ITO 24 (1)(5), MUMBAI V. SHRI. DEVDAS MANJAYYA SHERUGAR, MUMBAI

ITA 6893/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4058 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 08-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JOSHI LD
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6893/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) IT O - 24(1)(5) 607, PIRAMAL CHAMBERS JEEJEEBHOY LANE, LALBAUG MUMBAI 400 012 / VS. SHRI DEVDAS MANJAYYA SEHRUGA R GALA NO.9, ARK IND. PREMISES CSL MAKWANA ROAD, ANDHERI EAST MUMBAI 400 059 PAN NO. : AA YPS - 4717 - Q ( !' /APPELLANT ) : ( #$!' / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI RAJENDRA JOSHI LD. SR. DR / DATE OF HEARING : 25/05/2021 / DATE OF PRONOUNCEMENT : 01/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 2010-11 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-36, MUMBAI [IN SHORT CIT(A) ] DATED 26/08 /2019 WHICH HAS PROVIDED CERTAIN RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATE RIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT FRAMED BY LD. AO. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN MANUFACTURING OF ENGINEERIN G GOODS CONSISTING OF MOLDS, DIES ETC. WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 26/02/2016. THE ORIGINAL RETUR N FILED BY ASSESSEE WAS PROCESSED U/S 143(1). HOWEVER, PURSUANT TO RECE IPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT , MUMBAI, IT TRANSPIRED THAT THE ASSESSEE MADE ALLEGED BOGUS PUR CHASES OF RS.52.00 LACS FROM NINE ENTITIES AS DETAILED IN THE ASSESSME NT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FILE REQUISITE DETAILS TO SUBSTANTIATE THE PURCHASES. 3.2 IN SUPPORT OF PURCHASES, THE ASSESSEE FURNISHED COPIES OF PURCHASE BILLS, MONTHLY DETAILS OF SALE & PURCHASE ALONG WITH BANK STATEMENTS EVIDENCING PAYMENT THROUGH BANKING CHANN ELS. HOWEVER, NOTICES ISSUED U/S 133(6) DID NOT ELICIT SATISFACTO RY RESPONSE. THE ASSESSEE COULD NOT PRODUCE ANY OF THE SUPPLIERS FOR CONFIRMATION OF TRANSACTIONS. THE LD. AO, AFTER CONSIDERING ENTIRE FACTUAL MATRIX AS WELL AS IN THE BACKGROUND OF VARIOUS JUDICIAL PRONOUNCEM ENTS, MADE AGGREGATE DISALLOWANCE OF RS.41.34 LACS WHICH HAS B EEN WORKED OUT IN PARA-13 OF THE ORDER. THE DISALLOWANCE WAS MADE @10 0% AGAINST 8 PARTIES WHEREAS THE DISALLOWANCE AGAINST ONE PARTY WAS ESTIMATED @25%. IN THE ALTERNATIVE, LD. AO PROPOSED DISALLOWA NCE OF RS.34.21 LACS U/S 40(A)(3) WHICH REPRESENT PURCHASES MADE FR OM SEVEN ENTITIES SINCE THE ASSESSEE WOULD HAVE MADE PAYMENT OUT OF S OURCES BEST KNOWN TO HIM. 3 4. THE LD. CIT(A), INTER-ALIA, CONSIDERING THE DECI SION OF HONBLE GUJARAT HIGH COURT IN SIMIT P.SHETH V/S CIT (2012; 356 ITR 451), ESTIMATED THE ADDITION OF 25% ON AGGREGATE PURCHASE S OF RS.52 LACS. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE SALES TURNOVER WAS NO T IN DOUBT AND THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCU MENTS. THE PAYMENT TO THE SUPPLIERS WAS THROUGH BANKING CHANNE LS. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE FACTS OF THE CAS E MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANS ACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMI SSIONS AS WELL AS MATERIAL ON RECORD, ESTIMATED THE ADDITIONS @ 25% WHICH IS MORE THAN ENOUGH TO TAKE CARE OF THE LEAKAGE OF REVENUE. THER EFORE, THE ESTIMATION COULD NOT BE TERMED AS UNJUSTIFIED, IN ANY MANNER. FINDING NO REASON TO INTERFERE IN THE IMPUGNED ORDER, WE DISMISS THE APP EAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 01 ST JUNE, 2021 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 01/06/2021 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +,#&- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE 4 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.