ITO - 12 (1)(1), MUMBAI V. ADVANCE EMERGENCY SYSTEMS PVT. LTD., MUMBAI

ITA 6385/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3198 (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 BHOOPATHILD
• Assessee Lawyers: ANKUSH AGARWAL LD
• Keywords: Bogus purchase
• Section: 143(3); 142(1); 143(2); 148

Judgement Text

ITA NO.6385/MUM/2018 M/S. ADVANCE EMERGENCY SYSTEMS P.LTD. 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.6385/MUM/2018 ( / ASSESSMENT YEAR: 2010-11 ) INCOME TAX OFFICER - 1 2 (1)(1) ROOM NO.226, 2 ND FLOOR AAYKAR BHAVAN MUMBAI-400 020. / VS. M/S. ADVANCE E MERGENCY SYSTEMS PRIVATE LIMITED A-306, VIRWANI INDUSTRIAL ESTATE OFF. WESTERN EXPRESS HIGHWAY GOREGAON (E), MUMBAI-400 063. ! ./ ./PAN/GIR NO. AAGCA-3741-F ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : SHRI ANKUSH AGARWAL-LD. AR REVENUE BY : SHRI R. BHOOPATHI-LD. DR / DATE OF HEARING : 03/12/2019 / DATE OF PRONOUNCEMENT : 03/12/2019 / 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 LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-20, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)] APPEAL NO. CIT(A)-20/IT-10243/16-17 DATED 22/06/2018. IT IS EV IDENT FROM GROUNDS ITA NO.6385/MUM/2018 M/S. ADVANCE EMERGENCY SYSTEMS P.LTD. ASSESSMENT YEAR :2010-11 2 OF APPEAL THAT THE SOLE ISSUE THAT ARISES FOR OUR C ONSIDERATION IS ADDITION ON ACCOUNT OF ALLEGED BOGUS 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 CORPORATE ASSESSEE STATED TO BE ENGAGED IN DEALING IN SECURITY EQUIPMENT, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 29/02/2016 WHEREIN THE INCOME OF THE ASSESSEE WAS D ETERMINED AT RS.33.58 LACS AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.8.97 LACS AS AGAINST RETURNED INCOME OF RS.24.61 LACS E- FILED BY THE ASSESSEE ON 21/09/2010 WHICH WAS PROCESSED U/S.143( 1). 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INVESTIGATION), MUMBAI / SALES TAX DEPARTMENT, IT TRANSPIRED THAT T HE ASSESSEE OBTAINED BOGUS PURCHASES BILLS FOR RS.35.88 LACS FR OM AN ENTITY NAMELY VIJAY INDUSTRIES. ACCORDINGLY, THE CASE WAS REOPENE D AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 23/03/201 5 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 143(2) & 142(1) WHEREIN TH E ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE PURCHASE TRANSACTIONS. 3.3 THE ASSESSEE DEFENDED THE PURCHASES BY FILING C OPIES OF PURCHASE BILLS, LEDGER EXTRACTS, BANK STATEMENTS EVIDENCING PAYMENTS THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U/S 133(6 ) TO CONFIRM THE TRANSACTIONS, DID NOT ELICIT SATISFACTORY RESPONSE. THE FIELD INQUIRY REVEALED THAT THE SAID SUPPLIER WAS NOT EXISTING AT THE GIVEN ADDRESS. THE AFORESAID FACTUAL MATRIX LED LD. AO TO DISBELIEVE T HE SAID TRANSACTIONS AND ACCORDINGLY, THE ASSESSEE WAS SADDLED WITH ESTI MATED ADDITIONS TO THE EXTENT OF 25% OF THESE PURCHASES. ITA NO.6385/MUM/2018 M/S. ADVANCE EMERGENCY SYSTEMS P.LTD. ASSESSMENT YEAR :2010-11 3 4. UPON FURTHER APPEAL, LEARNED FIRST APPELLATE AUT HORITY, FINDING THE ESTIMATION OF 25% TO BE ON THE HIGHER SIDE, REDUCED THE ESTIMATION TO 12.5%. AGGRIEVED, THE REVENUE IS UNDER FURTHER APPE AL 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. UNDISPUTEDL Y THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIER WAS THROUGH BANKING CHANNELS. HOWEVER, AT THE SAME TIME, THE ASSESSEE FAILED TO PRODUCE THE SAID SUPPLIER TO CON FIRM THE TRANSACTIONS. THE ONUS CASTED UPON ASSESSEE, IN THIS REGARD, REMA INED UNDISCHARGED. THEREFORE, THE SAID FACTUAL MATRIX WAS A FIT CASE F OR ESTIMATION OF INCOME AGAINST SUSPICIOUS PURCHASES MADE BY THE ASSESSEE. KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS, THE ESTIMATION O F 12.5% AS MADE BY LD. CIT(A) COULD NOT BE SAID TO BE UNREASONABLE FRO M ANY ANGLE. THEREFORE, BY CONFIRMING THE SAME, WE DISMISS THE A PPEAL. 6. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD DECEMBER, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03/12/2019 SR.PS, JAISY VARGHESE 6789:69 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT ITA NO.6385/MUM/2018 M/S. ADVANCE EMERGENCY SYSTEMS P.LTD. ASSESSMENT YEAR :2010-11 4 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ' , , / DR, ITAT, MUMBAI 6. 123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.