SANDEEP DHIRAJLAL DOSHI, MUMBAI V. ASST CIT 25(1), MUMBAI

ITA 691/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0167 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Assessee Lawyers: BAHVIN PAREKH
• Keywords: Bogus purchase; Principle of natural justice; Accommodation entries
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.691/MUM./2017 ( ASSESSMENT YEAR : 2009 - 10 ) SANDEEP DHIRAJLAL DOSHI, B/7 VIMAL APERTMENTS, 2 ND FLOOR, JUHU LANE, ANDHERI (W) MUMBAI 400002 PAN AGPPD1644N . APPELLANT V/S ACIT 25(1) R.NO. 711, 7 TH FLOOR, C - 12, PRATYAKSHKAR BHAVAN, BKC BANDRA (E) MUMBAI 400051 . RESPONDENT ASSESSEE BY : SHRI BAHVIN PAREKH REVENUE BY : SHRI V. JANARDHANAN DATE OF HEARING 03.07.2017 DATE OF ORDER 04 .09.2017 O R D E R PER:SHAMIM YAHYA THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LD. CIT - A DATED 21.01.2015 AND PERTAIN TO ASSESSMENT YEAR 2009 - 10. 2. THE ISSUE RAISED IS THAT CIT - A ERRED IN SUSTAINING DISALLOWANCE OF BOGUS PURCHASE AMOUNTING TO RS. 14,27,806/ - 3. THE GROUNDS OF APPEAL READ AS UNDER; 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF COME TAX, APPEALS - 37, MUMBAI, HEREINAFTER REFERRED TO AS THE LD. CIT (A). HAS ERRED IN MAKING ADDITION OF PURCHASE OF RS.14,27,807 / - . THE SAID ADDITION IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND AS PER FACTS OF THE CASE. THE SAID SANDEEP DHIRAJLAL DOSHI ITA NO.691/MUM./2017 2 ADDITION MAY PLEASE BE DELETED. THE SAID CLAIM IS PROPER, AUTHENTIC, GENUINE AND IN ACCORD ANCE WITH THE PROVISIONS OF THE LAW. 2. WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, THE METHOD OF ADDITION ADOPTED BY THE LD . AO OF TAKING THE AMOUNT AS 12.5 % OF SUCH PURCHASES IS NOT PROPER. THE SAID ADDITION MAY BE TAKEN AT THE AVERAGE GP %. 3. W ITHOUT PREJUDICE TO THE ABOVE, THE ASSESSMENT ORDER PASSED BY THE LAO NEEDS TO BE ANNULLED AS THE SAME HAS BEEN PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE 4. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DROP THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. IN THIS CASE THE A.O OBSERVED THAT INTIMATION VIDE LETTER BEARING NO. DGIT(INV)/CORR.FIELD/2013 - 14 DATED 26.12.2013 WAS RECEIVED IN THIS OFFICE FROM THE DIRECTOR GENERAL OF INCOME TAX(INV.), MUMBAI THAT THE ASSESSEE HAD ENTERED INTO HAWALA TRANSACTION FOR PURCHASES AMOUNTING TO RS.1,14,22,452/ - FROM THE BELOW PARTIES. SL.NO. NAME OF THE SUPPLIER TIN AMT. OF BILL TAKEN BY YOU 1. ATLAS ENTERPRISE 27710363744V 26,61,771 2. OMKAR TRADING CO . 27600606547V 30,83,229 3. KRC TRADING CO. P. LTD 27300637267V 4,72,064 4. I S K TRADING CO. P. LTD. 27170648057V 52,05,388/ - TOTAL 1,14,22,485/ - THE A.O. HAS ISSUED NOTICE U/S. 133(6) OF THE I.T . ACT TO ABOVE MENTIONED PARTIES , AND DEPUTED INSPECTOR TO SERVE THE NOTICE U/S.133(6) OF I.T . ACT. THE NOTICE U/S. 133(6) WERE NOT RECEIVED BY ANY PERSON AT THE ABOVE MENTIONED ADDRESS AND RETUNED BACK. THE INSPECTOR HAS REPORTED THAT NO SUCH PARTIES WERE EXISTED AT THE ABOVE MENTIONED ADDRESS. THE SANDEEP DHIRAJLAL DOSHI ITA NO.691/MUM./2017 3 A.O NOTED THAT T HE APPELLANT WAS ASKED TO PRODUC E THE PAYMENT AND DELIVERY PROOF. THAT T HE APPELLANT HAS SUBMITTED THE DETAILS OF PAYMENT AND DELIVERY PROOF BUT FAILED TO PRODUCE THE ABOVE MENTIONED PARTY. THEREFORE, THE A.O HAS DISALLOWED 25% OF ALLEGED PURCHASE I.E. RS. 28,55,613/ - AND ADDED TO THE TO TAL INCOME OF THE ASSESSEE. 5. A GAINST THE ABOVE ORDER ASSESSEE AP PEALED BEFORE THE LD. CIT - A. THE LD. CIT - A GRANTED PART RELIEF DIRECTING THE ASSESSING OFFICER TO MAKING ADDITION OF 12.5% OF THE BOGUS PURCHASE. 6. AGAINST ABOVE ORDER OF LD. CIT - A ASSESS EE IS IN APPEAL BEFORE THE ITAT. 7. A SSESSEE CHALLENGES THE MERITS OF THE ADDITION CLAIMING THAT DOCUMENTARY EVIDENCE WAS PRODUCED BEFORE THE ASSESSING OFFICER IN SUPPORT OF THE PROPOSITION THAT THE PURCHASES WERE GENUINE. 8. I HAVE HEARD BOTH THE COUNSE L AND PERUSED THE RECORDS. 9. I FIND THAT CREDIBLE AND COGENT INFORMATION WAS RECEIVED IN THIS CASE BY THE ASSESSING OFFICER THAT CERTAIN ACCOMMODATION ENTRY PROVIDER/BOGUS SUPPLIERS WERE BEING USED BY CERTAIN PARTIES TO OBTAINED BOGUS BILLS. A SSESSEE WAS FOUND TO HAVE TAKEN ACCOMMODATION ENTRY/BOGUS PURCHASE BILLS DURING THE CONCERNED ASSES SMENT YEAR FROM DIFFERENT PARTIES. THESE BOGUS BILL SUPPLIERS HAVE ACCEPTED BEFORE THE CONCERNED AUTHORITIES THAT THEY ARE PROVIDING BOGUS BILL . BASED UPON THIS INFORMAT ION ASSESSMENT WAS REOPENED. THE CREDIBILITY OF INFORMATION RELATING TO REOPENING REAMING SANDEEP DHIRAJLAL DOSHI ITA NO.691/MUM./2017 4 UNASSAILED . F URTHERMORE IT IS NOTED THAT IN SUCH FACTUAL SCENARIO ASSESSING OFFICER HAS MADE THE NECESSARY ENQUIRY. THE ISSUE OF NOTICE TO ALL THE PARTIES HAVE RETURN ED UNSERVED. ASSESSEE HAS NOT BEEN ABLE TO PROVIDE ANY CONFIRMATION FROM ANY OF THE PARTY. ASSESSEE HAS ALSO NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. IN THIS FACTUAL SCENARIO IT IS AMPLY THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION OF DOCUMENTS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS ARE BOGUS AND NON - EXISTENT. 10. THE SALES TAX DEPARTMENT IN ITS ENQUIRY HAVE FOUND ALL THESE PARTIES TO BE PROVIDING BOGUS ACCOMMODATION ENTRIES. THE ASSE SSING OFFICER ALSO ISSUED NOTICES TO THESE PARTIES AT THE ADDRESSES PROVIDED BY T HE ASSESSEE. ALL THESE NOTICES H AVE RETURNED UNSERVED. INSPECTOR HAS FOUND THERE ADDRESSES TO BE FAKE. ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. NEITHER THE AS SESSEE HAS BEEN ABLE TO PRODUCE ANY CONFIRMATION FROM THESE PARTIES. IN SUCH CIRCUMSTANCES THERE IS NO DOUBT THAT THESE PARTIES ARE NON - EXISTENT. 11. HENCE PURCHASE BILLS FROM THESE NON - EXISTENT THE/BOGUS PARTIES CANNOT BE TAKEN AS COGENT EVIDENCE OF PURC HASES. IN LIGHT OF THE OVERWHELMING EVIDENCE THE REVENUE AUTHORITIES CANNOT PUT UPON BLINKERS AND ACCEPT THESE PURCHASES AS GENUINE. THIS PROPOSITION IS DULY SUPPORTED BY HONOURABLE APEX COURT DECIS ION IN THE CASE OF SUMATI DAYAL 214 ITR 801 AND DURGA PRAS AD M ORE 82 ITR 540 . IN THESE CIRCUMSTANCES LD. DR HAS REFERRED TO HONOURABLE GUJARAT HIGH COURT DECISION IN THE CASE OF TAX SANDEEP DHIRAJLAL DOSHI ITA NO.691/MUM./2017 5 APPEAL NO 240 OF 2003 IN THE CA SE OF N K INDUSTRIES VS. DCIT ORDER DT. 20.06.2016, WHEREIN HUNDRED PERCENT OF THE BOGUS PURCHASES W AS HELD TO BE ADDED IN THE HANDS OF THE ASSESSEE AND TRIBUNALS RESTRICTION OF THE ADDITION TO 25% OF THE BOGUS PURCHASES WAS SET ASIDE. IT WAS EXPOUNDED THAT WHEN PURCHASE BILLS HAVE BEEN FOUND TO BE BOGUS 100% DISALLOWANCE OF THE SAME WAS TO BE DONE. THE SPECIAL LEAVE PETITION AGAINST THIS ORDER ALONGWITH OTHERS HAS BEEN DISMISSED BY THE HONOURABLE APEX COURT VIDE ORDER DT 16.01.2017 12. HOWEVER I NOTE THAT THIS IS NOT AN APPEAL BY THE REVENUE. HENCE IT WILL NOT BE APPROPRIATE TO TAKE AWAY THE RELIEF GRANT ED BY THE REVENUE TO THE ASSESSEE. HENCE CONFIRM THE ORDER OF LD. CIT - A IN THE RESULT TH IS APPEAL FILED BY THE ASSESSEE IS STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 .09.2017 SD/ - SHAMIM YAHIYA ACCOUNTANT MEMBER MUMBAI, DATED: 04 .09.2017 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE. SANDEEP DHIRAJLAL DOSHI ITA NO.691/MUM./2017 6 TRUE COPY BY ORDER NISHANT VERMA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI