ITO WD 2(4), KALYAN V. SANTOKSINGH M GULWAN, ULHASNAGAR

ITA 6723/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9228 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 17-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO.6723/MUM/2016 SANTOKSINGH M GULWAN ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.6723/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER WARD 2(4) 2 ND FLOOR, MOHAN PLAZA WAYLE NAGAR, KHADAKPADA, KALYAN KALYAN-421 301 / VS. SANTOKSINGH M GULWAN PROP. SATGURU TRADERS BK NO.63/673, GROUND FLOOR, NEAR SATNAM B. APARTMENT, GOL MAIDAN, ULHASNAGAR 421 001 '# ./ ./ PAN/GIR NO.ABKPG-7891-E ( #% /APPELLANT ) : ( &#% / RESPONDENT ) REVENUE BY : POOJA SWAROOP, LD. DR ASSESSEE BY : NONE / DATE OF HEARING : 19/09/2017 / DATE OF PRONOUNCEMENT : 04 /10/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2009-10 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-3 2 ITA NO.6723/MUM/2016 SANTOKSINGH M GULWAN ASSESSMENT YEAR 2009-10 [CIT(A)], THANE, APPEAL NO. 192-THN/15-16 DATED 22/ 08/2016 QUA RELIEF PROVIDED TO THE ASSESSEE AGAINST CERTAIN BOGUS PURCHASES. THE ASSESSMENT WAS FRAMED BY LD. INCOME TAX OFFICER, WA RD 2(1), KALYAN U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT ON 05/03/2015. NONE HAS APPEARED FOR ASSESSEE DESPITE NOTICE. LEFT WITH NO OPTION, WE DISPOSE- OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING OF PLYWOOD UNDER PROPRIETORSHIP CONCERN NAMELY SATGURU TRADERS WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 05/03/2015 AT RS.1,96,98,960/- AFTER ADDITION OF CE RTAIN BOGUS PURCHASES FOR RS.1,92,73,078/-. THE ORIGINAL RETURN WAS FILED ON 30/09/2009 AT RS.4,25,880/- WHICH WAS PROCESSED U/S 143(1). THE S OLITARY ISSUE INVOLVED IN THE APPEAL IS ADDITION AGAINST BOGUS PURCHASES . 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.1,92,73,078/- FROM EIGHT SUCH PARTIES. CONSEQUENTLY, NOTICE U/S 1 48 DATED 29/04/2013 WAS ISSUED TO THE ASSESSEE WHICH WAS FOLLOWED BY ST ATUTORY NOTICES U/S 143(2) AND 142(1). THE ASSESSEE REFLECTED TURNOVER OF RS.215.23 LACS WITH GP / NP RATES OF 2.37% & 2.21% RESPECTIVELY. 3 ITA NO.6723/MUM/2016 SANTOKSINGH M GULWAN ASSESSMENT YEAR 2009-10 2.3 THE ASSESSEE CONTENDED THAT THE PURCHASES TRANS ACTIONS WERE GENUINE. HOWEVER, NOTICES SENT U/S 133(6) TO THE ALLEGED BOGUS SUPPLIER REMAINED UN-SERVED BY THE POSTAL AUTHORITIES, WHICH LED THE LD. AO TO DISBELIEVE THE SAID TRANSACTIONS AND HE ACCORDINGLY , ADDED THE SAME 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 24/08/2 016 WHERE THE ASSESSEE INTER-ALIA SUBMITTED INVOICE COPIES, BANK STATEMENTS, LEDGER EXTRACTS, BILL WISE DETAILS OF PURCHASES AND CORRES PONDING SALES BILLS, COMPARATIVE TURNOVER / PROFITABILITY CHART FOR THRE E YEARS & TAX AUDIT REPORT ETC. TO SUBSTANTIATE THE PURCHASES TRANSACTIONS. AF TER APPRECIATING THE SAME, LD. CIT(A) RESTRICTED THE IMPUGNED ADDITIONS TO 15% OF THESE ALLEGED BOGUS PURCHASES WHICH WORKED OUT TO RS.28,90,962/-. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DR PLACING RELIANCE ON THE STAND OF LD. AO DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE FAILED TO S UBSTANTIATE THE DELIVERY OF MATERIAL AND RIGHTLY BEEN SADDLED WITH FULL DISALLO WANCE. THE LD. DR FURTHER SUBMITTED THAT NOTICE SENT U/S 133(6) WAS RETURNED BACK UN-SERVED AND THE ASSESSEE COULD NOT PRODUCE ANY OF THE SAID PARTY TO CONFIRM THE TRANSACTION AND THEREFORE, FAILED TO DISCHARGE THE ONUS CASTED ON HIM. 5. WE HAVE HEARD THE CONTENTIONS AND PERUSED RELEVA NT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SALE 4 ITA NO.6723/MUM/2016 SANTOKSINGH M GULWAN ASSESSMENT YEAR 2009-10 WITHOUT PURCHASE OF MATERIAL KEEPING IN VIEW THE AS SESSEES NATURE OF BUSINESS WHICH WAS TRADING IN PLYWOOD. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS WERE THROUGH BANKING CHANNELS. THE PURCHASES WERE BACKED BY INVOICES. AT THE SAME TIME, THE ASSESSEE COULD NOT PRODUCE THE PARTY FOR CONFIRMATION AND NOTICES SENT U/S 133(6) REMAINED UN-SERVED , WHICH CAST SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, T HE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHT LY DONE. THEREFORE, FINDING THE SAME TO BE QUITE FAIR & REASONABLE, WE FIND NO REASON TO INTERFERE WITH THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04 .10.2017 SR.PS:- THIRUMALESH 5 ITA NO.6723/MUM/2016 SANTOKSINGH M GULWAN ASSESSMENT YEAR 2009-10 / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT 3. . ( ) / THE CIT(A) 4. . / CIT CONCERNED 5. (0 , 0 , / DR, ITAT, MUMBAI 6. 12 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI