ITO 21 (1)(1), MUMBAI V. ABDUL RAUF BILAL AHMED, MUMBAI

ITA 6337/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0410 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside
• Section: 143(3); 142(1); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 6337/MUM/2018 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER - 21(1)(1), 1 ST FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012. VS. SHRI ABDUL RAUF BILAL AHMED, 401 - A, BUILDING HOUSE, 146, VS MARG, MAHIM (W) MUMBAI - 400018 . PAN NO. AATPB3087H APPELLANT RESPONDENT REVENUE BY : SMT . JOTHILAKSHMI NAYAK , DR ASSESSEE BY : NONE DATE OF H EARING : 26/11/2019 DATE OF PRONOUNCEMENT : 16/12/2019 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) - 33 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 /148 OF THE INCOME TAX ACT 1961, (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 26. 11.2019, NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE BENCH ON THE ABOVE DATE. AS THERE IS NON - COMPLIANCE ON THE PART OF THE ASSESSEE, WE ARE SHRI ABDUL RAUF BILAL AHMED ITA NO.6337/MUM/2018 2 PROCEEDING TO DISPOSE OFF THIS APPEAL ON MERITS, AFTER EXAMINING THE DOCUMENTS AVAIL ABLE ON RECORD. 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD . CI T ( A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES AMOUNTING TO RS .4,14,90 5/ - WITHOUT APPRECIATING THE FACT THAT THE ADDITION MADE IS ON THE BASIS OF CREDIBLE INFORMATION RECEIVED FROM THE MAHARASHTRA SALES TAX DEPARTMENT FOLLOWED UP BY INDEPENDENT ENQUIRIES BY THE ASSESSING OFFICER. 2. ON THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW , T HE LD. CIT ( A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF B OGUS PURCHASES AMOUNTING TO RS.4,14,905/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSES HAS FAILED TO DISCHARGE T HE ONUS OF PRODUCING A NY CORROBORATIVE EVIDENCE VIZ. D ETAILS OF DELIVERY OF GOODS SUCH AS TRANSPORTATION , LORRY DETAILS - INWARD AND OUTWARD DELIVERY CHALLAN ETC. TO PROVE THAT THE PURCHASES ARE GENUINE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CI T(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES AMOU NTING TO RS. 4,14,9 0 5/ - WITH OUT APPRECIATING THE FACT THAT T HE CREDENTIALS OF THE ASSESSEE AND THEIR SUPPLIER IS IN DOUBT AS THE STAT EMENT RECORDED U/S 131 OF THE IT ACT OF THE ABOVE MENTIONED PARTI ES BEFORE THE AO AND THE SALES T AX DEPARTMENT ARE CONTRADICT OR Y AND THE ASSESSEE IS NOT KE EPING AND MAINTAINING DAY TO DAY STOCK REGISTER FOR RAW MATERIALS & FINISHED GOODS AND ALSO NOT KEEPING AND MAINTAINING ANY PERIODIC MANUFACTURING ACCOUNTS TO PROVE HIS CLAIMS. 3. IN THE INSTANT CASE, THE ASSESSING OFFICER (AO) RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS OF RS.12,50,151/ - FROM TWO PARTIES NAMELY MARUTI STEELS (RS.9,50,103/ - ) AND SHIV INDUSTRIES (RS.3,00,048/ - ). DURING THE C OURS E OF RE - ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S 142(1) TO THE ASSESSEE CALLING FOR DETAILS. HOWEVER, HE FOUND THAT THE ASSESSEE WAS NOT SHRI ABDUL RAUF BILAL AHMED ITA NO.6337/MUM/2018 3 COMPLYING WITH THE VARIOUS NOTICES ISSUED U/S 142(1) OF THE ACT. THE AO FURTHER FOUND THAT AS PER THE INFOR MATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THE EXTENT OF AMOUNT MENTIONED TOWARDS FICTITIOUS PURCHASES ARE AS UNDER : SR. NO. NAME OF THE PARTY WHO HAS ISSUED BOGUS BILLS TO THE ASSESSEE AMOUNT OF SUCH BOGUS BILL IN RS. 1. MARUTI STEELS RS.9,50,103/ - 2. SHIV INDUSTRIES RS.3,00,048/ - 3. ASIAN STEEL RS.4,09,469/ - TOTAL RS.16,59,620/ - THE AO ALSO INFORMED THE ASSESSEE THAT THE NOTICES ISSUED U/S 133(6) TO THE ABOVE PARTIES HAVE BEEN RETURNED BANK BY THE POSTAL AUTHORITIES AS UN - SERVED. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO RELIED ON THE ORDER OF THE TRIBUNAL IN T HE CASE OF M/S VIJAY PROTEINS LTD . (1996) 58 ITD 428 (AHD) AND ESTIMATED THE PROFIT @ 25% OF THE DISPUTED PURCHASES OF RS.16,59,620/ - WHICH COMES TO RS.4,14,905/ - . 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 17.08.2018, THE LD. CIT(A) DELETED THE DISALLOWANCE OF RS.4,14,905/ - MADE BY THE AO ON THE REASON THAT THE ASSESSEE HAD PLACED BEFORE HIM EVIDENCE SUCH AS PURCHASE INVOICES, DELIVERY CHALLANS, LEDGER ACCOUNT OF THE PARTIES IN TH E BOOKS OF THE ASSESSEE AND THE BANK STATEMENT SHOWING THE PAYMENTS MADE FOR THE DISPUTED PURCHASES. 5. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE (DR) SUBMITS THAT IN THE INSTANT CASE, THE NOTICES U/S 133(6) ISSUED BY THE AO TO (I) M/S MARUTI STEELS, SHRI ABDUL RAUF BILAL AHMED ITA NO.6337/MUM/2018 4 (II ) M/S SHIV INDUSTRIES AND (III) ASIAN STEEL WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARKS UN - SERVED. IT IS FURTHER EXPLAINED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED BEFORE THE AO COPIES OF BILLS ISSUED BY THE ALLEGED BOGUS SUPPLIERS ; HOWEVER, THE AO FOUND THAT (I) NONE OF THE BILLS HAVE THE ADDRESS OF THE ASSESSEE, EXCEPT WRITING OF THE NAME BA CONSTRUCTION, MUMBAI, (II) NONE OF THE BILLS HAVE ANY DETAILS OF TRANSPORTATION OF GOODS WHICH ARE WEIGHED IN TONS ; NO TRANSPORT RECEIPTS ARE PROVIDED, (III) IN THE CASE OF ASIAN STEEL, THERE IS NO MENTION OF EVEN DELIVERY CHALLAN NUMBER, (IV) IN THE CASE OF M/S MARUTI STEEL, THOUGH CHALLAN NUMBERS ARE MENTIONED ON THE BILL, THOSE WERE NOT SUBMITTED. THE LD. DR FURTHE R SUBMITS THAT IN VIEW OF THE ABOVE FACTS, THE AO HAS RIGHTLY FOLLOWED THE DECISION IN M/S VIJAY PROTEINS LTD. (SUPRA) AND RESTRICTED THE DISALLOWANCE TO 25% OF THE DISPUTED PURCHASES OF RS.16,59,620/ - WHICH COMES TO RS.4,14,905/ - . THUS IT IS ARGUED THAT T HE ORDER PASSED BY THE LD. CIT(A) BE SET ASIDE AND THE ONE PASSED BY THE AO BE RESTORED. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT AS PER THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE ASSESSEE HAS MADE BOGUS PURCHASES AMOUNTING TO RS.16,59,620/ - FROM THE THREE HAWALA OPERATORS. THE NOTICES ISSUED BY THE AO U/S 133(6) DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE RETURNED BACK BY THE POS TAL AUTHORITIES WITH THE REMARKS UN - SERVED. THE ASSESSEE FURTHER FAILED BEFORE THE AO TO FILE THE DELIVERY CHALLAN, TRANSPORT RECEIPT. AS THE NOTICES ISSUED BY THE AO U/S 133(6) WERE RETURNED UN - SERVED, THE AO REQUESTED THE ASSESSEE TO PRODUCE THE CONC ERNED SUPPLIERS SO THAT THE GENUINENESS OF THE PURCHASES COULD BE SHRI ABDUL RAUF BILAL AHMED ITA NO.6337/MUM/2018 5 VERIFIED. HOWEVER, THE ASSESSEE FAILED TO PRODUCE BEFORE THE AO THE SAID SUPPLIERS FOR EXAMINATION. THESE ABOVE ASPECTS HAVE NOT BEEN APPRECIATED PROPERLY BY THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE NOTICES ISSUED BY THE AO U/S 133(6) IN THE ADDRESS GIVEN BY THE ASSESSEE TO THE CONCERNED SUPPLIERS WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARK UN - SERVED; THE ASSESSEE FAILED TO PROD UCE BEFORE THE AO THE CONCERNED SUPPLIERS FOR EXAMINATION, THOUGH ASKED FOR ; THE ASSESSEE FAILED TO FILE BEFORE THE AO THE DELIVERY CHALLAN, TRANSPORT RECEIPT. HOWEVER , CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO RESTR ICT THE DISALLOWANCE TO 12.5% OF THE DISPUTED PURCHASES. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/12/2019. S D/ - S D/ - ( SAKTIJIT DEY ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 16/12/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI