ITO 27 (1)(5), MUMBAI V. JITENDRA DALICHAND SHAH HUF, MUMBAI

ITA 5661/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0009 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN ADD
• Keywords: Bogus purchase
• Section: 142(1); 143(2); 13; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI PAWAN SINGH (JM) & SHRI S RIFAUR RAHMAN (AM) ITA NO. 5661/MUM/2018(ASSESSMENT YEAR : 2010-11) ITO 27(1)(5), 4 TH FLOOR, ROOM NO. 410, TOWER NO. 6, VASHI RAILWAY STATION, COMPLEX, VASHI, NAVI MUMBAI-400073. VS SHRI JITENDRA DALICHAND SHAH (HUF) 401, NAGESHWAR KRUPA GARDEN LANE, LBS MARG, GHATKOPAR (W), MUMBAI 400 086 PAN : AAAHJ2891F APPELLANT RESPONDEDNT APPELLANT BY SHRI MOHAMMED RIZWAN ADD CIT-DR RE SPONDENT BY SHRI DHARMIL JHAVERI AR DATE OF HEARING 12-12-2019 DATE OF PRONOUNCEMENT 18-12-2019 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LEARNED CIT(A)-25, MUMBAI DATED 05-07-2018 WHICH ARISES FROM ASSESSMEN T ORDER PASSED U/S 14(3) R.W.S. 147 DATED 08-12-2015 FOR ASSESSMENT YE AR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.6,22,737/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASES, WITHOUT APPRECIATING TH E FACT THAT THE ASSESSEE HAD FAILED TO PRODUCE BILLS, VOUCHERS AND OTHER DOCUMEN TARY EVIDENCES IN SUPPORT OF HIS CLAIM AND WITHOUT CONSIDERING THE LATEST APEX C OURT DECISION IN THE CASE OF N.K.PROTEINS LTD. WHEREIN IT IS HELD THAT ONCE IT I S PROVED THAT THE PURCHASES ARE BOGUS THEN ADDITION SHOULD BE MADE ON ENTIRE PU RCHASES AND NOT ON PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ESTIMATING THE PROFIT FROM HAWALA PURCHASES BY D ISALLOWING ONLY 2 ITA 5661/MUM/2018 JITENDRA D SHAH HUF RS.11,07,088/- BEING 8% OF THE BOGUS PURCHASES AS E VEN THE BASIC ONUS OF PRODUCING TRANSPORT BILLS, DELIVERY CHALLANS ETC. W ERE NOT FULFILLED BY THE ASSESSEE. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, HUF AND IS A PROPRIETOR OF NAMELY M/S K.J. ENTERPRISES, DEALING IN IRON & STEEL, FILE D ITS RETURN OF INCOME FOR AY 2010-11 ON 14-09-2010 DECLARING INCOME OF RS.4,9 1,839/-. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM SALES-TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, WHICH REFERR ED THE LIST OF HAWALA DEALERS AND THE BENEFICIARY TO THE DGIT (INVESTIGAT ION), MUMBAI. THE NAME OF ASSESSEE APPEARED IN THE LIST OF BENEFICIAR IES. THE ASSESSEE ALLEGEDLY MADE THE PURCHASES OF RS.1,38,38,601/- FR OM THE FOLLOWING HAWALA DEALERS. ON THE BASIS OF SUCH INFORMATION, T HE AO ISSUED NOTICE U/S 148 ON 19-03-2015. THE ASSESSEE, VIDE LETTER DATED 19-03-2015 STATED THAT THE RETURN FILED ON 143-09-2010 MAY BE TREATED AS R ETURN FILED IN RESPONSE TO NOTICE U/S 148. SUBSEQUENTLY, THE ASSESSING OF FICER ISSUED NOTICES U/S 143(2) AND 142(1) ALONGWITH A QUESTIONNAIRE AND SER VED UPON THE ASSESSEE. DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN PURCHASES FROM THE FOLLOWING PARTIES, WHICH W AS DECLARED AS HAWALA DEALERS BY THE SALE TAX DEPARTMENT, GOVERNMENT OF M AHARASHTRA: NAME OF THE PARTIES BILL AMOUNT (RS.) 1 OM CORPORATION 1,43,270 2 SIDDHIVINAYAK TRADING COMPANY 1,02,742 3 DEEPALI ENTERPRISES 7,46,084 4 NATIONAL TRADING CO 9,12,731 3 ITA 5661/MUM/2018 JITENDRA D SHAH HUF 5 REKHA TRADING CO 5,70,831 6 RENUKA SALES CORPORATION 9,10,018 7 ATLANTIC TRADERS 3,78,114 8 DAKSHA ENTERPRISES 3,09,088 9 BRIGHT CORPORATIN 4,75,774 10 SHREE JALARAM ENTERPRISES 5,21,831 11 AMAR ENTERPRISES 5,22,237 12 MERCURY ENTERPRISES 5,55,989 13 PRAYOSHA TRADING CO 15,50,616 14 ADINATH TRADING COMPANY 10,78,813 15 VAISHALI ENTERPRISES 72,858 16 SAI ENTERPRISES 5,85,250 17 SS ENTERPRISES 6,13,239 18 ZENITH ENTERPRISES 8,25,604 19 HITECH IMPEX 2,31,244 20 SURAJ SALES CORPORATION 8,53,622 21 MATOSHREE TRADERS 6,39,9073 22 MAHAVIR ENTERPRISES 12,824 23 BALAJI TRADING COMPANY 5,74,329 24 SWAYAM INTERNATIONAL 6,51,520 TOTAL 1,38,38,601 3. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE PURCHASE S. THE ASSESSEE FURNISHED VARIOUS DETAILS LIKE BANK STATEMENT, COPY OF BILLS TO SUPPORT THE PURCHASES. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPTED WITH THE DETAILS AND EVIDENCES AS SUFFICIENT WHICH WERE FILE D BY THE ASSESSEE; HE OBSERVED THAT IT IS SETTLED LAW THAT ONUS LIES ON T HE ASSESSEE TO PROVE THE GENUINENESS OF ANY EXPENDITURE WHICH IS CLAIMED AS DEDUCTION IN COMPUTING ITS TAXABLE INCOME AND THAT NO SERIOUS EF FORTS WERE MADE BY THE ASSESSEE TO DISCHARGE SUCH BURDEN OF PROVING THE GE NUINENESS OF TRANSACTIONS WITH THE ABOVE PARTIES. HOWEVER, HE , APPLYING THE RATIO OF DECISION OF ITAT IN THE CASE OF M/S SANKET STEEL TR ADERS VS ITO IN ITA 4 ITA 5661/MUM/2018 JITENDRA D SHAH HUF NO.2801/AHD/2008 DATED 20-05-2011, WHERE THE TRIBUN AL, APPLYING THE RATIO OF DECISION IN THE CASE OF SHRI ANUBHAI SHIVL AL SUSTAINED ADDITION OF 12.5% OF THE NON-GENUINE PURCHASES, ADDED 12.5% ADD ITION OF THE NON- GENUINE PURCHASES. ON APPEAL, THE LD. CIT (A) FOLL OWING THE DECISION OF TRIBUNAL IN ASSESSEES INDIVIDUAL CASE FOR AY 2009- 10 IN ITA NO. 759/MUM/2018, RESTRICTED THE ADDITION TO 8%. AGGRI EVED, THE REVENUE HAS FILED THE PRESENT APPEAL. 4. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED AUTHO RISED REPRESENTATIVE (LD. AR) FOR ASSESSEE AND THE LEARNED DEPARTMENTAL REPRESENTATIVE (LD DR) FOR THE REVENUE AND EXAMINED THE RECORD. THE LD.AR OF THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEES INDIVIDUAL CASE FOR AY 2009-10 IN ITA NO .759/MUM/2018, WHERE THE TRIBUNAL RESTRICTED THE ADDITION TO THE E XTENT OF 8% OF THE ALLEGED BOGUS PURCHASES. 5. PER CONTRA THE LD. DR FOR THE REVENUE SUBMITTED THA T THE ASSESSING OFFICER RELYING UPON THE DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL IN ANUBHAI SHIVLAL MADE THE DISALLOWANCE AT 12.5%. HOWEVER, T HE LD DR SUBMITS THAT IN SIMILAR CASE OF ASSESSEES INDIVIDUAL CASE THE T RIBUNAL RESTRICTED THE ADDITIONS OF BOGUS PURCHASES TO THE EXTENT OF 8% OF THE SIMILAR PURCHASES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL PLACED BEFORE US. WE FIND THAT THE ASSESSING OFFICER, BY FOLLOWING THE DECISION OF 5 ITA 5661/MUM/2018 JITENDRA D SHAH HUF AHMEDABAD BENCH OF THE TRIBUNAL IN ANUBHAI SHIVLAL MADE THE ADDITION AT 12.5% OF THE NON GENUINE PURCHASES. HOWEVER, ON AP PEAL THE LD.CIT(A), BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESS EES INDIVIDUAL CASE FOR AY 2009-10 HAS RESTRICTED THE ADDITION TO 8% OF THE NON GENUINE PURCHASES. SINCE THE LD. CIT(A) HAS FOLLOWED THE D ECISION OF THE TRIBUNAL IN ASSESSEES INDIVIDUAL CASE FOR AY 2009-10 RESTRI CTED THE ADDITION TO 8% OF THE NON GENUINE PURCHASES. NO CONTRARY FACT OR LAW IS BROUGHT TO OUR NOTICE TO TAKE OTHER VIEW, THUS, WE DO FIND ANY INF IRMITY IN THE ORDER OF THE LD. CIT(A). THEREFORE, WE UPHOLD THE ORDER OF LD. CIT(A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-12-2019. SD/- SD/- (S RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 18 TH DECEMBER, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI