ITO 28(1)(4), MUMBAI V. SHRI. JOSEPH SANTA LOPEZ, PANVEL

ITA 6449/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8770 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA GAIKWADLD
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 64; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1 . ./ I.T.A. NO. 64 4 9 / MUM/ 2019 ( / ASSESSMENT YEAR: 2009 - 10 ) ITO 28 (1)(4 ), R. NO. 330 , 3RD FLOOR TOWER NO. 6 VASHI RAILWAY STATION COMPLEX NAVI MUMBAI - 400 703 / VS. SHRI JOS EPH SANTA LOPEZ TARA CHS LTD, PLOT NO.16, SECTOR - 16, ROADPALI KALAMBOLI, TAL: PANVEL, DIST - RAIGAD, MAHARASHTRA - 410 206. ./ ./ PAN/GIR NO. A AAPL - 5131 - B ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : MS. USHA GAIKWAD , LD. SR. DR / DATE OF HEARING : 29/07 /2021 / DATE OF PRONOUNCEMENT : 29/07/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR AY 20 09 - 10 CONTEST THE ORDE R OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 26 MUMBAI [CIT(A)] DATED 09/08/2019 WHICH HAS GRANTED PARTIAL RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2. AT THE TIME OF HEARING, NONE APPEARED FOR ASSESSEE . H OWEVER, THE MATERIAL ON RECOR D WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR 2 PLEADED FOR RESTORATION OF ASSESSMENT AS FRAMED BY LD. AO U/S 143(3) R.W.S. 147 ON 28/03/2015. THE ASSESSEE BEING RESIDENT INDIVIDUAL IS STATED TO BE ENGAGED IN TRADING OF IRON AND STEEL FITTINGS. 3. THE CASE WAS REOPENED PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA, WHEREIN IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS.54.65 LACS FROM 4 ENTITIES AS DETAILED IN PARA - 3 OF THE ASSESSMENT ORDER. AC CORDINGLY, NOTICE U/S 148 WAS ISSUED ON 26/03/2014. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THESE PURCHASES. 4. THOUGH THE ASSESSEE PRODUCED STOCK REGISTER, PURCHASE INVOICES AND LEDGER EXTRACT, HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THE SUPPLIERS DID NOT ELICIT ANY SATISFACTORY RESPONSE. THE ASSESSEE COULD NOT PRODUCE ANY OF THE PARTIES. THEREFORE, AFORESAID PURCHASES WERE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 5. THE LD. CIT(A), AFTER CONSIDERING ASSES SEES SUBMISSIONS, CONCURRED THAT SALES TURNOVER WAS NOT UNDER DOUBT AND THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL. THEREFORE, THE ONLY LOGICAL CONCLUSION THAT COULD BE DRAWN IS THAT THE ASSESSEE MADE ACTUAL PURCHASES FROM UNDISCLOSED PARTIES IN THE GREY MARKET AT LOWER RATES AND PROCURED THE BILLS FROM THESE SUPPLIERS TO SUPPRESS THE PROFITS. THEREFORE, IT WOULD BE PRUDENT TO MAKE ESTIMATED ADDITIONS AS PER THE DECISION OF HONBLE GUJARAT HIGH COURT IN CIT V/S SIMIT P. SHETH (356 ITR 451). FINALL Y THE ESTIMATION WAS MADE AT 12.5% OF ALLEGED BOGUS PURCHASES OF RS.54.65 LACS. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 6. AFTER GOING IMPUGNED ORDER, WE FIND THAT LD. CIT(A) HAS CLINCHED THE ISSUE IN THE RIGHT PERSPECTIVE. THE SALE WAS NOT UNDER DOUBT AND THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN 3 VIEW THE FACT THAT THE ASSESSEE WAS ENGAGED IN TRADING ACTIVITIES. THEREFORE, THE ESTIMATION OF 12.5% WAS QUITE FAIR & REASONABLE. FINDING NO REASON TO INTERFERE IN THE I MPUGNED ORDER, WE DISMISS THE APPEAL. 7. IN THE RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 2 9 TH JULY, 2021. SD/ - SD/ - (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 2 9 /07/2021 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / IT AT, MUMBAI.