ITO WD 1(5), KALYAN V. GOPAL RAMSHISH TRIPATHI, BHIWANDI

ITA 6560/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0246 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 09-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 69C; 143(3); 133(6); 147; 148

Judgement Text

ITA NO 6560/MUM/2016 GOPAL RAMASHISH TRIPATHI ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 6560/MUM/2016 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER WARD 1(5) 1 ST FLOOR, MOHAN PLAZA, WAYALE NAGAR KALYAN(W), MUMBAI / VS. GOPAL RAM A SHISH TRIPATHI PROP. GMD DYE CHEMICAL 279,1 NAIGAON-II NEAR MARATHI VIDYALAYA BHIWANDI -421 302 ! ./ ./PAN/GIR NO. AAHPT-7617-B ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 16/08/2017 / DATE OF PRONOUNCEMENT : 18 /08/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2010- 11 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 [CIT(A)], THANE DATED 26/08/2016 QUA RELIEF PROVIDED TO ASSESSEE AGAINST CERTAIN BOGUS PURCHASES. NONE HAS APPEARED ON BEHALF OF ITA NO 6560/MUM/2016 GOPAL RAMASHISH TRIPATHI ASSESSMENT YEAR 2010-11 2 ASSESSEE AND NO ADJOURNMENT APPLICATION IS ON RECOR D. THEREFORE, LEFT WITH NO OPTION, WE PROCEED TO DECIDE THE APPEAL AFT ER HEARING LD. DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MAT ERIAL AVAILABLE ON RECORD. 2.1 BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED AS RESELLER & MANUFACTURER UNDER PROPRIETORSHIP CONCERN NAMELY GMD DYE CHEM WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 27/03/2015 WHERE THE INCOME OF T HE ASSESSEE WAS DETERMINED AT RS.56,57,810/- AFTER ADDITION OF RS.5 3,42,540/- U/S 69C ON ACCOUNT OF CERTAIN BOGUS PURCHASES. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 24/09/2010 DECLARING TOTAL INCOME OF RS.3,15,270/- AGAINST TURNOVER OF RS.131.49 LACS, W HICH WAS PROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASES BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.53,42,530/- FROM 17 PARTIES. CONSEQUENTLY, NOTIC E U/S 148 DATED 21/06/2013 WAS ISSUED WHICH WAS FOLLOWED BY STATUTO RY NOTICES U/S 142(1)/143(2). 2.3 TO CONFIRM THE PURCHASE TRANSACTIONS, NOTICES U /S 133(6) WERE ISSUED TO THE ALLEGED BOGUS SUPPLIERS, HOWEVER, THE SAME WERE EITHER RETURNED BACK WITH REMARKS LEFT OR NO SUBMISSION WAS RECEIVED AGAINST THE SAME. THE SAME WERE CONFRONTED TO THE ASSESSEE, WHO CONTENDED THAT THE PURCHASES WERE GENUINE SINCE THE ASSESSEE WAS IN POSSESSION OF PURCHASE INVOICES AND PAYMENTS WERE THROUGH BANK ING CHANNELS. THE ITA NO 6560/MUM/2016 GOPAL RAMASHISH TRIPATHI ASSESSMENT YEAR 2010-11 3 COPIES OF PURCHASE BILLS, LEDGER-EXTRACT AND BANK S TATEMENT WERE PRODUCED TO SUPPORT THE CONTENTIONS. HOWEVER, SINCE THE ASSESSEE COULD NOT PRODUCE TRANSPORT / OCTROI PAYMENT RECEIPTS, THE PURCHASES WERE TREATED AS NON-GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE U/S 69C. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 26/08/2 016 AND REITERATED THE SAME CONTENTIONS. THE LD. CIT(A) NOTED THAT THE ASSESSEE WAS IN POSSESSION OF PURCHASE DOCUMENTS AND THE PAYMENTS W ERE THROUGH BANKING CHANNELS BUT THE SAME, IN ITSELF, WAS NOT C ONCLUSIVE TO PROVE THE GENUINENESS OF THE PURCHASES. FINALLY, AFTER APPREC IATING THE GROSS PROFIT [GP] RATES OF EARLIER YEARS AND GP RATES REF LECTED BY THE ASSESSEE, LD.CIT(A) RESTRICTED THE IMPUGNED ADDITIONS TO RS.6 ,83,780/- WHICH ROUGHLY AMOUNTED TO 12.80% OF THE ALLEGED BOGUS PURCHASES OF RS.53,42,540/- . AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] SUPPORT ED THE STAND TAKEN BY LD. AO AND CONTENDED THAT MERE PAYMENT THR OUGH BANKING CHANNELS WAS NOT SUFFICIENT TO ESTABLISH THE GENUIN ENESS OF THE PURCHASES. MOREOVER, NONE OF THE SUPPLIER WAS FOUND AT THE GIVEN ADDRESS AND THE ONUS TO SUBSTANTIATE THE PURCHASES SQUARELY LIE ON THE ASSESSEE AND HE HAS FAILED TO DISCHARGE THE SAME AN D THEREFORE, FULL DISALLOWANCE THEREOF WAS JUSTIFIED. 5. WE HAVE HEARD THE CONTENTIONS AND PERUSED THE R ELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT TH ERE COULD BE NO SALE WITHOUT PURCHASES. THE SALES TURNOVER ACHIEVED BY T HE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE ASSESSEE I S IN POSSESSION OF ITA NO 6560/MUM/2016 GOPAL RAMASHISH TRIPATHI ASSESSMENT YEAR 2010-11 4 PURCHASE INVOICES AND PAYMENTS ARE THROUGH BANKING CHANNELS. ON THE OTHER HAND, THE ASSESSEE COULD NOT SUBSTANTIATE ACT UAL DELIVERY OF MATERIAL BY PRODUCING TRANSPORT / OCTROI RECEIPTS. THEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS T O ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MAT ERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTLY DONE. THE LD. CIT(A) HAS ELAB ORATELY APPRECIATED THE GP RATES FOR VARIOUS YEARS AND REACHED THE QUAN TUM OF ADDITION AFTER DUE APPLICATION OF MIND, WHICH, IN OUR OPINION, IS QUITE FAIR AND REASONABLE. THEREFORE, WE FIND NO REASON TO INTERFE RE WITH THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 18. 08.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI