ASST. CIT CIRCLE-6 (1)(1), MUMBAI V. M/S ANIKA APPARELS PVT LTD., MUMBAI

ITA 6560/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 17-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR LD
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6560/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) ACIT - CIRCLE 6(1)(1 ) 522, 5 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI 400 020 / VS. M/S A NIKA APPA RELS PRIVATE LTD. 101, AMIR INDUSTRIAL ESTATE SUN MILL COMPOUND, LOWER PAREL MUMBAI 400 013 PAN NO. : AA FCA - 3169 - E ( /APPELLANT ) : ( ! / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI BRAJENDRA KUMAR LD. SR. DR / DATE OF HEARING : 03/05/2021 / DATE OF PRONOUNCEMENT : 03/05/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 2010-11 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-12, MUMBAI [IN SHORT CIT(A) ] WHICH HAS P ROVIDED CERTAIN RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATE RIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT FRAMED BY LD. AO. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED IN MANUFACTURING OF G ARMENTS WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3 ) R.W.S. 147 ON 18/03/2016. THE ORIGINAL RETURN FILED BY ASSESSEE W AS PROCESSED U/S 143(1). HOWEVER, PURSUANT TO RECEIPT OF CERTAIN INF ORMATION FROM SALES TAX DEPARTMENT, MUMBAI, IT TRANSPIRED THAT THE ASSE SSEE MADE ALLEGED BOGUS PURCHASES OF RS.5.19 LACS FROM THREE ENTITIES AS DETAILED IN THE ASSESSMENT ORDER. ACCORDINGLY, THE CASE WAS REOPENE D AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FIL E REQUISITE DETAIL TO SUBSTANTIATE THE PURCHASES. 3.2 IN SUPPORT OF PURCHASES, THE ASSESSEE FURNISHED COPIES OF PURCHASE BILLS, LEDGER ACCOUNTS, AND BANK STATEMENT S EVIDENCING PAYMENT THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U/S 133(6) DID NOT ELICIT SATISFACTORY RESPONSE. THE LD. AO, A FTER CONSIDERING ENTIRE FACTUAL MATRIX AS WELL AS IN THE BACKGROUND OF VARI OUS JUDICIAL PRONOUNCEMENTS, OPINED THAT PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES WAS TO BE DISALLOWED. THE ESTIMATION WAS MADE @12.5% WHICH RESULTED INTO AN ADDITION OF RS.0.64 LACS IN THE HANDS OF THE ASSESSEE. 4. BEFORE LD. CIT(A), THE ASSESSEE SUBMITTED THAT T HE PURCHASED MATERIAL WAS USED IN THE MANUFACTURING OF GARMENTS. THESE WERE CONSUMABLE ITEMS WHICH ATTRACTED VAT RATE OF 5%. FU RTHER, SIMILAR ADDITIONS MADE IN AY 2009-10 WERE ALREADY DELETED B Y LEARNED FIRST APPELLATE AUTHORITY. THE LD. CIT(A), AFTER DUE CONS IDERATION OF 3 ASSESSEES SUBMISSIONS AS WELL AS MATERIAL ON RECOR D, REDUCED THE ESTIMATION TO 5%. AGGRIEVED, THE REVENUE IS IN FURT HER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE SALES TURNOVER WAS NO T IN DOUBT AND THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCU MENTS. THE PAYMENT TO THE SUPPLIER WAS THROUGH BANKING CHANNEL S. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE FACTS OF THE CAS E MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANS ACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMI SSIONS AS WELL AS MATERIAL ON RECORD, ESTIMATED THE ADDITIONS @5%. KE EPING IN VIEW THE FACT THAT THE PURCHASED ITEMS ATTRACTED VAT RATE OF 5%, THE SAID ESTIMATION COULD NOT BE TERMED AS UNJUSTIFIED, IN A NY MANNER. THEREFORE, FINDING NO REASON TO INTERFERE IN THE IMPUGNED ORDE R, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 03 RD MAY, 2021. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03/05/2021 SR.PS, JAISY VARGHESE 4 !'#' / 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.