ITO - 17(1)(1), MUMBAI V. ACE INTERNATIONAL CORPORATION, MUMBAI

ITA 6258/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3189 (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: 2011-2012
• Appeal Filed On: 01-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHILD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 143(2); 148

Judgement Text

ITA NO.6258/MUM/2018 M/S. ACE INTERNATIONAL CORPORATION ASSESSMENT YEAR :2011-12 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.6258/MUM/2018 ( / ASSESSMENT YEAR: 2011-12 ) INCOME TAX OFFICER - 17(1)(1) ROOM NO.115, 1 ST FLOOR AAYKAR BHAVAN MUMBAI. / VS. M/S. ACE INTERNATIONAL CORPORATION 101/C, MITTAL TOWER NARIMAN POINT MUMBAI-400 021. ! ./ ./PAN/GIR NO. AABFA-1975-D ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI R. BHOOPATHI LD. DR / 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] 2011-12 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-55, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)] APPEAL NO. CIT(A)-55/ITO-17(1)(1)/IT-490/17-18 DATED 27/08/201 8. IT IS EVIDENT FROM GROUNDS OF APPEAL THAT THE SOLE ISSUE THAT ARISES F OR OUR CONSIDERATION IS ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES. ITA NO.6258/MUM/2018 M/S. ACE INTERNATIONAL CORPORATION ASSESSMENT YEAR :2011-12 2 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE P ROCEED TO ADJUDICATE THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE, WHO SUPPORTED THE ORDE R OF LD.AO. 3. WE HAVE CAREFULLY HEARD THE SUBMISSIONS, PERUSED RELEVANT MATERIAL ON RECORD AND DELIBERATED ON ARGUMENTS RAI SED BEFORE US. 4.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CHEMICALS, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 29/12/2016 WH EREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.1.76 LACS, INTER-ALIA, AFTER ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.0.66 LACS AS AGAI NST RETURNED INCOME OF RS.0.28 LACS E-FILED BY THE ASSESSEE ON 23/09/20 11 WHICH WAS PROCESSED U/S.143(1). 4.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), MUMBAI, IT TRANSPIRED THAT THE ASSESSEE OBTAINED BO GUS PURCHASES BILLS FOR RS.5.30 LACS FROM AN ENTITY NAMELY M/S. SRISHTI MERCANTILE P.LTD. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCE SS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 10/02/2016 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) & 142(1) WHEREIN THE A SSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 4.3 ALTHOUGH THE ASSESSEE FILED BANK STATEMENTS EVI DENCING PAYMENTS THROUGH BANKING CHANNELS, LEDGER EXTRACTS, PURCHASE INVOICES ETC. BUT FAILED TO PROVIDE STOCK REGISTER, DELIVERY CHALLANS , LORRY RECEIPTS, PROOF OF OCTROI PAYMENT ETC. TO SUBSTANTIATE THE DELIVERY OF THE MATERIAL. CONSEQUENTLY, LD. AO ESTIMATED AN ADDITION OF 12.5% AGAINST AFORESAID PURCHASES. UPON FURTHER APPEAL, THE SAID ESTIMATION WAS REDUCED BY ITA NO.6258/MUM/2018 M/S. ACE INTERNATIONAL CORPORATION ASSESSMENT YEAR :2011-12 3 LEARNED FIRST APPELLATE AUTHORITY TO 8%. 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. NO INDEPENDENT INVESTIGATION WAS CARRIED OUT BY LD. AO TO VERIFY THE GENUINENESS OF THE TRANSACTIONS. HOWEVER, AT THE SA ME TIME, THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE DELIV ERY OF MATERIAL AND ALSO FAILED TO PRODUCE THE SAID SUPPLIER TO CONFIRM THE TRANSACTIONS. THE ONUS CASTED UPON ASSESSEE, IN THIS REGARD, REMAINED UNDISCHARGED. THEREFORE, THE SAID FACTUAL MATRIX WAS A FIT CASE F OR ESTIMATION OF INCOME AGAINST SUSPICIOUS PURCHASES MADE BY THE ASSESSEE. FINDING THE ESTIMATION OF 8% TO BE QUITE FAIR AND REASONABLE, W E CONFIRM THE ORDER OF LEARNED FIRST APPELLATE AUTHORITY AND SEE NO REASON TO INTERFERE WITH THE SAME. 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.6258/MUM/2018 M/S. ACE INTERNATIONAL CORPORATION ASSESSMENT YEAR :2011-12 4 6789:69 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. B ( ) / THE CIT(A) 4. B / CIT CONCERNED 5. CD 8 E , E , / DR, ITAT, MUMBAI 6. DFG / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.