ITO - 32(3)(4), MUMBAI V. SURFACE ROAD CONSTRUCTIONS , MUMBAI

ITA 5821/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3556 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHILD DR
• Assessee Lawyers: KAMLESH N DOSHI LD
• Keywords: Bogus purchase

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.5821/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) I TO - 32 ( 3 )( 4 ) ROOM NO.735, 7 TH FLOOR KAUTILYA BHAWAN, BKC BANDRA(E), MUMBAI - 400051 / VS. SURFACE ROAD CONSTRUCTIONS D-30/004, YOGI VAIBHAV SOCIETY YOGI NAGAR, BORIVALI(W) MUMBAI 400 091 ./ ./ PAN/GIR NO. AAWFS-7410-A ( + / APPELLANT ) : ( ./+ / RESPONDENT ) + 0/ APPELLANT BY : SHRI SANJAY SETHI-LD.DR ./+ 0 / RESPONDENT BY : SHRI KAMLESH N.DOSHI - LD. AR / DATE OF HEARING : 0 9 /06/2021 / DATE OF PRONOUNCEMENT : 09 /06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 2010- 11 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-46, MUMBAI [IN SHORT CIT(A) ] DATED 17/05/2019 WHICH HA S PROVIDED CERTAIN RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. HAVING HEARD RIVAL SUBMISSIONS AND AFTER GOING T HROUGH MATERIAL ON RECORD, OUR ADJUDICATION TO THE APPEAL WOULD BE AS UNDER. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN MANUFACTURING OF BITUMEN ITEMS / READ Y MIX CONCRETE WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3 ) R.W.S. 147 ON 13/01/2016. THE ORIGINAL RETURN FILED BY ASSESSEE W AS PROCESSED U/S 143(1). HOWEVER, PURSUANT TO RECEIPT OF CERTAIN INF ORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT, MUMBAI, IT TRANSPIRED THAT THE ASSESSEE PROCURED ACCOMMODATION PURCHASES BILLS OF RS.118.88 LACS FRO M GIVE ENTITIES AS DETAILED IN THE ASSESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRE D TO FILE REQUISITE DETAILS TO SUBSTANTIATE THESE PURCHASES. 3.2 IN SUPPORT OF PURCHASES, THE ASSESSEE FURNISHED CERTAIN DOCUMENTS, HOWEVER, FINDING THAT THE ASSESSEE COULD NOT SUBSTA NTIATE THE PURCHASES, LD. AO ESTIMATED AN ADDITION OF 14% AGAINST THESE P URCHASES WHICH WAS SAME AS MADE IN DURING AY 2009-10. 4. THE LD. CIT(A), INTER-ALIA RELYING UPON THE DECI SION OF HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH (38 TAXMANN.COM 385), RESTRICTED THE ADDITIONS TO 8% WHICH WAS NOTHING BUT APPLICABL E VAT RATE PLUS 4% ESTIMATE MARGIN. AGGRIEVED, THE REVENUE IS IN FURTH ER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT ASSESSEES SALES TURNOVER WAS NOT IN DOUBT AND THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS. THE PAYMENT TO THE SUPPLIERS WAS THROUGH BANKING CHANNE LS. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES 3 NATURE OF BUSINESS. THE FACTS OF THE CASE MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANSACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMISSIONS AS WELL AS CONSIDERING APPLICABLE VAT RATES, ESTIMATED THE ADDITIONS @ 8% WHICH IS MORE THAN ENOUGH TO TAKE CARE OF THE LEAKAGE OF REVENUE. THEREFORE, THE ESTI MATION COULD NOT BE TERMED AS UNJUSTIFIED, IN ANY MANNER. FINDING NO RE ASON TO INTERFERE IN THE IMPUGNED ORDER, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 09 TH JUNE, 2021. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) LM / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; M DATED : 09/06/2021 SR.PS, JAISY VARGHESE 01234514 / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ./+ / THE RESPONDENT 3. O ( ) / THE CIT(A) 4. O / CIT CONCERNED 5. M PQ .MCMMR , MR , / DR, ITAT, MUMBAI 6. QSTU / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.