ACIT- 19 (2), MUMBAI V. NEW LOOK BRASSIERE CO., MUMBAI

ITA 6906/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0928 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Bogus purchase
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 6906/MUM/2018 ASSESSMENT YEAR : 2010-11 THE ASST. COMMISSIONER OF INCOME TAX-19(2), MUMBAI VS. M/S.NEW LOOK BRASSIERE CO., 204, J.S.S.ROAD, GIRGAUM, MUMBAI [PAN : AAAFN1454B] (APPELLANT) (RESPONDENT) C.O NO. 264/MUM/2019 (ARISING OUT OF ITA NO.6906/MUM/2018) ASSESSMENT YEAR : 2010-11 M/S.NEW LOOK BRASSIERE CO., 204, J.S.S.ROAD, GIRGAUM, MUMBAI [PAN : AAAFN1454B] VS. THE ASST. COMMISSIONER OF INCOME TAX-19(2), MUMBAI (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R.BHOOPATHI, DR ASSESSEE BY : MISS. DINKLE HARIYA, AR DATE OF HEARING : 1 7 - 12 - 201 9 DATE OF PRONOUNCEMENT : 20 - 12 - 201 9 O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-29, MUMBA I, DATED 07-09-2018 FOR THE AY.2010-11. THE ASSESSEE HA S FILED CROSS-OBJECTIONS, ASSAILING THE ORDER OF CIT(A). 2. THE CROSS-OBJECTIONS OF THE ASSESSEE ARE TIME BARRE D BY 14 (FOURTEEN) DAYS. THE ASSESSEE HAS FILED APPLICATIO N EXPLAINING REASONS CAUSING DELAY IN FILING OF ITA NO. 6906/MUM/2018 C.O.NO.264/MUM/2019 : 2 : CROSS-OBJECTIONS. AFTER EXAMINING THE SAME, WE ARE S ATISFIED THAT THE DELAY IN FILING OF CROSS-OBJECTIONS IS NOT DELI BERATE AND THE DELAY HAS OCCURRED DUE TO BONAFIDE REASONS EX PLAINED IN APPLICATION. THE DELAY OF 14 DAYS IN FILING OF C ROSS- OBJECTIONS IS CONDONED. THE CROSS-OBJECTIONS ARE ADM ITTED TO BE HEARD ON MERITS ALONGWITH THE APPEAL OF REVENUE. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECOR DS ARE: THE ASSESSEE FIRM IS A MANUFACTURER AND DEALER OF BRASSIERS AND READY-MADE GARMENTS. ON THE BASIS OF THE INFORMATION RECEIVED FROM DGIT (INV.), MUMBAI, THE ASSESSMENT OF ASSESSEE FOR THE AY.2010-11 WAS RE-OPEN ED. IN RE-ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) HELD THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCH ASE BILLS FROM THE FOLLOWING HAWALA DEALERS AGGREGATING TO RS.8,70,548/- : S.NO NAME OF THE HAWALA PARTY BILL AMOUNT RS. 1 HEMAL ENTERPRISES 41,848 2 SHREE SARASVATI ENTERPRISES 78,930 3 RIDDHI ENTERPRISES 79,185 4 SNEHAL ENTERPRISES 2,21,531 5 SEVA ENTERPRISES 83,699 6 KALPTARU TRADING CO., 3,65,355 TOTAL RS. 8,70,548 ACCORDINGLY, THE AO MADE AN ADDITION OF RS.8,70,548/ - VIDE ORDER DT.15-02-2016 PASSED U/S.143(3) R.W.S.147 OF TH E INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). ITA NO. 6906/MUM/2018 C.O.NO.264/MUM/2019 : 3 : 4. THE CIT(A) VIDE IMPUGNED ORDER, PARTLY ALLOWED THE APPEAL OF ASSESSEE AND RESTRICTED ADDITION TO 12.5% OF THE ALLEGED BOGUS PURCHASES. AGAINST THE ORDER OF FIRST APPELLATE AUTHORITY (FAA), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. IN THE CROSS-OBJECTIONS, THE ASSESSEE HAS ASSAILED THE ORDER OF CIT(A) IN CONFIRMING THE VALIDITY OF RE-ASS ESSMENT PROCEEDINGS AS WELL AS CONFIRMING THE ADDITION TO THE EXTENT OF 12.5% OF THE ALLEGED BOGUS PURCHASES. 