ITO 32 (3)(1), MUMBAI V. RAMREKHA SHUKLA, MUMBAI

ITA 6257/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3188 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHILD
• Assessee Lawyers: MAHESH SABOOLD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 143(2); 148

Judgement Text

ITA NO.6257/MUM/2018 SJRI RAMREKHA SHUKLA ASSESSMENT YEAR :2010-11 1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6257/MUM/2018 ( / ASSESSMENT YEAR: 2010-11 ) INCOME TAX OFFICER - 32(3)(1) ROOM NO.107, C-11, PRATYAKSHKAR BHAVAN BKC BANDRA (E) MUMBAI-400 051. / VS. SHRI RAMREKHA SHUKL A 7/204, RIDHI CHS LTD. SAI BABA NAGAR, BORIVALI (W) MUMBAI-400 092. ! ./ ./PAN/GIR NO. AAUPS-0630-A ( !# /APPELLANT ) : ( $!# / RESPONDENT ) REVENUE BY : SHRI R. BHOOPATHI LD. DR ASSESSEE BY : SHRI MAHESH SABOO-LD.AR / DATE OF HEARING : 02/12/2019 / DATE OF PRONOUNCEMENT : 02/12/2019 / 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 L D. COMMISSIONER OF INCOME-TAX (APPEALS)-45, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)] APPEAL NO. CIT(A)-45/ITO-32(3)(1)/ITA-74/2017-18 DA TED 19/07/2018. IT ITA NO.6257/MUM/2018 SJRI RAMREKHA SHUKLA ASSESSMENT YEAR :2010-11 2 IS EVIDENT FROM GROUNDS OF APPEAL THAT THE SOLE ISS UE THAT ARISES FOR OUR CONSIDERATION IS ADDITION ON ACCOUNT OF ALLEGED BOG US PURCHASES. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS, P ERUSED RELEVANT MATERIAL ON RECORD AND DELIBERATED ON ARGUMENTS ADV ANCED BEFORE US. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF METAL S, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 31/06/2016 WH EREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.11.28 LACS AFT ER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.9.27 LACS AS AGAINST RETURNED INCOME OF RS.2.00 LACS FILED BY THE ASSESSEE ON 30/09/2010 WH ICH WAS PROCESSED U/S.143(1). 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), MUMBAI, IT TRANSPIRED THAT THE ASSESSEE OBTAINED BO GUS PURCHASES BILLS AGGREGATING TO RS.74.23 LACS FROM 8 ENTITIES, THE D ETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN PARA-2 OF THE QUANTUM ASS ESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCE SS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 03/11/2015 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) & 142(1) WHEREIN THE A SSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 3.3 THE ASSESSEE DEFENDED THE PURCHASES BY FILING C OPIES OF PURCHASE BILLS, STOCK REGISTER, BANK STATEMENTS EVIDENCING P AYMENTS THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U/S 133(6 ) TO ALL THE SUPPLIERS, TO CONFIRM THE TRANSACTIONS, WERE RETURN ED UNSERVED BY POSTAL AUTHORITIES. THEREFORE, AFTER CONSIDERING THE FACTU AL MATRIX, THE BOOKS OF ACCOUNTS WERE REJECTED U/S 145(3) AND AN ADDITION W ERE MADE IN THE ITA NO.6257/MUM/2018 SJRI RAMREKHA SHUKLA ASSESSMENT YEAR :2010-11 3 HANDS OF THE ASSESSEE TO THE EXTENT OF 12.5% OF ALL EGED BOGUS PURCHASES. 4. UPON FURTHER APPEAL, LEARNED FIRST APPELLATE AUT HORITY, FINDING THE ESTIMATION OF 12.5% TO BE ON THE HIGHER SIDE, REDUC ED THE ESTIMATION TO 5%. AGGRIEVED, THE REVENUE IS UNDER FURTHER APPEAL BEFORE US. 5. AFTER CAREFUL CONSIDERATION, WE ARE OF THE CONSI DERED OPINION THAT THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF M ATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS I.E. TRADING . UNDISPUTEDLY THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCU MENTS AND THE PAYMENTS TO THE SAID SUPPLIER WERE THROUGH BANKING CHANNELS. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE DELIVERY OF MATERIAL AND ALSO FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS. THE ONUS CASTED UPON ASSE SSEE, IN THIS REGARD, REMAINED UNDISCHARGED. THEREFORE, THE SAID FACTUAL MATRIX WAS A FIT CASE FOR ESTIMATION OF INCOME AGAINST SUSPICIOUS PURCHAS ES MADE BY THE ASSESSEE. KEEPING IN VIEW THE FACT THAT THE ASSESSE E WAS DEALING IN LOW MARGIN ITEM LIKE METAL, THE ESTIMATION OF 5% AS MAD E BY LD. CIT(A) COULD NOT BE SAID TO BE UNREASONABLE FROM ANY ANGLE . THEREFORE, BY CONFIRMING THE SAME, WE DISMISS THE APPEAL. 6. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND DECEMBER, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/12/2019 SR.PS, JAISY VARGHESE ITA NO.6257/MUM/2018 SJRI RAMREKHA SHUKLA ASSESSMENT YEAR :2010-11 4 6789:6 9 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. E ( ) / THE CIT(A) 4. E / CIT CONCERNED 5. FG ; H , H , / DR, ITAT, MUMBAI 6. GIJ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.