DEPUTY COMMISSIONER OF INCOME TAX 15(1)(1), MUMBAI V. EXCELLHONE MFG. (INDIA) PRIVATE LIMITED, MUMBAI

ITA 6023/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9797 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 26-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 6023 / MUM/20 1 7 ( ASSESSMENT YEAR : 2010 - 11 ) THE DY. CIT 15(1)(1), ROOM NO.470, 4 TH FLOOR AAYAKAR BHAVAN MUMBAI VS. M/S. EXCELHONE MFG. (I) PVT. LTD., R - 606, ITC INDUSTRIAL AREA MIDC, THANE BELAPUR ROAD RABALE, NAVI MUMBAI 400 701 PAN/GIR NO. AABCA4747K ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY SHRI D.G. PANSARI ASSESSEE BY NONE DATE OF HEARING 04 / 12 /201 8 DATE OF PRONOUNCEMENT 10 / 12 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDER OF CIT(A) - 24, MUMBAI DATED 16/06/2017 FOR A.Y.2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT, 1961. 2. NOBODY APPEARED ON BEHALF OF ASSESSEE INSPITE OF GIVING OPPORTUNITY. THE BENCH, THEREFORE DECIDED TO DISPOSE THE APPEAL AFTER CONSIDERING THE CONTENTION OF LEARNED DR AND THE MATERIAL PLACED ON RECORD. ITA NO. 6023/MUM/2017 M/S. EXCELLHOME MFG. (I) PVT. LTD., 2 3. FROM THE RECORD W E FOUND THAT T HE ASSESSEE IS A COMPANY E NGAGED IN THE BUSINESS OF MANUFACTURING HONED TUBES & RECONDITIONING OF HYDRAULIC CYLINDER TUBES ETC. THE RETURN OF INCOME FOR THE YEAR UNDER APPEAL WAS E - FILED ON 23.09.2010 DECLARING TOTAL INCOME OF RS.69,88,962/ - . 4. O N THE BASIS OF INFORMATION FROM SA LES TAX DEPARTMENT, AO MADE ADDITION OF RS.1,85,04,502/ - IN RESPECT OF BOGUS PURCHASES MADE BY THE ASSESSEE DURING THE YEAR. ASSESSMENT U/S. 143(3) R.W.S 147 OF THE ACT WAS COMPLETED BY THE LD. AO DETERMINING INCOME AT RS.2,54,93,460/ - . 5 . LD. AO OBSE RVED THAT THE ASSESSEE HAD DEBITED PURCHASES OF RS.1,85,04,502/ - FROM 18 PARTIES WHOSE TIN MATCHED WITH THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT REGARDING BOGUS PARTIES WITH WHOM THE ASSESSEE HAD MADE PURCHASES. ON THE BASIS OF INFORMATION RE CEIVED FROM THE INVESTIGATION WING OF INCOME TAX DEPARTMENT, MUMBAI, IT WAS FOUND THAT THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS TOTAL AMOUNTING TO RS.1,85,04,502/ - FROM 18 PARTIES WHICH WERE STATED TO BE HAWALA OPERATORS. LD. AO, ON GOING THROUGH THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE, CONCLUDED THAT THE ASSESSEE FAILED TO PROVE WITH SUPPORTING DOCUMENTARY EVIDENCES THAT THE MATERIAL WAS ACTUALLY DELIVERED IN ITS PREMISES AND ALSO FAILED TO FILE EVIDENCES OF DELIVERIES TO ESTABLISH THAT THE M ATERIAL WAS CONSUMED FOR BUSINESS ACTIVITIES. ALSO THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION FROM THE PARTY THAT IT HAD ACTUALLY SOLD AND DELIVERED MATERIAL TO THE ASSESSEE COMPANY AND HENCE, THE SUM IN RESPECT OF INVESTMENT MADE OUT OF UNACCOUNTED MONEY BY THE ASSESSEE FOR PURCHASE OF MATERIALS FROM THE PARTIES OF RS.1,85,04,502/ - WAS TREATED AS BOGUS PURCHASES AND ADDED TO THE RETURNED INCOME OF THE ASSESSEE. ITA NO. 6023/MUM/2017 M/S. EXCELLHOME MFG. (I) PVT. LTD., 3 6 . BY THE IMPUGNED ORDER, CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 12.5%. AGAINST T HIS ORDER OF CIT(A), REVENUE IS IN FURTHER APPEAL BEFORE US. 7. LEARNED DR RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF SHORELINE HOTEL (P) LTD., 98 TAXMANN.COM 234 IN SUPPORT OF THE CONTENTION THAT 100% ADDITION IS WARRANTED IN RESPECT O F BOGUS PURCHASES. 8 . WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE CONTENTION OF LEARNED DR AND FOUND THAT AO HAS MADE ADDITION OF ENTIRE AMOUNT OF BOGUS PURCHASES BY DISREGARDING THE FACT THAT CORRESPONDING SALES HAVE NOT B EEN REJECTED BY HIM . WHEN THE CORRESPONDING SALES WERE ACCEPTED THEN CONSIDERING THE PROFIT ELEMENT INVOLVED IN THE PURCHASES MADE FROM OTHER SUPPLIED , THE CIT(A) HAS VERY REASONABLY ESTIMATED PROFIT AT 12.5% OF SUCH BOGUS PURCHASES AND ADDED THE SAME IN A SSESSEES INCOME. WE DO NOT FIND ANYTHING WRONG IN THE ORDER OF CIT(A) FOR RESTRICTING THE ADDITION TO THE EXTENT OF 12.5%. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 / 12 /201 8 SD/ - ( RAM LAL NEGI ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 10 / 12 /201 8 KARUNA SR. PS ITA NO. 6023/MUM/2017 M/S. EXCELLHOME MFG. (I) PVT. LTD., 4 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT . 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//