESSARY DOCUMENTS VIZ. TRANSPORT RECEIPTS, INWARD REGISTER ETC. TO PROVE T RAIL OF GOODS. THE ASSESSING OFFICER (AO) MADE ADDITION OF ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 07.03.2014 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS, RESTR ICTED THE ADDITION TO 12.5% OF THE BOGUS PURCHASES. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A) TO THE ASSESSEE. 4. SHRI SUSHIL KUAMR MISHRA REPRESENTING THE DEPART MENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERS ING THE FINDINGS OF CIT(A). THE LD. DR SUBMITTED THAT THE ASSESSEE COULD NOT PR OVE GENUINENESS OF THE PURCHASES AND THE DEALERS, THEREFORE, ENTIRE BOGUS PURCHASES WERE ADDED BY THE AO. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACE D RELIANCE ON THE DECISION 3 . 5637 //2019 (. .2011-12 ) ITA NO.5637/MUM/2019 (A.Y.2011-12) RENDERED IN THE CASE OF N.K. PROTEINS IN TAX APPEAL NO. 242 OF 2003 DECIDED ON 20.06.2016. 5. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. THE ASSESSEE IS IN THE BUSINESS OF ENGINEERING AND FABRICATION, THE ASSESSEE ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS AMOUNTING T O RS. 2,39,117/- FROM DEALERS DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPAR TMENT, GOVERNMENT OF MAHARASHTRA. UNDISPUTEDLY, THE AO ACCEPTED THE SALE S TURNOVER DECLARED BY THE ASSESSEE. WITHOUT PURCHASES/INPUTS THERE CANNOT BE SALES, THEREFORE, THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES THAT HAS TO BE BROUGHT TO TAX (RE : PCIT V/S PARAMSHAKTI DISTRIBUTORS PVT. LTD., ITA NO. 413/2017 DECIDED ON 15.07.2019). THUS, THE AO ERRED IN MAKING ADDITION OF ENTIRE ALLEGED BOGUS PU RCHASES. THE CIT(A) ESTIMATED GROSS PROFIT (GP) @ 12.5% ON BOGUS PURCHASES AND RE STRICTED THE ADDITION TO RS. 29,890/-. I FIND NO INFIRMITY IN THE IMPUGNED ORDER , THE SAME IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 28 TH DAY OF MAY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 28/05/2021 SK, PS 4 . 5637 //2019 (. .2011-12 ) ITA NO.5637/MUM/2019 (A.Y.2011-12) * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI