JCIT (OSD) CIRCLE- 10(2)(2), MUMBAI V. M/S ME INFRA PROJECTS PVT LTD., MUMBAI

ITA 585/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6162 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 24-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 147

Judgement Text

3 ITA 585/MUM/2020 & ITA 622/MUM/2020 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) I.T.A. NO.585/MUM/2020 - ASSESSMENT YEAR 2009-10 I.T.A. NO.622/MUM/2020 - ASSESSMENT YEAR 2012-13 JCIT (OSD) HOLDING CHARGE OF CIRCLE-10(2)(2), MUMBAI VS M/S ME INFRA PROJECTS PVT LTD 404, MAN EXCELLENZA, OPP. PAWAN HANS, S.V. ROAD, VILE PARLE (WEST) MUMBAI-400 056 PAN : AAFCM5012N APPELLANT RESPONDENT APPELLANT BY SHRI BHARAT ANDHALE, DR RESPONDENT BY SHRI RAHUL HAKANI, AR DATE OF HEARING 01-09-2021 DATE OF PRONOUNCEMENT 14-09-2021 O R D E R PER : SAKTIJIT DEY (JM) CAPTIONED APPEALS BY THE REVENUE ARISE OUT OF TWO S EPARATE ORDERS, BOTH DATED 20-11-2019, OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-17, MUMBAI FOR THE ASSESSMENT YEARS 2009-10 AND 2012-13. 2. THE COMMON DISPUTE ARISING IN THESE APPEALS RELA TES TO PART DELETION OF ADDITION MADE ON ACCOUNT OF ALLEGED NON GENUINE PUR CHASES. 3 ITA 585/MUM/2020 & ITA 622/MUM/2020 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, A RESIDENT COMPANY, IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR AND MANUFACTURER OF RM C. FOR THE IMPUGNED ASSESSMENT YEARS ASSESSEE HAD FILED ITS RETURNS OF INCOME IN REGULAR COURSE AND ASSESSMENTS WERE ALSO COMPLETED UNDER SECTION 143(3 ) OF THE ACT WITH ENHANCEMENT OF THE DECLARED INCOME TO SOME EXTENT. AFTER COMPLETION OF THE ASSESSMENTS AS AFORESAID, THE ASSESSING OFFICER REO PENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT FOR ASSESSMENT YEAR 2009-10 AND AN ORDER WAS PASSED UNDER SECTION 143(3) R.W.S.147 OF THE ACT ON 16-02- 2015 FURTHER ENHANCING THE INCOME OF THE ASSESSEE ON ACCOUNT OF ALLEGED NON GE NUINE PURCHASES. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORM ATION FROM THE SALES-TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THROUGH DGIT (INV), MUMBAI THAT IN THE ASSESSMENT YEARS UNDER DISPUTE, THE ASSESSEE IS A B ENEFICIARY OF BOGUS PURCHASE BILLS ISSUED BY ENTITIES IDENTIFIED AS HAWALA OPERA TORS. THEREFORE, HE CALLED UPON THE ASSESSEE TO EXPLAIN THE GENUINENESS OF SUCH PUR CHASES. THOUGH, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCES TO ESTABLISH T HE GENUINENESS OF THE PURCHASES; HOWEVER, THE ASSESSING OFFICER WAS NOT C ONVINCED AND ULTIMATELY TREATED PURCHASES OF RS.38,95,315/- AND RS.2,05,989 /- IN ASSESSMENT YEARS 2009- 10 AND 2012-13, RESPECTIVELY. ADDITIONALLY, HE ADDE D BACK AN AMOUNT OF RS.9,738/- AND RS.516/- IN THE RESPECTIVE ASSESSMEN T YEARS TOWARDS ALLEGED COMMISSION PAID FOR ARRANGING THE BOGUS PURCHASE BI LLS. CONTESTING THE ADDITIONS MADE, ASSESSEE FILED APPEALS BEFORE LEARNED COMMISS IONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER (APPEALS) RESTRICTE D THE ADDITION TO 12.5% OF THE ALLEGED NON GENUINE PURCHASES. BEING OF THE VIEW TH AT SUCH DISALLOWANCE TAKES 3 ITA 585/MUM/2020 & ITA 622/MUM/2020 CARE OF ALL OTHER RELATED DISALLOWANCES/ADDITIONS, HE DELETED THE ADDITION MADE ON ACCOUNT OF ALLEGED COMMISSION PAID. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, BASED ON IN FORMATION RECEIVED FROM SALES-TAX AUTHORITIES THAT CERTAIN ENTITIES FROM WH OM THE ASSESSEE CLAIMED TO HAVE PURCHASED GOODS ARE HAWALA OPERATORS, THE ASSE SSING OFFICER DISALLOWED THE ENTIRE PURCHASES. HOWEVER, THE ASSESSING OFFICER HA S NOT DOUBTED THE SALES EFFECTED BY THE ASSESSEE. THAT BEING THE CASE, IT W OULD BE LOGICAL TO CONCLUDE THAT IN ABSENCE OF THE PURCHASED GOODS, THE ASSESSEE COU LD NOT HAVE EFFECTED THE CORRESPONDING SALES. IN THE AFORESAID SCENARIO, ONE CAN PRESUME THAT THE ASSESSEE MUST HAVE PURCHASED THE GOODS FROM UNVERIFIED SOURC ES BY SUPPRESSING A PART OF ITS PROFIT ELEMENT. THEREFORE, IN SUCH CIRCUMSTANCE S, ONLY THE PROFIT ELEMENT EMBEDDED IN THE ALLEGED NON GENUINE PURCHASES CAN B E CONSIDERED FOR DISALLOWANCE. LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) HAS EXACTLY DONE THAT. FURTHER, THE PROFIT RATE OF 12.5% APPLIED BY LEARNED COMMISSIONER (APPEALS), IN OUR VIEW, IS REASONABLE. THEREFORE, WE DO NOT FI ND ANY INFIRMITY IN THE DECISION OF LEARNED COMMISSIONER (APPEALS). ACCORDINGLY, GRO UNDS ARE DISMISSED. 5. IN THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCED ON 14/09/2021. (RAJESH KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 14/09/2021 PAVANAN 3 ITA 585/MUM/2020 & ITA 622/MUM/2020 COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI