DEPUTY COMMISSIONER OF INCOME TAX 8(2)(1), MUMBAI V. M/S.SINGH HINDUSTAN MARINE PRIVATE LIMITED, MUMBAI

ITA 6002/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9618 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 22-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N PADMANABHANLD
• Assessee Lawyers: SUMEET CHAWLALD
• Keywords: Bogus purchase; Tax effect
• Section: 133(6); 148

Judgement Text

ITA NO.6002/MUM/2018 M/S. SINGH HINDUSTAN MARINE P. LTD. ASSESSMENT YEAR :2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MANOJ KUMAR AGGARWAL, AM AND HONBLE SHRI RAVISH SOOD, JM ./ I.T.A. NO.6002/MUM/2018 ( / ASSESSMENT YEAR: 2010-11) D CIT - 8(2)(1) AAYKAR BHAVAN ROOM NO.624 M.K. ROAD, MUMBAI -400 020. / VS. M/S. SINGH HINDUSTAN MARINE P. LTD. D/13, TTC INDUSTRIAL AREA MIDC TURBE NEW MUMBAI- 400 705. ./ ./PAN/GIR NO. AADCS-8670-G ( /APPELLANT ) : ( ! / RESPONDENT ) ASSESSEE BY : MR. SUMEET CHAWLA-LD. AR REVENUE BY : MR. N. PADMANABHAN-LD. DR / DATE OF HEARING : 08/01/2020 / DATE OF PRONOUNCEMENT : 08/01/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2010-11 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-14, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-14/IT-110/16-17 DATED 15/06/2018 QUA CERTAIN RELIEF PROVIDED TO THE ASSESSEE AGAINST ALLEGED BOGUS PURCHASES. ITA NO.6002/MUM/2018 M/S. SINGH HINDUSTAN MARINE P. LTD. ASSESSMENT YEAR :2010-11 2 2. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE S OUGHT DISMISSAL OF THE APPEAL BY CITING RECENT LOW TAX EFFECT CIRCU LAR NO. 17/2019 DATED 08/08/2019 ISSUED BY CBDT. THE LD. DR CONTROVERTED THE SAME BY SUBMITTING THAT THE REASSESSMENT WAS TRIGGERED PURS UANT TO RECEIPT OF INFORMATION FROM AN EXTERNAL AGENCY I.E. SALES TAX DEPARTMENT AND THEREFORE, THE APPEAL STOOD PROTECTED BY THE EXCEPT ION GIVEN IN THE RELATED CIRCULARS. CONCURRING WITH THE SUBMISSIONS OF LD. DR, THE SAID PLEA WAS REJECTED AND THE MATTER WAS PROCEEDED WITH ON MERITS. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED IN THE BUSI NESS OF SERVICING OF LIFE SAVINGS APPLICATIONS LIKE LIFE-RAFTS, RESCUE-B OATS, FIRE-FIGHTING APPLIANCES ETC. , WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S. 14 3(3) R.W.S. 147 ON 16/03/2016 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.72.16 LACS, AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.6.69 LACS AS AGAINST RETURNED INCO ME OF RS.65.47 LACS FILED BY THE ASSESSEE ON 15/10/2010 WHICH WAS PROCE SSED U/S.143(1). 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA, IT TRANSPIRED THA T THE ASSESSEE OBTAINED BOGUS PURCHASES BILLS AGGREGATING TO RS.26 .78 LACS FROM AS MANY AS 9 ENTITIES, THE DETAILS OF WHICH HAVE ALREA DY BEEN EXTRACTED IN PARA-2 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY , THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 19/02/2015 WHICH WAS FOLLOWED BY STATUTORY NOTICES WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 3.3 THE ASSESSEE DEFENDED THE PURCHASES BY FURNISHI NG COPIES OF PURCHASE INVOICES, BANK STATEMENTS EVIDENCING PAYME NT TO SUPPLIERS ITA NO.6002/MUM/2018 M/S. SINGH HINDUSTAN MARINE P. LTD. ASSESSMENT YEAR :2010-11 3 THROUGH BANKING CHANNELS, LEDGER EXTRACTS ETC. BUT THE ASSESSEE FAILED TO SUBSTANTIATE THE DELIVERY OF MATERIAL. THE SERVICE OF NOTICE ISSUED U/S 133(6) TO ALL THE ENTITIES ESTABLISHED THAT NONE OF THE PARTIES WERE EXISTING AT THE GIVEN ADDRESSES. THE ASSESSEE FAILE D TO PRODUCE ANY OF THE SUPPLIERS DESPITE BEING SPECIFICALLY DIRECTED T O DO SO. CONSEQUENTLY, LD. AO, RELYING UPON THE DECISIONS OF HONBLE GUJAR AT IN CIT V/S BHOLANATH POLY FAB PVT LTD. 355 ITR 290 AND CIT V/S SIMIT P. SHETH 356 ITR 451 ESTIMATED THE ADDITIONS @25% OF THESE PURCHASES WHI CH RESULTED INTO AN ADDITION OF RS.6.69 LACS IN THE HA NDS OF THE ASSESSEE. 4. THE LEARNED CIT(A), AFTER CONSIDERING ASSESSEES SUBMISSIONS INCLUDING NET PROFIT RATE REFLECTED DURING THE YEAR , SCALED DOWN THE ESTIMATION TO 12.5%. AGGRIEVED, THE REVENUE IS UNDE R FURTHER APPEAL BEFORE US. IT APPEARS THAT THE ASSESSEE HAS NOT PRE FERRED ANY FURTHER APPEAL AGAINST THE SAME. 5. AFTER CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS , WE ARE OF THE CONSIDERED OPINION THAT THE STATED SERVICES COULD N OT BE RENDERED WITHOUT PURCHASE OF MATERIAL. THE ASSESSEE WAS IN P OSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIERS WERE THROUGH BANKING CHANNELS. THE ASSESSEE WAS A CORPOR ATE ENTITY AND ITS BOOKS OF ACCOUNTS WERE SUBJECTED TO AUDIT. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE P URCHASES AND FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSAC TIONS. THE FIELD ENQUIRIES REVEALED THAT NONE OF THE SUPPLIERS WAS E XISTING AT THE GIVEN ADDRESSES. THEREFORE, THE PRIMARY ONUS CASTED UPON ASSESSEE, TO PROVE THE TRANSACTIONS, REMAINED UNDISCHARGED. ITA NO.6002/MUM/2018 M/S. SINGH HINDUSTAN MARINE P. LTD. ASSESSMENT YEAR :2010-11 4 6. THE STATED FACTUAL MATRIX, IN OUR CONSIDERED OPI NION, WOULD MAKE IT A FIT CASE TO MAKE ESTIMATED ADDITIONS TO ACCOUNT F OR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZ E FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL I N THE GREY / UNORGANIZED MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DONE SO. FINDING THE ESTIMATION OF 12.5% TO BE QUITE FAIR AN D REASONABLE, WE FIND NO REASON TO INTERFERE IN THE IMPUGNED ORDER. THE S AID ESTIMATION HAS BEEN MADE AFTER DUE CONSIDERATION OF FACTUAL MATRIX AS WELL AS CONSIDERING THE GROSS PROFIT REFLECTED BY THE ASSES SEE DURING THE YEAR AND WOULD NOT REQUIRE ANY INDULGENCE ON OUR PART. 7. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH JANUARY, 2020. SD/- SD/- (RAVISH SOOD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08/01/2020 SR.PS, JAISY VARGHESE '#%&'& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !/ THE RESPONDENT ITA NO.6002/MUM/2018 M/S. SINGH HINDUSTAN MARINE P. LTD. ASSESSMENT YEAR :2010-11 5 3. M ( ) / THE CIT(A) 4. M / CIT CONCERNED 5. VW #X, X, / DR, ITAT, M UMBAI 6. WZ[\ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.