6. SHRI R.BHOOPATHI, REPRESENTING THE DEPARTMENT, VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD.DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE GENUINENESS OF THE PURCHASES. THE ASSESSEE FAILED TO PRODUCE DEALERS/AGENTS FROM WHOM PURCHASES WERE MADE AND ALS O FAILED TO FURNISH COPIES OF TRANSPORT AND OCTROI BILLS. THUS, THE ASSESSEE COULD NOT ESTABLISH TRIAL OF GOODS ORIGINATING FROM SUPPLIERS TO THE GODOWN OF THE ASSESSEE. THE LD.DR PR AYED FOR MODIFYING THE ORDER OF CIT(A) AND CONFIRMING THE ENTIR E BOGUS PURCHASES AS ADDITION. 7. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HA D FURNISHED ALL THE DETAILS EVIDENCING PURCHASES BEFORE THE AUTHORITIES BELOW. HOWEVER, WITHOUT EXAMINING THE SAM E, THE AO MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES . THE ASSESSEE HAD MADE PAYMENTS FOR ALL PURCHASES THROUGH BANKING CHANNELS AND ALL THE INVOICES FROM THE ALLEGE D SUSPICIOUS DEALERS WERE FURNISHED BEFORE THE AUTHORITI ES BELOW. THE ESTIMATION OF GP AT 12.5% OF ALLEGED BOGUS ITA NO. 6906/MUM/2018 C.O.NO.264/MUM/2019 : 4 : PURCHASES BY CIT(A) IS UN-JUSTIFIED IN THE LIGHT OF DOCUMENTARY EVIDENCE. 8. THE SUBMISSIONS MADE BY RIVAL SIDES HEARD AND THE ORDERS OF THE AUTHORITIES BELOW PERUSED. THE SALES MAD E BY THE ASSESSEE HAVE NOT BEEN DISPUTED BY THE REVENUE. THEREFORE, THE ENTIRE ALLEGED BOGUS PURCHASE CANNOT BE ADDED BACK. WITHOUT PURCHASES, THERE CANNOT BE SALES. IN THE GIVEN FACTS OF THE CASE, IT APPEARS THAT THE ASSESSEE HAS MADE PURCHASES FROM GREY MARKET AND THEREAFTER, OBTAINED BILLS FROM ALLEGED HAWALA OPERATORS. THE FAA HAS RESTRICTED THE ADDITION TO 12.5% OF THE ALLEGED BOGUS PURCHASES. I C ONCUR WITH THE FINDINGS OF CIT(A) THAT IN THE GIVEN FACTS ENTIR E ALLEGED BOGUS PURCHASES CANNOT BE ADDED. 9. THE ASSESSEE IS A TRADER. IN MY CONSIDERED OPIN ION, THE ADDITION OF 12.5% OF THE ALLEGED BOGUS PURCHASES IS O N THE HIGHER SIDE. TAKING INTO CONSIDERATION ENTIRETY OF FA CTS AND TO MEET THE ENDS OF JUSTICE RESTRICTING ADDITION TO GP @6% OVER AND ABOVE THE GP DECLARED BY THE ASSESSEE ON ALLEGED BOGUS PURCHASES WOULD BE JUST AND FAIR. I HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, THE APPEAL OF REVENUE IS DISMISSED AND GROUND NO.2 RAISED BY ASSESSEE IN THE CROSS- OBJECTIONS, IS PARTLY ALLOWED IN TERMS AFORESAID. 10. IN GROUND NO.1, THE ASSESSEE HAS ASSAILED VALIDI TY OF RE-ASSESSMENT PROCEEDINGS. NO MEANINGFUL ARGUMENTS WE RE MADE BY THE LD.AR OF THE ASSESSEE IN THIS REGARD. THER EFORE, GROUND NO.1, RAISED BY ASSESSEE IN THE CROSS-OBJECTIO NS, IS DISMISSED. ITA NO. 6906/MUM/2018 C.O.NO.264/MUM/2019 : 5 : 11. IN THE RESULT, THE CROSS-OBJECTION OF ASSESSEE IS P ARTLY ALLOWED, IN TERMS AFORESAID. 12. TO SUM-UP, THE APPEAL OF REVENUE IS DISMISSED AN D THE CROSS-OBJECTIONS OF ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 20 TH DAY OF DECEMBER, 2019 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER /MUMBAI; /DATED : 20-12-2019 TNMM / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE ITA NO. 6906/MUM/2018 C.O.NO.264/MUM/2019 : 6 : # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI