SWATI SUNIL VORANI, MUMBAI V. ITO 20 (3)(4), MUMBAI

ITA 6402/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9568 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N PADMANABHANLD
• Assessee Lawyers: RUCHI M RATHODLD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 142(1); 133(6); 143(2)

Judgement Text

1 SWATI SUNIL VORANI ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE SHRI MANOJ KUMAR AGGARWAL, AM AND SMT. MADHUMITA ROY, JM ./ I.T.A. NO.6229/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER - 20(3)(4) 616, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG MUMBAI-400 012. / VS. SWATI SUNIL VORANI 17/3, LOHANA NIVAS LAXMI NARAYANA LANE MATUNGA C.R., MUMBAI-400 019. ! ./ ./PAN/GIR NO. ACVPV-5341-A ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./ I.T.A. NO.6402/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) SWATI SUNIL VORANI 17/3, LOHANA NIVAS LAXMI NARAYANA LANE MATUNGA C.R., MUMBAI-400 019. / VS. INCOME TAX OFFICER - 20(3)(4) 616, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG MUMBAI-400 012. ! ./ ./PAN/GIR NO. ACVPV-5341-A ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : MS. RUCHI M. RATHOD-LD. AR REVENUE BY : SHRI N. PADMANABHAN LD. DR / DATE OF HEARING : 07/01/2020 / DATE OF PRONOUNCEMENT : 07/01/2020 2 SWATI SUNIL VORANI ASSESSMENT YEAR-2009-10 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID CROSS-APPEALS FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-32, MUMBAI, [IN SHORT REFERRED TO AS CIT (A)] APPEAL NO. CIT(A)- 32/IT-410/ITO-20(3)(4)/2016-17 DATED 20/07/2018. 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. THE LEGAL GROUNDS RAISED BY ASSESSEE CHALLENGING REASSESSMENT PROCEEDINGS HA VE NOT BEEN PRESSED BY LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE, DURI NG THE HEARING OF THE APPEALS. 2. WE HAVE CAREFULLY HEARD RIVAL SUBMISSIONS, PERUS ED RELEVANT MATERIAL ON RECORD AND DELIBERATED ON VARIOUS JUDICIAL PRONO UNCEMENTS BEING RELIED UPON BY BOTH THE REPRESENTATIVES. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF HARDW ARE MATERIAL, WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) R.W.S. 147 ON 21/11/2016 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.18. 20 LACS, AFTER SOLE ADDITION OF ALLEGED BOGUS PURCHASES FOR RS.14.95 L ACS AS AGAINST RETURNED INCOME OF RS.3.25 LACS E-FILED BY THE ASSESSEE ON 1 9/09/2009 WHICH WAS PROCESSED U/S.143(1). 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA / DGIT (INVESTIGATION), IT TRA NSPIRED THAT THE ASSESSEE 3 SWATI SUNIL VORANI ASSESSMENT YEAR-2009-10 OBTAINED BOGUS PURCHASES BILLS AMOUNTING TO RS.119. 60 LACS FROM AS MANY AS 22 ENTITIES, THE DETAILS OF WHICH HAVE ALREADY B EEN EXTRACTED IN PARA-4 OF THE QUANTUM ASSESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND STATUTORY NOTICE WERE ISSUED U/S 143(2) AND 142(1) WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE T HE PURCHASE TRANSACTIONS. 3.3 THE ASSESSEE DEFENDED THE PURCHASES BY FURNISHI NG COPIES OF PURCHASE INVOICES, BANK STATEMENTS EVIDENCING PAYME NT TO SUPPLIERS THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U /S 133(6) TO ALL THE ENTITIES, TO CONFIRM THE TRANSACTIONS, WERE RETURNE D UNDELIVERED BY THE POSTAL AUTHORITIES. THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS BUT RELIED ON THE DOCUMENTS FURNISHED IN SUPPORT OF THE PURCHA SE TRANSACTIONS. THE ASSESSEE ALSO FAILED TO PROVIDE THE LATEST ADDRESSE S OF THE SUPPLIERS. FINALLY, NOT SATISFIED WITH ASSESSEES SUBMISSIONS / EXPLANATIONS, THE STATED PURCHASES WERE TREATED AS BOGUS PURCHASES. RELYING UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN SIMIT P.SHETH (356 ITR 451), LD. AO ESTIMATED THE ADDITIONS @12.5% AGAINST THESE PURCHA SES WHICH RESULTED INTO AN ADDITION OF RS.14.95 LACS IN THE HANDS OF T HE ASSESSEE. 4. THE LEARNED CIT(A), AFTER CONSIDERING ASSESSEES SUBMISSIONS INCLUDING GP / NP RATES REFLECTED IN VARIOUS YEARS, SCALED DOWN THE ESTIMATION TO 5%. THE SAID ADJUDICATION HAS GIVEN R ISE TO CROSS-APPEALS BEFORE US. THE REVENUE IS AGGRIEVED BY REDUCTION IN ESTIMATED ADDITIONS WHEREIN THE ASSESSEE IS AGGRIEVED BY ADDITION OF 5% AS SUSTAINED BY LD. CIT(A). 4 SWATI SUNIL VORANI ASSESSMENT YEAR-2009-10 5. AFTER CAREFUL CONSIDERATION OF ORDERS OF LOWER A UTHORITIES AND AFTER APPRECIATING THE ARGUMENTS ADVANCED BY RESPECTIVE R EPRESENTATIVES, WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SA LE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS I.E. TRADING. UNDISPUTEDLY THE ASSESSEE WAS IN POSSESSIO N OF PRIMARY PURCHASE DOCUMENTS AND THE PAYMENTS TO THE SUPPLIERS WERE TH ROUGH BANKING CHANNELS. THE ASSESSEES BOOKS OF ACCOUNTS WERE SUB JECTED TO AUDIT. HOWEVER, AT THE SAME TIME, THE ASSESSEE MISERABLY F AILED TO SUBSTANTIATE THE PURCHASES AND FAILED TO PRODUCE ANY OF THE SUPP LIERS TO CONFIRM THE TRANSACTIONS. NOTICES ISSUED U/S 133(6) TO ALL THE ENTITIES ELICITED NO RESPONSE AND THEREFORE, THE PRIMARY ONUS CASTED UPO N ASSESSEE, IN THIS REGARD, REMAINED UNDISCHARGED. 6. THE STATED FACTUAL MATRIX, IN OUR CONSIDERED OPI NION, WOULD MAKE IT A FIT CASE TO MAKE ESTIMATED ADDITIONS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PRO FIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY / UNORGANIZED MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES, WHICH LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DONE SO. FINDING TH E ESTIMATION OF 5% TO BE QUITE FAIR AND REASONABLE, WE FIND NO REASON TO INT ERFERE IN THE IMPUGNED ORDER. 7. THE LD. AR HAS RELIED UPON THE DECISION OF THIS TRIBUNAL IN SMT. KANJUBALA N.PAREKH V/S ITO (ITA NO.6198/MUM/2018DAT ED 27/11/2019) FOR THE SUBMISSIONS THAT ADDITIONS COULD NOT BE SUS TAINED MERELY BECAUSE NOTICES U/S 133(6) WERE UNSERVED. HOWEVER, UPON PER USAL OF THE SAME, WE 5 SWATI SUNIL VORANI ASSESSMENT YEAR-2009-10 FIND THE SAME TO BE FACTUALLY DISTINGUISHABLE SINCE IT WAS THE OBSERVATION THEREIN THAT PROPER ENQUIRIES WERE NOT CONDUCTED BY LD.AO, WHICH IS NOT THE CASE HERE. IN OUR CASE, LD.AO HAD ISSUED NOTICES U/ S 133(6) TO ALL THE ENTITIES WHICH WERE NEVER RESPONDED TO BY ANY OF TH E SUPPLIERS. THE ASSESSEE FAILED TO PROVIDE THE LATEST WHEREABOUTS O F ANY OF THE SUPPLIERS. THEREFORE, THE SAID CASE LAW COULD NOT COME TO THE RESCUE OF THE ASSESSEE. 8. BOTH THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH JANUARY, 2020. SD/- SD/- (MADHUMITA ROY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07/01/2020 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,-$ , , / DR, ITAT, MUMBAI 6. -./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.