M/S.FRAMROZE MARKETING CO. PRIVATE LIMITED, MUMBAI V. ACIT-6(3)(1), MUMBAI

ITA 6650/MUM/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3777 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 26-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYKUMAR SUBRAMANIYAN
• Keywords: Bogus purchase; Accommodation entries
• Section: 271(1)(c); 143(3); 133(6); 22; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI , !' .$% ,!( !' BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER. . 6650 / / 2018 (. .2011-12 ) ITA NO. 6650/MUM/2018 (A.Y.2011-12) M/S.FRAMROZE MARKETING CO. PRIVATE LIMITED, UNIT NO.9, 3 RD FLOOR, PRABHADEVI INDUSTRIAL ESTATE, VEER SAVARKAR MARG, MUMBAI 400 025 PAN: AAACF5027B / VS. : / APPELLANT THE ACIT -6(3)(1), AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI VIJAY KUMAR SUBRAMANIYAN / DATE OF HEARING : 03/12/2020 / DATE OF PRONOUNCEMENT : 22/02/2021 / ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI ( I N SHORT THE CIT(A)) DATED 19/09/2018 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN INDUSTRIAL THERMOMETERS, EPOXY COMPOUNDS, PRESSURE GAUGES AND OTHER INDUSTRIAL EQU IPMENTS. THE ASSESSMENT 2 ITA NO. 6650/MUM/2018 (A.Y.2011-12) IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2011-12 WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED BY INVESTIGATION WING THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES/ BOGUS PURCHASE BILLS AGGREGA TING TO RS.8,83,970/- FROM VARIOUS (SIX) HAWALA DEALERS. IN REASSESSM ENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTANTIATE GENUINEN ESS OF ALLEGED BOGUS PURCHASE BILLS, AS WELL AS SUPPLIERS OF THE GOODS. THE ASSESSEE FURNISHED THE DETAILS OF PAYMENTS MADE THROUGH BANKING CHANNEL, COPIES OF PURCHASE BILLS, DELIVERY CHALLANS, THE DETAILS OF CORRESPONDING SA LES AGAINST THE ALLEGED BOGUS PURCHASES. HOWEVER, NO CONFIRMATIONS FROM THE PART IES WHO SUPPLIED THE ALLEGED GOODS OR THE DOCUMENTS TO SUPPORT TRAIL OF GOODS VIZ. OCTROI RECEIPTS, INWARD STOCK REGISTER, ETC. WERE FILED BY THE ASSES SEE. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS AND THE DOCUMENT S FURNISHED BY THE ASSESSEE MADE ADDITION OF RS.1,10,496/- I.E. 12.5% OF THE TOTAL BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29/02/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX A CT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) ASSAILING ADDITION ON MERITS. THE FIRST APPELLATE AUTHORITY UPHELD THE FINDINGS O F ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSESSEE. NOW, THE ASSESSE E IS IN SECOND APPEAL BEFORE THE TRIBUNAL CHALLENGING THE ADDITION ON ACC OUNT OF BOGUS PURCHASES, AS WELL ASSAILING VALIDITY OF REOPENING U/S 148 OF THE ACT. 3. SHRI VIJAY KUMAR SUBRAMANIYAN , REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL OF ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE ASSESSEE HAS FAILED TO FILE CONFIRMATIONS FROM THE VENDORS F ROM WHOM THE BOGUS PURCHASE BILLS WERE OBTAINED. THE ASSESSING OFFIC ER HAD ISSUED NOTICES UNDER 3 ITA NO. 6650/MUM/2018 (A.Y.2011-12) SECTION 133(6) TO THE VENDORS ON THE ADDRESSES FURN ISHED BY THE ASSESSEE , HOWEVER, THE SAME WERE UNSERVED BY THE POSTAL DEPAR TMENT AS THE SAID VENDORS WERE NOT AVAILABLE AT THE GIVEN ADDRESSES. THUS, THE GENUINENESS OF THE VENDORS AS WELL AS THE BILLS UNDER DISPUTE COUL D NOT BE PROVED BY THE ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE FURTH ER POINTED THAT IN FIRST APPEAL BEFORE THE CIT(A), THE ASSESSEE RAISED NO DISPUTE WITH REGARD TO VALIDITY OF REOPENING. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTM ENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTH ORITIES BELOW. THE ASSESSEE IN APPEAL HAS RAISED FOUR GROUNDS. IN GRO UND NO.1 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED VALIDITY OF REOPENING. WE FIND THAT THIS LEGAL ISSUE HAS BEEN RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL. HOWEVER, NO MATERIAL HAS BEEN PLACED ON RECORD TO SUBSTANTIATE THAT THE REOP ENING PROCEEDINGS WERE NOT CARRIED OUT IN ACCORDANCE WITH LAW. CONSEQUENT LY, GROUND NO.1 OF THE APPEAL IS DISMISSED BEING DEVOID OF ANY MERIT. 5. IN GROUND NO.2(A) TO 2(F)OF THE APPEAL, THE ASS ESSEE HAS ASSAILED ADDITION AMOUNTING TO RS.1,10,495/- ON ACCOUNT OF B OGUS PURCHASE BILLS . THE ASSESSEE HAS ALLEGEDLY PROCURED ACCOMMODATION BILLS AGGREGATING TO RS.8,83,970/- FROM VARIOUS( SIX) SUSPICIOUS DEALER S. THE ASSESSEE COULD NEITHER PROVE THE GENUINENESS OF THE PURCHASES NOR THE SUPP LIERS. THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT BY THE ASSESSING OF FICER COULD NOT BE SERVED ON THE SUPPLIERS AS THEY WERE NOT AVAILABLE ON THE ADD RESSES FURNISHED BY THE ASSESSEE. THE ASSESSEE HAS ALSO FAILED TO FURNISH CONFIRMATION FROM THE SUPPLIERS OF THE GOODS, WHICH ARE SUBJECT MATTER OF DISPUTE. FURTHER, TO AMPLIFY DELIVERY OF GOODS, THE ASSESSEE COULD NOT F URNISH DOCUMENTS VIZ OCTROI 4 ITA NO. 6650/MUM/2018 (A.Y.2011-12) RECEIPTS, INWARD STOCK REGISTER, ETC. MERE PAYMENT BY CHEQUE IS NOT A CONCLUSIVE PROOF OF ALLEGED PURCHASES. THUS, IN TH E LIGHT OF THE ABOVE FACTS WE CONCUR WITH THE FINDINGS OF AUTHORITIES BELOW THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS . IT IS AN UNDISPUT ED FACT THAT THE REVENUE HAS NOT QUESTIONED THE SALES DECLARED BY THE ASSESSEE. WITHOUT PURCHASES, THERE CANNOT BE SALES. THEREFORE, IT IS ONLY PROFIT EMBE DDED IN BOGUS TRANSACTION THAT HAS TO BE BROUGHT TO TAX. THE ASSESSING OFFIC ER HAS ESTIMATED PROFIT @ 12.5% ON BOGUS PURCHASE BILLS . THE CIT(A) HAS UPH ELD THE SAME. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. MOHAMMAD HAJI ADAM & CO. IN INCOME TAX APPEAL NO.1004 OF 2016 DECIDED ON 11/02 /2019 HAS UPHELD THE FINDINGS OF TRIBUNAL IN RESTRICTING THE ADDITION LI MITED TO THE EXTENT OF DIFFERENCE IN G.P RATE ON ALLEGED BOGUS PURCHASES AND GENUINE PURCHASES. WE DEEM IT APPROPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR MAKING ADDITION ON ACCOUNT OF BOGUS PUR CHASES IN LINE WITH THE DECISION RENDERED BY HONBLE JURISDICTIONAL HIGH CO URT(SUPRA). THE GROUND NO.2 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPO SES. 6. IN GROUND NO.3 OF APPEAL, THE ASSESSEE HAS AS SAILED LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND CHARGING OF INTEREST UNDER SECTION 234A,234B 234C AND 234D OF THE ACT. THE CHALLENGE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS PREMATURE, AT THI S STAGE, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED, ACCORDINGLY. CHARGING O F INTEREST UNDER SECTION 234A,234B 234C AND 234D OF THE ACT ARE MANDATORY AN D CONSEQUENTIAL, THEREFORE, GROUND NO.3 RAISED BY THE ASSESSING OFFI CER IS DISMISSED BEING DEVOID OF ANY MERIT. 5 ITA NO. 6650/MUM/2018 (A.Y.2011-12) 7. THE GROUND NO.4 OF THE APPEAL IS GENERAL IN NATU RE, HENCE, REQUIRE NO ADJUDICATION. 8. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, T HE 22 ND DAY OF FEBRUARY, 2021. SD/- SD/- (S.RIFAUR RAHMAN) (VIKAS AWASTHY) ( / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, -'/ DATED: 22/02/2021 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. /0 / THE RESPONDENT. 3. 10 ( )/ THE CIT(A)- 4. 10 CIT 5. 23/0' , . . . , / DR, ITAT, MUMBAI 6. 3456 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI