RAJESH M KHANDAR (HUF), MUMBAI V. ITO-26(2)(5), MUMBAI, MUMBAI

ITA 5911/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3845 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 16-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5911 / / 2019 (%. 2009-10 ) ITA NO.5911/MUM/2019(A.Y 2009-10) RAJESH M KHANDAR (HUF), 108/9, SION DEVI NIWAS HOUSING SOCIETY, NEX TO SIES COLLEGE, SION(W), MUMBAI 400 022 PAN: AAHHR-7993-G ...... ' / APPELLANT % VS. INCOME TAX OFFICER 26(2)(5), ROOM NO.319, 3 RD FLOOR, KAUTILYA BHAWAN, BKC, BANDRA (E), MUMBAI 400 051 ..... ()/ RESPONDENT '*/ APPELLANT BY : MS. NEHA PARANJPE ()*/ RESPONDENT BY : SHRI SANJAY J. SETHI %+) / DATE OF HEARING : 19/07/2021 ,-. +) / DATE OF PRONOUNCEMENT : 04/10/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -38, MUMBAI [IN SHORT THE CIT(A)] DATED 28/02/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. MS. NEHA PARANJPE APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THATTHE ASSESSEE IS ENGAGED IN TRADING OF PHOTOCOPIERS AND ITS PARTS, TONER, ETC. THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF ASSESSEE WAS REOPENED ON THE GROUND THAT THE ASSESSEE HAS OBTAINED BOGUS PUR CHASE BILLS AGGREGATING TO RS.2,54,22,355/- FROM VARIOUS DEALERS, DECLARED AS HAWALA OPERATORS. TO PROVE 2 ITA NO.5911/MUM/2019(A.Y 2009-10) GENUINENESS OF PURCHASES THE ASSESSEE SUBMITTED CO PIES OF PURCHASE BILLS, BANK STATEMENTS INDICATING PAYMENTS MADE TO THE VENDORS THROUGH BANKING CHANNEL, COPIES OF THE LEDGER ACCOUNTS AND COPIES OF CORRE SPONDING SALES BILLS. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED THAT ONE OF THE VENDOR I.E. M/S. NAVPAD EXPORTS PVT. LTD. FROM WHOM IT HAS BEEN ALLEGED THAT THE ASSESSEE HAD MADE PURCHASES TO THE TUNE OF RS.2,25,43,928/- , THE ASSESSING OFFICER WRONGLY RECORDED THE SALES TRANSACTION AMOUNT. IN FACT DUR ING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAD MADE PURCHASES ONLY TO THE TUNE OF RS.40,19,028/- FROM THE SAID DEALER. THIS FACT WAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER, HOWEVER, THE ASSESSING OFFICER ON THE BASI S OF TIN HAS RECORDED THAT THE TRANSACTIONS WITH THE AFORESAID VENDOR WORKS OUT TO RS.2,25,43,928/-. THE ASSESSING OFFICER MADE ADDITION OF RS.31,77,794/- IN RESPECT OF BOGUS PURCHASES BY ESTIMATING SUPPRESSED PROFIT MARGIN @ 12.5%. AGGRIEVED BY THE ASSESSMENT ORDER DATED 20/03/201 5, THE ASSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) WITHOUT APPRECIAT ING THE FACTS AND SUBMISSIONS OF THE ASSESSEE, CONFIRMED ADDITION AS MADE BY THE ASSESSING OFFICER. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FURNISHED NECESSARY DOCUMENTS TO DISCHARGE ITS ONUS IN PROVIN G GENUINENESS OF PURCHASES, THEREFORE, THE ENTIRE ADDITION ON ACCOUNT OF BOGUS PURCHASES SHOULD BE DELETED. WITHOUT PREJUDICE TO THE PRIMARY CONTENTION TO DELE TE THE ENTIRE ADDITION THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT G.P DECLARED BY THE ASSESSEE DURING RELEVANT PERIOD IS 3.48%, ESTIMA TION BY ASSESSING OFFICER / CIT(A) AT 12.5% IS VERY MUCH ON THE HIGHER SIDE, THEREFORE, T HE SAME BE REDUCED SUITABLY. 3. PER CONTRA, SHRI SANJAY J. SETHI REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL BY THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS IN PROVING AUTHENTICITY OF THE D EALERS AND THE PURCHASES MADE 3 ITA NO.5911/MUM/2019(A.Y 2009-10) FROM SAID DEALERS. THE ASSESSING OFFICER IN A VERY FAIR AND REASONABLE MANNER HAS ESTIMATED SUPPRESSED PROFIT MARGIN ON BOGUS PURCHAS ES AT 12.5%, THEREFORE, THE SAME SHOULD BE RETAINED. IN RESPECT OF TRANSACTION S WITH M/S. NAVPAD EXPORTS PVT. LTD. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED DOCUMENTS ON RECORD AND THEREAFTER, HAS C AME TO THE CONCLUSION THAT THE AMOUNT OF BOGUS PURCHASES MADE BY THE ASSESSEE DURI NG THE RELEVANT PERIOD FROM THE SAID DEALER HAS BEEN CORRECTLY RECORDED. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED V ARIOUS DOCUMENTS TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF DEALERS AND PURC HASES MADE FROM THEM. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH DOCUMEN TS TO SHOW TRAIL OF GOODS VIZ. OCTROI RECEIPTS, STOCK INWARD REGISTER, TRANSPORT R ECEIPTS, ETC. THE PURPORTED CONFIRMATIONS BY THE ASSESSEE WHICH ARE PART OF PAP ER BOOK DOES NOT BEAR THE SIGNATURES/SEAL OF THE DEALERS. THEREFORE, THE ASS ESSEE COULD NOT CONCLUSIVELY PROVE GENUINENESS OF PURCHASES. AT THE SAME TIME IT IS O BSERVED THAT THE SALES TURNOVER DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE A SSESSEE. IT IS THE SUPPRESSED PROFIT MARGIN EMBEDDED IN SUCH LIKE TRANSACTIONS TH AT CAN ONLY TO BROUGHT TO TAX. ESTIMATION OF SUPPRESSED PROFIT MARGIN @ 12.50 BY THE LOWER AUTHORITIES IN MY CONSIDERED VIEW IS ON HIGHER SIDE. THE ASSESSEE HA S DECLARED G.P OF 3.48% ON REGULAR TRANSACTIONS. ESTIMATION OF SUPPRESSED PROFIT MARG IN ON UNPROVED PURCHASES AT 5% WOULD MEET THE ENDS OF JUSTICE. I HOLD AND DIRECT ACCORDINGLY. 5. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE HAS POINTED THAT PURCHASES FROM M/S. NAVPAD EXPORTS PVT. LTD. HAS BEEN WRONGLY RECORDED AT RS.2,25,43,928/- INSTEAD OF RS.40,19,028/-. THIS IS A FACTUAL ISSUE THAT REQUIRES EXAMINATION OF DOCUMENTS. THIS ISSUE IS RESTORED TO THE FILE OF A SSESSING OFFICER FOR THE LIMITED PURPOSE TO EXAMINE THE DOCUMENTS FURNISHED BY THE ASSESSEE IN SUPPORT OF ITS 4 ITA NO.5911/MUM/2019(A.Y 2009-10) CLAIM. THE ASSESSING OFFICER SHALL GRANT REASONABL E OPPORTUNITY TO THE ASSESSEE TO FURNISH AND EXPLAIN THE RELEVANT DOCUMENTS IN SUPPO RT OF HIS CONTENTIONS. 6. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE 4TH DAY OF OCTOBER, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 04/10/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI