ITO ,WARD- 17 (1)(3), MUMBAI V. BOON PETROCHEM HOUSE, MUMBAI

ITA 6375/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2022 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Accommodation entries
• Section: 133(6); 143(1); 147; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI C.N. PRAS AD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HON'BLE ACCOUNTANT MEMBER ITA NO S . 6374 & 6375 /MUM/201 8 ( A. Y S : 2009 - 10 & 2010 - 11 ) INCOME TAX OFFICER 17(1)(3) ROOM NO. 135, 1 ST FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 V. M/S. BOON PETROCHEM HOUSE 53/55, BHANDARI STREET MASJID BUNDER MUMBAI 400 003 PAN: AAAFB7130J ( ASSESSEE ) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R. BHOOPATHI DATE OF HEARING : 03.12.2019 DATE OF PRONOUNCEMENT : 03.12.2019 O R D E R PER C. N. PRASAD (JM) 1. THESE APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDER S OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 55 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 21.08.2018 FOR THE A.Y. 2009 - 10 AND A.Y. 2010 - 11 IN RESTRICTING THE DISALLOWANCE TO 8 % OF THE PURCHASES AS AGAINST 12.5% OF THE PURCHASES DISALLOWED AS NON - GENUINE/BOGUS BY THE ASSESSING OFFICER . 2 ITA NOS. 6374 & 6375/MUM/2018 M/S. BOON PETROCHEM HOUSE 2. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF T RADING WHOLESALER AND RETAILERS IN LUBRICANT OILS , FILED RETURN OF INCOME DECLARING INCOME OF . 22,532/ - AND . 36,715 / - FOR THE A.Y. 200 9 - 10 AND A.Y. 2010 - 11 RESPECTIVELY . THE RETURNS WERE PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT, MUMBAI ABOUT THE ACCOMMODATION ENTRIES PROVIDED BY VARIOUS DE ALERS AND ASSESSEE WAS ALSO ONE OF THE BENEFICIARY FROM THOSE DEALERS. THE ASSESSMENT S WERE REOPENED U/S. 147 OF THE ACT BASED ON THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, MUMBAI THAT THE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES FROM VARIOUS D EALERS WHO ARE ALL PROVIDING ACCOMMODATION ENTRIES WITHOUT THERE BEING TRANSPORTATION OF ANY GOODS. IN THE RE - ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THE PURCHASES MADE FROM VARIOUS PARTIES WHICH WERE REFERRED TO IN T HE ASSESSMENT ORDER S . ASSESSING OFFICER ALSO ISSUED NOTICE U/S. 133(6) OF THE ACT TO VARIOUS PARTIES AND THE SAID NOTICES WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES . ASSESSEE VIDE LETTER DATED 25.02.2014 EXPRESSED ITS INABILITY AND COULD NOT PRODUCE THE PARTIES BEFORE THE ASSESSING OFFICER AND CONTENDED THAT THE PURCHASES ARE GENUINE. ASSESSEE HOWEVER FURNISHED STATEMENT REFLECTING THE PURCHASES, BANK STATEMENT BILLS AND SUBMITTED THAT THE PURCHASES ARE GENUINE. 3 ITA NOS. 6374 & 6375/MUM/2018 M/S. BOON PETROCHEM HOUSE 3. NOT CONVINCED WITH THE SUBMISS IONS OF THE ASSESSEE THE ASSESSING OFFICER TREATED THE PURCHASES AS NON - GENUINE AND HE WAS OF THE OPINION THAT ASSESSEE HAD OBTAINED ONLY ACCOMMODATION ENTRIES WITHOUT THERE BEING ANY TRANSPORTATION OF MATERIALS AND THE ASSESSEE MIGHT HAVE MADE PURCHASES I N THE GRAY MARKET. IT IS THE FINDING OF THE ASSESSING OFFICER ASSESSEE HAS INTENTIONALLY INFLATED THE VALUE OF PURCHASES BY TAKING ACCOMMODATION BILLS TO REDUCE THE GROSS PROFIT AND THEREBY REDUCE THE TAXABLE INCOME. HE ALSO OBSERVED THAT THE DEALERS FRO M WHOM THE ASSESSEE MADE PURCHASES STATED THAT THEY HAVE ISSUED ONLY ACCOMMODATION BILLS. THEREFORE, ASSESSING OFFICER TREATED PURCHASES OF . 5,68,446 / - AND . 