ITO 4 (3)(3), MUMBAI V. M/S VASA ALUMINIUM PVT LTD., MUMBAI

ITA 6731/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7937 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Tangible material; Accommodation entries; Reassessment proceedings
• Section: 143(1); 147; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) SMC BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO S . 6730 & 6731 /MUM/201 9 ( A.Y S . 2009 - 10 & A.Y. 2010 - 11 ) INCOME TAX OFFICER 4 ( 3 )( 3 ) ROOM NO. 637, 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400020 V. M/S. VASA ALUMINIUM PVT. LTD., SHOP NO. O NEW JAWAHAR MANSION DR. BABASAHEB JAYKAR MARG THAKURDWAR ROAD MUMBAI - 400002 PAN: AABCV1030D ( A PPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY SHRI SANJAY J. SETHI DATE OF HEARING : 14.07.2021 DATE OF PRONOUNCEMENT : 14.07.2021 O R D E R PER C.N. PRASAD (JM) 1. THESE APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDER S OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 27.08.2019 FOR THE A.Y. 2009 - 10 AND A.Y. 2010 - 11 IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE ADDITION/DISALLOWANCE TO 5% OF THE NON - GENUINE PURCH ASES AS AGAINST 10% MADE BY THE ASSESSING OFFICER. 2 ITA NOS. 6730 & 6731/MUM/2019 (A.YS. 2009 - 10 & A.Y. 2010 - 11) M/S. VASA ALUMINIUM PVT. LTD., 2. BRIEFLY STATED THE FACTS ARE THAT, ASSESSEE ENGAGED IN THE BUSINESS OF TRADING IN PVC PROFILES AND EXTRUSIONS AND ALLUMINIUM EXTRUDED SECTIONS AND ITS ACCESSORIES, FILED RETURN OF INCOME ON 30.09.2009 AND 21.10.2010 DECLARING INCOME OF . 5,06,523 / - AND . 4,37,722 / - FOR THE A.Y .2009 - 10 AND A.Y. 2010 - 11 RESPECTIVELY, AND THE RETURNS WERE PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT AND DGIT (INV.,), MUMBAI ABOUT THE ACCOMMODATION ENTRIES PROVIDED BY VARIOUS DEALERS AND ASSESSEE WAS ALSO ONE OF THE BENEFICIARY FROM THOSE DEALERS. THE ASSESSMENTS WERE REOPENED U/S. 147 OF THE ACT BASED ON THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT AND DGIT(INV.), MUMBAI, THAT THE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES FROM VARIOUS DEALERS WHO ARE SAID TO BE PROVIDING ACCOMMODATION ENTRIES WITHOUT THERE BEING TRANSPORTATION OF ANY GOODS. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRE D TO PROVE THE GENUINENESS OF THE PURCHASES MADE FROM VARIOUS PARTIES REFERRED IN ASSESSMENT ORDER. IN RESPONSE A SSESSEE VIDE LETTER DATED 13.03.2015 SUBMITTED THAT THE PURCHASES MADE ARE GENUINE . ASSESSEE FURTHER SUBMITTED THAT THE PAYMENTS ARE MADE THR OUGH ACCOUNT PAYEE CHEQUES AS SUCH CONTENDED THAT ALL THE PURCHASES ARE GENUINE. 3 ITA NOS. 6730 & 6731/MUM/2019 (A.YS. 2009 - 10 & A.Y. 2010 - 11) M/S. VASA ALUMINIUM PVT. LTD., 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 ACCOMMO DATION ENTRIES WITHOUT THERE BEING ANY TRANSPORTATION OF MATERIALS AND THE ASSESSEE MIGHT HAVE MADE PURCHASES IN THE GRAY MARKET. IT IS THE FINDING OF THE ASSESSING OFFICER THAT IN THE ASSESSEE MUST HAVE PROCURED THE GOODS FROM SOMEWHERE ELSE AND INTRODUC ED THE GOODS IN ITS BOOKS OF ACCOUNTS BY OBTAINING ACCOMMODATION ENTRIES. THEREFORE, ASSESSING OFFICER ESTIMATED 10% OF THE PROFIT EARNED BY THE ASSESSEE ON THE PURCHASES MADE FROM THE DEALERS AND ADDED AN AMOUNT OF . 8,39,178/ - AND . 3,87,637 / - FOR THE A.Y.2009 - 10 AND A.Y. 2010 - 11 RESPECTIVELY . ON APPEAL THE LD.CIT(A) CONSIDERING THE EVIDENCES AND VARIOUS SUBMISSIONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION/DISALLOWANCE TO 5% OF THE NON - GENUINE PURCHASES. 4. IN SPITE OF ISSUE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS SOUGHT . THEREFORE, I PROCEED TO DISPOSE OFF THESE APPEAL S ON MERITS ON HEARING THE LD.DR. 5. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. ON A PERUSAL OF THE ORDE R OF THE LD.CIT(A), WE FIND THAT THE LD.CIT(A) 4 ITA NOS. 6730 & 6731/MUM/2019 (A.YS. 2009 - 10 & A.Y. 2010 - 11) M/S. VASA ALUMINIUM PVT. LTD., CONSIDERED THIS ASPECT OF THE MATTER ELABORATELY WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE AVERMENTS IN THE ASSESSMENT ORDER AND CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE ADDITION @5% OF THE SUSPICIOUS PURCHASES. WHILE HOLDING SO, THE LD.CIT(A) FOR A.Y. 2009 - 10 OBSERVED AS UNDER: - 4.3 I HAVE CONSIDERED THE AO'S ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. I FIND THAT TH E CASE WAS RE - OPENED ON THE BASIS OF TANGIBLE MATERIAL RECEIVED BY WAY OF INFORMATION FROM THE SALES TAX DEPARTMENT IN RESPECT OF THE PURCHASES MADE BY THE APPELLANT FROM SIX PARTIES PROVIDING ACCOMMODATION BILLS AGGREGATING TO RS.83,91,783/ - . THE AO HAS HE LD THAT THE APPELLANT HAS FAILED TO PROVE THE GENUINENESS OF THE SAID PURCHASE TRANSACTIONS BY PRODUCING THE ABOVE SAID PARTIES. THE. AO HAS ESTIMATED THE PROFIT ELEMENT ON SUCH PURCHAS E AGGREGATING TO RS.839178/ - @ 10% AT RS.83,9 1,783 / - ALTHOUGH, IT HAS BEEN OBSERVED IN THE ASSESSMENT ORDER THAT THE INFLATION IN PURCHASE, AS PER THE SAID BILLS WOULD BE ON ACCOUNT OF PURCHASE OF SAID GOODS FROM SOME OTHER PARTIES AND OBTAINING THE ACCOMMODATION BILLS FROM THE ABOVE SAID PARTIES. THE APPE LLANT HAS SUBMITTED THAT VAT WAS CHARGED @ 4% IN RESPECT OF THE SAID PURCHASES. IN THE PRESENT FACTS AND CIRCUMSTANCES, I FIND THAT THE ESTIMATION OF ADDITION @ 10% IS ON THE HIGHER SIDE AND WITHOUT PROPER BASIS. CONSIDERING THE PREVAILING RATE OF VAT CHAR GED IN RESPECT OF ALUMINIUM EXTRUDED PROFILES I.E THE ITEM PURCHASED FROM THE ABOVE SAID HAWALA PARTIES, THE ADDITION IS ESTIMATED @ 5% OF THE SUSPICIOUS PURCHASES. ACCORDINGLY, THE ADDITION MADE BY THE AO IS RESTRICTED TO RS.419,590/ - AND THE BALANCE ADDIT ION IS DELETED. GROUND NO.1 IS PARTLY ALLOWED. 6. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD.CIT(A) AND THE REASONS GIVEN THEREIN, I DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A) IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE ADDITION T O 5% 5 ITA NOS. 6730 & 6731/MUM/2019 (A.YS. 2009 - 10 & A.Y. 2010 - 11) M/S. VASA ALUMINIUM PVT. LTD., OF THE SUSPICIOUS PURCHASES . GROUNDS RAISED BY THE REVENUE ARE DISMISSED FOR BOTH THE ASSESSMENT YEARS. 7. IN THE RESULT, BOTH APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE VIRTUAL COURT ON 14.07.2021 SD/ - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 14 / 0 7 / 2021 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 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