ITO, W-6(3)(1), MUMBAI, MUMBAI V. M/s. IDEEN FURNITURE PVT. LTD. MUMBAI, MUMBAI

ITA 5756/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0321 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5756 //20 19 (. . 2009-10 ) ITA NO.5756/MUM/2019 (A.Y.2009-10) ITO-6(3)(1), ROOM NO. 503, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI-400020. ...... ' / APPELLANT VS. M/S IDEEN FURNITURE PVT. LTD. 5 TH FLOOR, MILITIA APARTMENT M.P. ROAD, MAZGAON, MUMBAI-400010. PAN: AABCI5128F . .... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : SHRI MAHESH SABOO , / DATE OF HEARING : 06/04/2021 , / DATE OF PRONOUNCEMENT : 02/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 15.05.2019 FOR THE ASSESSMENT Y EAR (AY) 2009-10. 2. SHRI MAHESH SABOO APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF INTERIOR DES IGNING. THE ASSESSMENT FOR 2 . 5756 //20 19 (. .2009-10 ) ITA NO.5756/MUM/2019 (A.Y.2009-10) AY 2009-10 IN THE CASE OF ASSESSEE WAS RE-OPENED ON THE GROUND THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTIN G TO RS. 3,59,436/- FROM THREE PARTIES VIZ: 1. SURAJ TIMBER MART RS. 3,44,973/- 2. G.M. ENTERNATIONAL RS. 8,800/- 3. ASIAN STEEL RS. 5,663/- TOTAL RS. 3,59,436/- THE AFORESAID PARTIES WERE STATED TO BE BOGUS ENTRY PROVIDERS AS PER THE LIST PREPARED BY THE SALES TAX DEPARTMENT, GOVERNME NT OF MAHARASHTRA. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISH ED COPIES OF PURCHASE BILLS, BANK DETAILS, ETC. TO SUBSTANTIATE GENUINENE SS OF PURCHASES. HOWEVER, THE ASSESSING OFFICER (AO) DISBELIEVED THE SAME AND MAD E ADDITION OF ENTIRE ALLEGED BOGUS PURCHASES. THE ASSESSEE CARRIED THE I SSUE IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS AND DO CUMENTS ON RECORD RESTRICTED THE ADDITION ON ACCOUNT OF BOGUS PURCHAS ES TO 12.5% OF THE PURCHASES MADE FROM ONLY ONE PARTY I.E. M/S SURAJ T IMBER MART. THE ASSESSEE HAS ACCEPTED THE SAME AND IS NOT IN APPEAL AGAINST THE ADDITION CONFIRMED BY THE CIT(A). 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEHE MENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE GENUINENESS OF THE DEALERS AND THE PUR CHASES MADE FROM THEM. THE LD. DR POINTED THAT THE ASSESSEE HAS FAILED TO FURNISH DOCUMENTS SUCH AS DELIVERY CHALLANS, TRANSPORT RECEIPTS, STOCK REGIST ER ETC. TO PROVE TRAIL OF GOODS. NO QUANTITATIVE DETAILS SUCH AS OPENING STOCK, CONS UMPTION AND CLOSING STOCK 3 . 5756 //20 19 (. .2009-10 ) ITA NO.5756/MUM/2019 (A.Y.2009-10) OF EACH RAW-MATERIAL AND FINISHED GOODS WERE FURNIS HED BY THE ASSESSEE. THE LD. DR STRONGLY SUPPORTING THE ASSESSMENT ORDER PRA YED FOR RESTORING THE FINDINGS OF AO. 4. BOTH SIDES HEARD, ORDERS OF THE AUTHORITIES BELO W EXAMINED. THE SOLITARY ISSUE RAISED BY REVENUE IN APPEAL IS AGAINST RELIEF GRANTED BY THE CIT(A) IN RESPECT OF BOGUS PURCHASES. THE ASSESSEE HAS ALLEGE DLY OBTAINED BOGUS PURCHASE BILLS FROM THREE PARTIES. THE CIT(A) DELET ED ADDITION IN RESPECT OF M/S G.M. INTERNATIONAL RS. 8,800/- AND M/S ASIAN STEEL- RS. 5,663/- AS THE PURCHASES FROM SAID PARTIES PERTAIN TO SUBSEQUENT AY AND WERE NOT RELEVANT TO THE PERIOD AY UNDER APPEAL. AS REGARDS, PURCHASE FROM THIRD DE ALER I.E. M/S SURAJ TIMBAR MART, THE CIT(A) RESTRICTED THE ADDITION TO 12.5%. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE PURCHASES FROM SUSPICIOUS DEALER. SINCE, THE AO ACCEPTED SALES TUR NOVER DECLARED BY THE ASSESSEE, THE ENTIRE ALLEGED BOGUS PURCHASES COULD NOT HAVE BEEN ADDED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIO NS THAT CAN BE BROUGHT TO TAX (RE: PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD . IN INCOME TAX APPEAL NO. 413 OF 2017 DECIDED ON 15.07.2019). THE CIT(A) HAS RESTRICTED THE ADDITION ON ALLEGED BOGUS PURCHASES MADE DURING THE IMPUGNED AY BY ESTIMATING PROFIT MARGIN @ 12.5%. I SEE NO INFIRMITY IN THE IMPUGNED ORDER, THEREFORE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, B EING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 02 ND DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 02/07/2021 4 . 5756 //20 19 (. .2009-10 ) ITA NO.5756/MUM/2019 (A.Y.2009-10) SK, PS ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI