ITO 32 (1)(3), MUMBAI V. SMT. BHAVNA SUNIL JOSHI , MUMBAI

ITA 6662/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4390 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: PU KHR AJ GU JAR
• Keywords: Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 133(6); 143(1); 201; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) SMC BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGA RWAL, HON'BLE ACCOUNTANT MEMBER ITA NO. 6662 / MUM/20 19 (A.Y: 201 0 - 11) INCOME TAX OFFICER 32(1)(3) ROOM NO. 705, 7 TH FLOOR KAUTILYA BHAVAN, G - BLOCK BANDRA KURLA COMPLEX BANDRA(E), MUMBAI - 400051 V. SMT BHAVNA SUNIL JOSHI B - 71, BUILDING NO. 4 7 TH FLOOR, RUSTOMJEE REGENCY DAHISAR (W), MUMBAI - 400066 PAN: AAJPJ6892N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PU KHR AJ GU JAR DEPARTMENT BY : SHRI SANJAY J. SETHI DATE OF HEARING : 02.09.2021 DATE OF PRONOUNCEMENT : 02 .09.2021 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 46 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 19.07.2019 FOR THE A.Y. 2010 - 11 IN RESTRICTING THE ADDITION @ 7.79 % AS AGAINST @ 12 % GROSS PROFIT ESTIMATED BY THE A SSESSING OFFICER. 2 ITA NO. 6662/MUM/2019 (A.Y: 2010 - 11) SMT BHAVNA SUNIL JOSHI 2. BRIEFLY STATED THE FACTS ARE THAT, ASSESSEE ENGAGED IN BUSINESS OF SUPPLIER OF GARMENTS AND CONSUMABLE GOODS TO SHOPPING MALLS, FILED RETURN OF INCOME ON 09.09.2010 DECLARING INCOME OF . 4,97,399 / - FOR THE A.Y. 2010 - 11 AND THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT (INVESTIGATION), MUMBAI ABOUT THE ACCOMMODATION ENTRIES PROVIDED BY VARIOUS DEALERS AND ASSESSEE WAS ALSO ONE OF THE BENEFICIARY FROM THOSE DEALERS. THE ASSESSMENT WAS REOPENED U/S. 147 OF THE ACT BASED ON THE INFORMATION RECEIVED FROM DGIT (INVESTIGATION), MUMBAI, THAT T HE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES FROM VARIOUS PARTIES AS REFERRED IN THE ASSESSMENT ORDER WHO ARE SAID TO BE PROVIDING ACCOMMODATION ENTRIES WITHOUT THERE BEING TRANSPORTATION OF ANY GOODS. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE WAS RE QUIRED TO PROVE THE GENUINENESS OF THE PURCHASES MADE FROM THE PARTIES MENTIONED IN THE ASSESSMENT ORDER. IN RESPONSE ASSESSEE FURNISHED PURCHASE BILLS AND SUBMITTED THAT THE PURCHASES MADE ARE GENUINE. ASSESSEE FURTHER SUBMITTED THAT THE PAYMENTS ARE MA DE THROUGH ACCOUNT PAYEE CHEQUES AS SUCH CONTENDED THAT ALL THE PURCHASES ARE GENUINE. 3 ITA NO. 6662/MUM/2019 (A.Y: 2010 - 11) SMT BHAVNA SUNIL JOSHI 3. NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE THE ASSESSING OFFICER TREATED THE PURCHASES AS NON - GENUINE AND HE WAS OF THE OPINION THAT ASSESSEE HAD OBTAINED ONLY A CCOMMODATION ENTRIES WITHOUT THERE BEING ANY TRANSPORTATION OF MATERIALS AND THE ASSESSEE MIGHT HAVE MADE PURCHASES IN THE GRAY MARKET. ASSESSING OFFICER OBSERVED THAT THE NOTICES ISSUED U/S. 133(6) OF THE ACT TO THE PARTIES WERE RETURNED UNSERVED AND THE ASSESSEE HAS NOT PRODUCED THE PARTIES BEFORE THE ASSESSING OFFICER . IT IS THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE FAILED TO PRODUCE THE PARTIES IN SUPPORT OF ITS CLAIM THAT PURCHASES ARE GENUINELY MADE FROM THE PARTIES. THEREFORE, ASSESSI NG OFFICER TREATED 1 2% OF THE ALLEGED BOGUS PURCHASES OF . 84,71,114 / - FOR THE A.Y. 2010 - 11 AS NON - GENUINE. ON APPEAL THE LD.CIT(A) CONSIDERING THE EVIDENCES AND VARIOUS SUBMISSIONS OF THE ASSESSEE RESTRICTED THE ADDITION @7.79 % AS AGAINST @ 1 2% GROSS PROF IT MADE BY THE ASSESSING OFFICER. 4. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUPPORTED THE ORDER OF THE LD.CIT(A). 5. LD. DR VEHEMENTLY SUPPORTED THE O RDERS OF THE ASSESSING OFFICER. 4 ITA NO. 6662/MUM/2019 (A.Y: 2010 - 11) SMT BHAVNA SUNIL JOSHI 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE ORDER OF THE LD.CIT(A), WE FIND THAT THE LD.CIT(A) CONSIDERED THIS ASPECT OF THE MATTER ELABORATELY WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE AVERMENTS IN THE ASSESSMENT ORDER AND FOLLOWING DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE OWN CASE IN ITA.NO. 1579/MUM/2016 FOR THE A.Y. 2009 - 10 , RESTRICTED THE ADDITION TO 7.79 % OF THE NON - GENUINE PURCHASES OF . 84,71,114 / - , WHILE H OLDING SO, THE LD.CIT(A) OBSERVED AS UNDER: - 6. AFTER TAKING INTO CONSIDERATION THE AO'S FINDINGS AND THE APPELLANT'S SUBMISSIONS AND ORDER SHEET NOTINGS, AS WELL AS THE FACTS OF THE CASE, DECISION ON THE GROUND RAISED BY THE ASSESSEE IS MADE HERE UNDER. 7. ALTHOUGH THE APPELLANT HAS RAISED 6 DIFFERENT GROUNDS, BUT ONLY EFFECTIVE GROUND IS AGAINST ADDITION OF . 10,16,534/ - ON THE BASIS OF G.P. % @ 12% ON THE PURCHASES MADE FROM ALLEGED HAWALA DEALERS. IN PARA 2 OF THE ASSESSMENT ORDER, LD. A.O HAD M ENTIONED THAT AN INFORMATION WAS RECEIVED FROM THE OFFICE OF DGIT(LNV) FROM WHERE WHICH IT WAS REVEALED THAT THE A PPELLANT HAD MADE PURCHASES OF . 84,71,114/ - FROM ALLEGED HAWALA DEALERS. ON THE BASIS OF INFORMATION RECEIVED FROM OFFICE OF DGIT, ASSESSMENT WAS RE - OPENED AND SINCE THE APPELLANT WAS MAINTAINING STOCK REGISTER AND OTHER QUANTITATIVE DETAILS, THEREFORE, THE LD. A.O ESTIMATED THE SUPPRESSED PROFIT FROM SUCH PURCHASES FROM ALLEGED HAWALA DEALERS @ 12% AND ADDED A SUM OF . 10.16.534/ - TO THE TOTAL TAXABLE INCOME OF THE ASSESSEE. 7.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, IT WAS POINTED OUT THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES, INCOME OF THE ASSESSEE WAS ESTIMATED @ 12% BY THE LD. A.O IN APPELLANT'S OWN CASE FOR A.YR. 2009 - 10. THE APPEAL OF THE ASSESSEE FOR A.YR. 2009 - 10 HAS 5 ITA NO. 6662/MUM/2019 (A.Y: 2010 - 11) SMT BHAVNA SUNIL JOSHI BEEN DECIDED BY HON'BLE ITAT IN ITA NO. 1579 /MUM/2016. THE HON'BLE ITAT HAS DIRECTED THE A.O TO REDUCE THE GROSS PROFIT REFLECTED BY THE APPELLANT I N ITS RETURN OF INCOME OUT OF THE ESTIMATED GROSS PROFIT. TH E RELEVAN T PART OF THE HON'BLE JUDGEMENT IS AS UNDER: '2.8 IF THE RATIO LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT IN THE AFORESAID CASE OF M/S NIKUNJ EXIMP ENTERPRISES PVT. LTD. (SUPRA) IS ANALYSED WITH THE FACTS OF THE PRESENT APPEAL, IT IS NOTED THAT THE ASS ESSEE DECLARED TOTAL INCOME OF RS 5,62,746/ - IN ITS RETURN FILED ON 29.09.2009. AS PER THE REVENUE, THE ASSESSEE ACCEPTED THE BOGUS PURCHASES BILLS FROM SUCH 'PROVIDERS. THE LD. ASSESSING OFFICER HAS MENTIONED THE NAME OF THE PARTIES IN THE ASSESSMENT ORDER. NOTICE U/S 147 WAS ISSUED TO THE ASSESSEE AGAINST WHICH OBJECTIONS WERE RAISED VIDE LETTER DATED 09.01.2015. THE ASSESSEE VIDE FURTHER LETTER DATED 16.02.2015, SUBMITTED THE NECESSARY DETAILS BY CLAIMING THAT THE ASSESSEE IS HAVING ONLY ONE CUSTOMER I.E. 'D - MART' AND ITS BRANCHES. IT WAS ALSO CLAIMED THAT THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE ONLY AND THE RECEIPT AND CORRESPONDING DELIVERY OF GOODS TO THE SHOPPING MALL IS DULY REFLECTED IN THE STOCK REGISTERED AS INWARD AND OUTWARD OF G OODS. CONSIDERING THE AFORESAID DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT AND RATIO LAID DOWN THEREIN, SINCE, THE ASSESSEE IS A WHOLESALE TRADER OF GOODS AND HAS ALREADY DECLARED 7.92% AS A GROSS PROFIT, TO PLUG THE LEAKAGE OF REVENUE, WE DEEM IT APP ROPRIATE TO ADOPT THE GROSS PROFIT AT THE RATE OF 9% MINUS THE ALREADY DECLARED GROSS PROFIT AGAINST 12% ADOPTED BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA L ), RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED.' RESPECTFULLY FOLLOWING JUDGEMENT OF HON'BLE ITAT, A.O IS DIRECTED TO REDUCE THE GROSS PROFIT DISCLOSED BY THE APPELLANT OUT OF 12% GROSS PROFIT ESTIMATED BY THE LD. A.O. 7. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD.CIT(A) AND THE REASONS GIVEN THER EIN, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE 6 ITA NO. 6662/MUM/2019 (A.Y: 2010 - 11) SMT BHAVNA SUNIL JOSHI LD.CIT(A) IN RESTRICTING THE ADDITION /DISALLOWANCE TO THE EXTENT OF 7.79 % OF THE PURCHASES . GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 02 .09.2021 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - (MANOJ KUMAR AGGARWAL) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 02 / 09 / 2021 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM