ITO 27 (2)(5), MUMBAI V. PIYUSH D. GADA, MUMBAI

ITA 6830/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6839 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , C BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI PAVAN KUMAR GADALE , JM ITA NO. 6830 /MUM/ 20 18 ( ASSESSMENT YEAR : 20 08 - 09 ) ITO - 27(2)(5) ROOM NO.421, 4 TH FLOOR TOWER NO.6, VA SHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI - 400703 VS. SHRI PIYUSH D GADA FLAT NO.502, ANITA KUTIR CHS LTD. 90 FEET ROAD, GHATKOPAR (E) MUMBAI 400 075 PAN/GIR NO. ABRPG2822J (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI AMIT PRATAP SINGH ASSESSEE BY NONE DATE OF HEARING 09 / 09 /2020 DATE OF PRONOUNCEMENT 10 / 09 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6830/MUM/2018 FOR A.Y. 2008 - 09 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) - 25, VASHI, NAVI MUMBAI IN APPEAL NO. CIT(A) - 25/IT - 268/2015 - 16/280 DATED 12/09/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO ITA NO . 6830/MUM/2018 SHRI PIYUSH D GADA 2 AS ACT) BY THE LD. INCOME TAX OFFICER 27(2)(5) (HEREINAFTER REFERRED TO AS LD. AO). 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF BOGUS PURCHASES IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3. WE HAVE HEARD LD. DR. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE FIND THAT THE ASSESSEE IS AN INDIVIDUAL, RUNNING A PROPRIETARY CONCERN IN THE NAME AND STYLE OF M/S. PACKAGE ENGAGED IN MANUFACTURING OF CORRUGATED BOXES. DURING TH E COURSE OF RE - ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED COPY OF BILLS OF PURCHASES AND BANK STATEMENT SHOWING THE PAYMENTS MADE TO THE PARTY FROM WHOM PURCHASES HAD BEEN MADE AND SUBMITTED THAT THE PURCHASES SHOWN BY THE ASSESSEE FROM THE SAID PARTY ARE GENUINE PURCHASES. 3.1. WE FIND THAT ASSESSEE HAD MADE PURCHASES FROM M/S ARUN PAPER AND IRON INDUSTRIES TO THE EXTENT OF RS 53,49,029/ - WHOSE NAME APPEARED IN THE TAINTED LIST OF HAWALA DEALERS IN THE WEBSITE OF SALES TAX DEPARTMENT, GOVERNMENT OF MAHAR ASHTRA AND PURSUANT TO THAT INFORMATION, THE LD. AO SOUGHT TO TREAT THE PURCHASES MADE FROM THE SAID SUPPLIERS AS BOGUS . THE ASSESSEE PRODUCED THE DETAILS OF SALES MADE OUT OF CORRESPONDING PURCHASES WHICH WAS NOT DOUBTED BY THE LD. AO. ON PERUSAL OF LED GER ACCOUNT FILED BY THE ASSESSEE, IT IS FOUND THAT THE ACTUAL PURCHASES FROM M/S. ARUN PAPER AND IRON TRADERS, DURING THE YEAR UNDER CONSIDERATION IS RS.75,74,618/ - . THE LD. AO ISSUED NOTICE U/S.133(6) OF THE ACT TO THE CONCERNED SUPPLIER M/S. ARUN PAPER AND IRON TRADERS CALLING FOR VARIOUS DETAILS . THE CONCERNED SUPPLIER APPEARED BEFORE THE ITA NO . 6830/MUM/2018 SHRI PIYUSH D GADA 3 LD. AO IN RESPONSE TO NOTICE U/S.133(6) OF THE ACT AND FURNISHED THE FOLLOWING DETAILS BEFORE HIM : - LEDGER ACCOUNT OF THE ASSESSEE IN HIS BOOKS OF ACCOUNT EXTRACT OF BANK STATEMENT HIGHLIGHTING SPECIFIC TRANSACTION WITH THE PARTY SALES BILL COPY AND DELIVERY CHALLAN SALES TAX CHALLAN & RETURN ITR RETURN WITH ALL ANNEXURE 3.2 . DESPITE THE FACT OF THE SUPPLIER GIVING EVIDENCE OF DELIVERY OF GOODS TO THE LD. AO AND ALSO CONFIRMING THE ENTIRE TRANSACTIONS MADE WITH THE ASSESSEE, THE LD. AO FOUND LOT OF DEFICIENCIES IN THE DOCUMENTS SUBMITTED BY THE CONCERNED SUPPLIER BEFORE HIM AND IN VIEW OF THE FACT THAT ASSESSEE HAD MADE SALES OUT OF SUCH PURCHASES, HE CONCLUDED THAT T HE ASSESSEE IN THE INSTANT CASE COULD HAVE MADE PURCHASES ONLY FROM GREY MARKET AND HAD MADE SALES THEREON. ACCORDINGLY, HE PROCEEDED TO ESTIMATE THE PROFIT EMBEDDED IN SUCH BOGUS TRANSACTIONS @12.5% AND MADE ADDITION OF RS. 9,46,827/ - IN THE ASSESSMENT. 3 .3. WE FIND THAT THE LD. CIT(A) HAD DELETED THE ENTIRE DISALLOWANCE ON THE GROUND THAT THE SUPPLIER HAD DULY CONFIRMED THE ENTIRE TRANSACTION THAT WAS CARRIED OUT WITH THE ASSESSEE BEFORE THE LD. AO IN PERSON . IN THAT SCENARIO , WE FIND THAT THERE IS NO DIS PUTE THAT THE SUPPLIER HAD MADE HIMSELF PRESENT BEFORE THE LD. AO IN PERSON IN RESPONSE TO NOTICE U/S.133(6) OF THE ACT AND HAD SUBMITTED THE NECESSARY DOCUMENTS. IN CASE IF THE LD. AO FINDS SOME DEFICIENCIES IN THE SUBMISSION OF THOSE DOCUMENTS BY THE SUP PLIER, THEN IT IS FOR THE LD. AO TO CONFRONT THE SAID SUPPLIER AND NOT MERELY DISALLOW THE PURCHASE MADE BY THE ASSESSEE. ITA NO . 6830/MUM/2018 SHRI PIYUSH D GADA 4 THERE IS NO DISPUTE THAT SALES HAVE BEEN MADE OUT OF THE CORRESPONDING PURCHASES. THERE IS NO DISPUTE THAT PROOF OF DELIVERY OF GOODS TOGETHER WITH ALL THE RELEVANT DOCUMENTS HAD BEEN SUBMITTED DIRECTLY BY THE SUPPLIER BEFORE THE LD. AO. IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE LD. CIT(A) ACCEPTING THE CLAIM OF THE ASSESSEE AND DELETING THE DISALLOWANCE M ADE ON ACCOUNT OF BOGUS PURCHASES. ACCORDINGLY, THE GROUND S RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 10 / 09 /2020 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( PAV AN KUMAR GADALE ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 10 / 09 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE C IT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// ITA NO . 6830/MUM/2018 SHRI PIYUSH D GADA 5