ACIT-32(1), MUMBAI V. SHRI GOVINDRAM H DEPRA, MUMBAI

ITA 6164/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0457 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH RAJHANSLD
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

1 ITA NO. 6164/MUM/2018 AY 2010-11 SHRI GOVINDRAM H. DUPRA - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6164/MUM/2018 ( / ASSESSMENT YEAR:2010-11 ) A CIT - 32(1) ROOM NO.209, 2 ND FLOOR C-11, PRATYAKSHKAR BHAVAN BKC, BANDRA EAST MUMBAI-400 051. / VS. SH RI GOVINDRAM H. DEPRA GALA NO.1, H.T. DESAI COMP. S.P. ROAD, DAHISAR EAST MUMBAI-400 068. !'#$ ./ ./PAN/GIR NO. ADSPD-2752-K ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) REVENUE BY : SHRI ASHUTOSH RAJHANS-LD.DR ASSESSEE BY : NONE / DATE OF HEARING : 12/09/2019 / DATE OF PRONOUNCEMENT : 12/09/2019 / O R D E R PER BENCH: - 1. AFORESAID APPEAL BY REVENUE FOR AY 2010-11 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-45, MUMBAI, [I N SHORT REFERRED TO AS 2 ITA NO. 6164/MUM/2018 AY 2010-11 SHRI GOVINDRAM H. DUPRA CIT(A)], APPEAL NO. CIT(A)-45/ACIT-32(1)/ITA-13/2017-18 D ATED 18/07/2018 ON FOLLOWING GROUNDS OF APPEAL: - (1) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION TO RS.2,09,437/- @ 12.5% O F RS.16,75,498/- ON ACCOUNT OF BOGUS PURCHASES, WITHOUT APPRECIATING THE FACT THAT THE S ALES TAX DEPARTMENT HAS PROVED BEYOND DOUBT THAT THE PARTIES DECLARED AS HAWALA TRADERS W ERE INVOLVED IN PROVIDING ACCOMMODATION ENTRY OF PURCHASES AND THE ASSESSEE WAS ONE OF THE BENEFICIARY OF ACCEPTING ACCOMMODATION OR THE PURCHASE.' (2) ' ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO P ROVIDE THE COPY OF BILLS FROM THE 6 PARTIES AND NEITHER COULD PRODUCE THEM FOR VERIFICATION, IN SPI TE OF OPPORTUNITY PROVIDED BY THE AO.' (3) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE RATIO OF THE DECISION OF GUJARAT H IGH COURT IN THE CASE OF N.K. PROTEINS LTD. WHEREIN IT WAS CONFIRMED THAT IN THE EVENT OF BOGUS PURCHASES, THE ADDITION ON THE WHOLE OF SUCH PURCHASES WAS REQUIRED TO BE MADE AND THIS PAR TICULAR RATIO WAS CONFIRMED BY HON'BLE SUPREME COURT IN SLP NO. CC NO.769 OF 2017 DATED 16 .01.2017, BY DISMISSING THE SLP OF THAT ASSESSEE.' (4) 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT( A) ON THE ABOVE GROUNDS BE SET SIDE AND THAT OF THE AO BE RESTORED.' NONE HAS APPEARED FOR ASSESSEE AND THEREFORE, THE M ATTER IS PROCEEDED WITH EX-PARTE QUA THE ASSESSEE. 2.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN LABOUR JOB WORK UNDER PROPRIETORSHIP CONCERN NAMELY M/S BHAGWATI INTERIORS, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) ON 15/03/2013 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.42.18 LACS AFTER ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.16.75 LACS AS AGAINST RETURNED INCOME OF RS.25.4 3 LACS E-FILED BY THE ASSESSEE ON 29/09/2010. 2.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE MADE PURCHASES AGGREGATING TO RS.16.75 LACS FROM 7 ENTIT IES, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED AT PARA-4.1 OF THE QUAN TUM ASSESSMENT ORDER. THESE ENTITIES WERE LISTED AS SUSPICIOUS DEALERS BY SALES TAX DEPARTMENT, 3 ITA NO. 6164/MUM/2018 AY 2010-11 SHRI GOVINDRAM H. DUPRA GOVT. OF MAHARASHTRA. ACCORDINGLY, THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASES MADE FROM ABOVE ENTITIES . 2.3 THE ASSESSEE DEFENDED THE PURCHASES, INTER-ALIA, BY SUBMITTING THAT THE PAYMENTS WERE THROUGH BANKING CHANNELS. HOWEVER , THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIER FOR CONFIRMAT ION OF THE TRANSACTIONS. HENCE, NOT SATISFIED, THE AFORESAID PURCHASES WERE DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. THE LEARNED CIT(A), AFT ER CONSIDERING THE FACTUAL MATRIX, RESTRICTED THE ADDITIONS TO 12.5% O F THESE PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. IT APPEARS THAT THE ASSESSEE HAS NOT APPEALED ANY FURTHER. 3. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS MAD E BY LD. DR. 4. WE ARE OF THE CONSIDERED OPINION THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASS ESSEES NATURE OF BUSINESS. THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIER WAS THROUGH BANKIN G CHANNELS. THE SALES TURNOVER REFLECTED BY THE ASSESSEE HAS NOT BEEN DIS TURBED / DISPUTED BY LD. AO. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERAB LY FAILED TO SUBSTANTIATE THE PURCHASES AND COULD NOT PRODUCE AN Y OF THE SUPPLIER TO CONFIRM THE TRANSACTIONS. UNDER SUCH CIRCUMSTANCES, THE ADDITIONS WHICH COULD BE SUSTAINED, WAS TO ACCOUNT FOR PROFIT ELEME NT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNE D BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AN D UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LD. FIRST APPEL LATE AUTHORITY HAS RIGHTLY 4 ITA NO. 6164/MUM/2018 AY 2010-11 SHRI GOVINDRAM H. DUPRA DONE. THEREFORE, FINDING NO INFIRMITY IN THE ESTIMA TION MADE BY LD. CIT(A), WE DISMISS THE APPEAL. 5. IN THE RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2019. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 12/09/2019 SR.PS:-JAISY VARGHESE () *) / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. -. $'/ , / , / DR, ITAT, MUMBAI 6. .012 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.