M/S. FACETS, MUMBAI V. ITO 24(1)(3), MUMBAI

ITA 6154/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5447 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 29-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: USHA GAIKWADLD
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

ITA NO.6154/MUM/2018 M/S. FACETS ASSESSMENT YEAR: 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6154/MUM/2018 ( / ASSESSMENT YEAR : 2010-11) M/S. FACETS 502, GULSHAN 2, JUHU LANE, ANDHERI (W) MUMBAI-400 058 / VS. I TO - 24(1)(3) PRATYAKSHKAR BHAVAN BKC, BANDRA (E) MUMBAI-400 051 )* ./ ./PAN/GIR NO. AABFF-5276-C ( *, /APPELLANT ) : ( -.*, / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : MS. USHA GAIKWAD-LD. SR. DR / DATE OF HEARING : 10/05/2021 / DATE OF PRONOUNCEMENT : 10/05/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. IN THIS APPEAL FOR ASSESSMENT YEAR (AY) 2010-11, THE ASSESSEE IS AGGRIEVED BY CERTAIN ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATERIA L ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR P LEADED FOR DISMISSAL OF APPEAL. ITA NO.6154/MUM/2018 M/S. FACETS ASSESSMENT YEAR: 2010-11 2 2.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN TRADING OF DIAMONDS WAS ASSESSED F OR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 30/06/2016. THE ORIGINAL RETURN FILED BY ASSESSEE WAS PROCESSED U/S 143(1). HOWEVER , PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGA TION), MUMBAI, IT TRANSPIRED THAT THE ASSESSEE MADE ALLEGED BOGUS PUR CHASES OF RS.21.09 LACS FROM AN ENTITY NAMELY M/S KRISHNA DIAM. ACCORD INGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FILE REQUISITE DETAIL TO SUBSTANTIATE THE PURCHASES . 2.2 IN SUPPORT OF PURCHASES, THE ASSESSEE FURNISHED PURCHASE REGISTER, SALES REGISTER, STOCK REGISTER, BANK STATEMENT, PUR CHASE BILLS, LEDGER CONFIRMATION ETC. HOWEVER, GOING BY THE FINDINGS OF INVESTIGATION WING THAT THE SUPPLIER BELONGED TO A TAINTED GROUP OF GA UTAM JAIN & ORS. AND VARIOUS CONCERNS OF THIS GROUP WERE NOT CARRYING OU T ANY GENUINE BUSINESS ACTIVITY, THE PURCHASES SO MADE BY THE ASS ESSEE WERE NOT TO BE ACCEPTED AS GENUINE PURCHASES. FINALLY, LD. ESTI MATED GROSS PROFIT ADDITION OF 21.36% AGAINST THESE PURCHASES. 3. UPON FURTHER APPEAL, LD. CIT(A), RELYING UPON TH E DECISION OF HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH (356 ITR 451), ESTIMATED THE ADDITIONS @12.5%. AGGRIEVED, THE ASSE SSEE IS IN FURTHER APPEAL BEFORE US. 4. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE SALES TURNOVER WAS NO T IN DOUBT AND THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCU MENTS. THE PAYMENT TO THE SUPPLIER WAS THROUGH BANKING CHANNEL S. THERE COULD BE ITA NO.6154/MUM/2018 M/S. FACETS ASSESSMENT YEAR: 2010-11 3 NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE FACTS OF THE CAS E MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANS ACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMI SSIONS AS WELL AS MATERIAL ON RECORD, ESTIMATED THE ADDITIONS @ 12.5%. THE SAID ESTIMATION, IN OUR OPINION, COULD NOT BE TERMED AS UNJUSTIFIED, IN ANY MANNER. THEREFORE, FINDING NO REASON TO INTERFERE I N THE IMPUGNED ORDER, WE DISMISS THE APPEAL. 5. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 10 TH MAY, 2021 SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 10/05/2021 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -.*, / THE RESPONDENT 3. 5 ( ) / THE CIT(A) 4. 5 / CIT CONCERNED 5. 67-08 , 8 , / DR, ITAT, MUMBAI 6. 79:; / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.