INCOME TAX OFFICER 23(3)(4), MUMBAI V. SHRI SURESH HARJI PATEL, MUMBAI

ITA 6525/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2089 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO. 6525/MUM/2018 ( ASSESSMENT YEAR: 2011-12) I.T.O.-22(3)(4), MUMBAI. VS. SHRI SURESH HARJI PATEL, R.H.B.-15, SECTOR-8, VASHI, NAVI MUMBAI-400708. PAN/GIR NO.AOBPP 4275 M (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI KUMAR PADMAPANI BORA (SR.DR) ASSESSEE BY NONE DATE OF HEARING 05/12/2019 DATE OF PRONOUNCEMENT 06/12/2019 / O R D E R PER: R.C. SHARMA, A.M. THIS IS THE APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LD. CIT(A)-34, MUMBAI DATED 21/08/2018 FOR THE A.Y. 2011-12 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. NO BODY APPEARED ON BEHALF OF THE ASSESSEE IN SP ITE OF SERVICE OF NOTICE, THEREFORE, THE BENCH DECIDED TO DISPOSE OFF THE APPEAL AFTER HEARING THE LD. DR AND CONSIDERING THE MATERIAL PLA CED ON RECORD. 3. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD. CIT(A) FOR RESTRICTING THE ADDITION ON ACCOUNT OF B OGUS PURCHASES TO ITA NO. 6525/MUM/2018 ITO VS SHRI SURESH HARJI PATEL 2 THE EXTENT OF 18% WHICH WAS MADE BY THE A.O. AT 25% . THE FACTS IN BRIEF ARE THAT THE A.O. MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES. AFTER MAKING ENQUIRY, THE A.O. ADDED 25% OF SUCH BO GUS PURCHASES IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 18% OF BOGUS PURCHASES AFTER HAVING T HE FOLLOWING OBSERVATION: 6.6 IN VIEW OF THE ABOVE, IT IS AN ADMITTED FACT T HAT DGIT(INV.) HAS GIVEN INFORMATION WITH REGARD TO CERTAIN HAWALA DEA LERS WHO ARE ENGAGED IN ACCOMMODATION ENTRIES WITHOUT ACTUAL LY SUPPLYING THE GOODS THE APPELLANT IS ONE OF THE BEN EFICIARY AND HAS RECEIVED SUCH ACCOMMODATION BILLS FROM NINE OF THE HAWALA OPERATOR TOTALING TO RS16,50,801/ . . THE A.O. ATTEMPTED TO VERIFY SUCH PARTY BY MAKING INDEPENDEN T ENQUIRIES U/S. 133(6) OF THE IT ACT, 1961 WHICH WAS RETURNED BACK UNSERVED. THE ONUS SHIFTED ON THE APPELLANT PA RTICULARLY IN THE BACKGROUND OF FINDING OF DGIT(INV), MUMBAI. THE APP ELLANT FILED CERTAIN DETAILS SUCH AS PURCHASE BILLS, LEDGER ACCO UNT, BANK STATEMENT ETC. HOWEVER, SOME OF THE SPECIFIC DETAIL S REQUIRED TO ESTABLISH THE GENUINENESS OF PURCHASE SUCH AS EV IDENCE OF TRANSPORTATION OF GOODS, ENTRY OF GOODS IN THE STOC K REGISTER, ONE TO ONE CONSUMPTION PATTERN OF ALLEGED PURCHASE ITEMS, CONFIRMATION FROM THE PARTIES CONCERNED ETC COULD N OT BE SUBMITTED BEFORE THE A.O.. NOR THE PRINCIPLE OFFIC ER OF THESE CONCERNS WERE PRODUCED BEFORE THE AO FOR EXAMINATIO N. HOWEVER, IT IS ALSO A FACT THAT THE AO HAS NOT QUES TIONED THE TOTAL SALE COMPONENT AND IF THERE IS A SALE, THERE SHOULD BE ITA NO. 6525/MUM/2018 ITO VS SHRI SURESH HARJI PATEL 3 PURCHASE. AS EVIDENT FROM CATENA OF JUDGMENTS ON BO GUS PURCHASES ONLY THE BENEFIT DERIVED BY USING SUCH ACCOMMODATIO N ENTRIES HAS TO BE BROUGHT TO TAX. THE ADVANTAGES FROM USING SUC H BOGUS BILLS ARE IN THE FORM OF SAVING VAT, SAVING OF TRANSPORTA TION CHARGES AND VARIOUS TAXES ETC. THE A.O. HAS DISALLOWED 25% OF THE PURCHASES CLAIMED FROM SUCH HAWALA DEALERS RELYING ON THE DECISION IN THE CASE OF M/S. VIJAY PROTEINS (1996 58 LTD 428 AHD.). HOWEVER, THE APPELLANT HAD ALREADY OFFERED THE EXIS TING GP AS INCOME FOR THE YEAR FOR THE PURCHASES MADE WHICH CO MES TO AROUND 18% THUS, THE DISALLOWANCE MADE BY THE A.O. IS UPHELD IN PRINCIPLE.. HOWEVER, THE PERCENTAGE IS RESTRICTED F ROM 25% TO 18%. THE GROUND OF APPEAL FILED BY THE APPELLANT ON THIS ISSUE IS THEREFORE, PARTLY ALLOWED. 5. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND FOUND THAT THE A.O. HAS MADE ADDITION AFTER GETTING INFORMATION FROM THE SALES TAX DEPARTMENT REGARDING THE ASSESSEE TAK ING ACCOMMODATION BILL IN RESPECT OF PURCHASES WITHOUT TAKING PHYSICAL DELIVERY OF THE GOODS. BY THE IMPUGNED ORDER, THE L D. CIT(A) AFTER RECORDING A FINDING TO THE EFFECT THAT THE TOTAL SA LES MADE BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE A.O. AND AFTE R CONSIDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS, HE RESTRICTED THE ADDITION TO THE EXTENT OF 18%. NOTHING WAS BROUGHT ON RECORD BY TH E LD DR SO AS TO PERSUADE ME TO DEVIATE FROM THE FINDINGS OF THE LD. CIT(A) FOR RESTRICTING THE ADDITION TO THE EXTENT OF 18%. ACCO RDINGLY, I DO NOT ITA NO. 6525/MUM/2018 ITO VS SHRI SURESH HARJI PATEL 4 FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) I N RESTRICTING THE ADDITION TO THE EXTENT OF 18%. I UPHOLD THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH DECEMBER, 2019. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 06/12/2019 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//