1,63,062 / - BEING 12.5% OF PURCHASES AS NON - GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE FOR T HE A.Y. 2009 - 10 AND A.Y. 2010 - 11 RESPECTIVELY. 4. ON APPEAL THE LD.CIT(A) CONSIDERING THE EVIDENCES A ND VARIOUS SUBMISSIONS OF THE ASSESSEE RESTRICTED THE DISALLOWANCE TO THE EXTENT 8 % OF THE NON - GENUINE PURCHASES FOR THE A.Y. 2009 - 10 AND A.Y. 2010 - 11 RESPECTIVELY . 5. INSPITE OF ISSUE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS SOUGHT BY THE ASSESSEE. THEREFOR E, WE PROCEED TO DISPOSE OFF THESE APPEAL S ON HEARING THE LD. DR ON MERITS. 4 ITA NOS. 6374 & 6375/MUM/2018 M/S. BOON PETROCHEM HOUSE 6. WE HAVE HEARD LD. DR, PERUSED THE ORDERS O F THE AUTHORITIES BELOW. ON A PERUSAL OF THE ORDER OF THE LD.CIT(A), WE FIND THAT THE LD.CIT(A) CONSIDERED THIS ASPECT OF THE MATTER ELABORATELY WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE AVERMENTS IN THE ASSESSMENT ORDER AND CONSIDERING THE NATURE OF THE BUSINESS OF THE ASSESSEE RESTRICTED THE DISALLOWANCE TO 8% OF THE NON - GENUINE PURCHASES FOR THE A.Y. 2009 - 10 & A.Y. 2010 - 11 RESPECTIVELY, WHILE HOLDING SO, THE LD.CIT(A) FOR THE A.Y.2009 - 10 OBSERVED AS UNDER: - AS REGARDS GROUND NO.3 IS CONCERNED REGARDING THE ADDITION OF RS.5,68,446/ - AT 12.5% OF PURCHASES OF RS.45,47,565/ - , IT IS GATHERED FROM THE AO'S ORDER THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVIDE ANY CORROBORATIVE EVIDENCE TO PROVE ITS PURCHASES FROM T HE AFORESAID SIX PARTIES. FURTHER, THE AO HAS TRIED TO ASCERTAIN THE GENUINENESS OF PURCHASES BY ISSUING NOTICES U/S.133(6) TO THE PARTIES BUT THEY CAME BACK UNSERVED. THIS FACT WAS BROUGHT TO THE NOTICE OF THE APPELLANT BUT THE APPELLANT EXPRESSED ITS INA BILITY TO PRODUCE THE PARTIES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS NOT BROUGHT ANYTHING NEW TO PROVE ITS GENUINENESS OF THE CLAIM BEFORE ME. THE APPELLANT HAS MERELY STATED THAT THE PURCHASES ARE GENUINE AND ALSO RELIED ON PLETHOR A OF CASE LAWS. HAVING CONSIDERED THE SAME, I FEEL THAT ALL THE CASE LAWS RELIED BY THE APPELLANT NOT APPLY TO THE APPELLANT'S CASE AS THE APPELLANT HAS FAILED TO DISCHARGE THE ONUS OF BRINGING THE PARTIES BEFORE THE AO. IN VIEW OF THE ABOVE FACTS, I AM OF THE CONSIDERED OPINION THAT THE AO HAS APPROPRIATELY MADE THE ADDITION BUT THE PERCENTAGE OF 12.5% APPEARS TO BE EXCESSIVE AND ACCORDINGLY, IT IS DIRECTED THAT THE PERCENTAGE MAY BE TAKEN AS 8% THUS GIVING PARTIAL RELIEF TO THE APPELLANT. THE APPELLANT GE TS RELIEF OF RS.2,04,641/ - I.E. (RS.5,68,446/ - - RS.3,63,805/ - AT 8% OF RS.45,47,565/ - ) - THUS, GROUND NO.3 OF THE APPELLANT IS PARTLY ALLOWED. 7. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD.CIT(A) AND THE REASONS GIVEN THEREIN, WE DO NOT FIND ANY INFIRMITY I N THE ORDER PASSED BY THE 5 ITA NOS. 6374 & 6375/MUM/2018 M/S. BOON PETROCHEM HOUSE LD.CIT(A). NONE OF THE FINDINGS AND OBSERVATIONS OF THE LD.CIT(A) HAVE BEEN REBUTTED WITH EVIDENCES BY THE REVENUE AND THUS WE DO NOT SEE ANY INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A) IN SUSTAINING THE ADDITION/DISALLOWANCE TO THE EXTENT OF 8 % OF THE PURCHASES FOR THE A.Y.2009 - 10 & A.Y. 2010 - 11. GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL S FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 03 RD DECEMBER, 2019 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 03/12 / 2019 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM