INCOME TAX OFFICER 19(3)(1), MUMBAI V. RAJESH MAUBHAI CHAUHAN, MUMBAI

ITA 6934/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0308 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARJU GORADIA
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 6934 /MUM/ 2017 (ASSESSMENT YEAR 20 10 - 11 ) ITO - 19(3)(1) MATRU MANDIR ROOM NO. 202 TARDWO ROAD MUMBAI - 400 007. V S . SHRI RAJESH MANUBHAI CHAUHAN C/O. DODHIA INDUSTRIES 403, DHARAM PALACE NATIONAL PARK SHANTIVAN, BORIWALI (E) MUMBAI - 400 066. PAN : AAEPC3596K ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY MS. ARJU GORADIA DATE OF HEARING 2 2 . 2 . 201 8 DATE OF PRONOUNCEMENT 22 . 2 . 201 8 O R D E R THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 08 - 09 - 2017 PASSED BY LD CIT(A) - 29, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2010 - 11. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN GRANTING PARTIAL RELIEF TO THE ASS ESSEE IN RESPECT OF ADDITION RELATING TO BOGUS PURCHASES. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER A LETTER WAS MOVED BY THE ASSESSEE SEEKING ADJOURNMENT ON THE PLEA THAT HE HAS NOT APPOINTED A COUNSEL TILL DATE. I AM NOT CONVINCED WITH THE REASONING GIVEN BY THE ASSESSEE FOR SEEKING ADJOURNMENT AND ACCORDINGLY I REJECT THE SAME. ACCORDINGLY I PROCEED TO DISPOSE OF THE APPEAL EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. I HEARD THE LD D.R AND PERUSED THE RECORD. THE ASSESSEE IS A M ANUFACTURER OF LIGHT POLE ACCESSORIES. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, IT CAME TO THE NOTICE OF THE REVENUE THAT THE ASSESSEE HAS MADE PURCHASES TO THE TUNE OF RS.37,97,715/ - DURING THE YEAR UNDER SHRI RAJESH MANUBHAI CHAUHAN 2 CONSIDERATION FROM TH E PARTIES, WHO WERE LISTED OUT BY THE SALES TAX DEPARTMENT AS HAWALA DEALERS, I.E., THEY HAVE PROVIDED ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICES U/S 133(6) OF THE A CT, BUT THEY WERE RETURNED BACK UN - SERVED. HENCE THE AO ASKED THE ASSESSEE TO PRODUCE THE SUPPLIERS, BUT THE ASSESSEE FAILED. THE ASSESSEE ALSO COULD NOT RECONCILE THE PURCHASES WITH THE CONSUMPTION/SALES. HENCE THE AO TREATED THE ABOVE SAID PURCHASES AS BOGUS IN NATURE. SINCE THE ASSESSEE DID NOT PRODUCE STOCK REGISTER, HE DISALLOWED ENTIRE AMOUNT OF ALLEGED BOGUS PURCHASES. 3. THE LD CIT(A), HOWEVER, RESTRICTED THE ADDITION TO 12.50% OF THE VALUE OF ALLEGED BOGUS PURCHASES AND HENCE THE REVENUE IS AGGRIEVED. 4. I NOTICE THAT THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER AND HENCE HE COULD NOT ESTABLISH THAT THE MATERIALS WERE ACTUALLY CONSUMED BY HIM. I NOTICE THAT THE LD CIT(A) HAS ESTIMATED THE PROFIT ON THE REASONING THAT THE AO HAS N OT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THERE WAS SUPPRESSION OF SALES. HOWEVER, ON READING OF ASSESSMENT ORDER, I NOTICE THAT THE AO HAS MADE IT VERY CLEAR THAT IT IS THE RESPONSIBILITY OF THE ASSESSEE TO SHOW THAT THE MATERIALS COVERED BY THE ALL EGED ACCOMMODATION BILLS WERE EITHER CONSUMED OR SOLD. SINCE THERE WAS FAILURE ON THE PART OF THE ASSESSEE, THE AO WAS CONSTRAINED TO DISALLOW ENTIRE PURCHASES. I NOTICE THAT THE LD CIT(A) HAS FAILED TO APPRECIATE THE SAME AND BEFORE HIM THE ASSESSEE HAS FAILED TO PRODUCE ANY MATERIAL TO PROVE CONSUMPTION/SALES. UNDER THESE SET OF FACTS, I AM OF THE VIEW THAT THIS ISSUE REQUIRES RECONSIDERATION AT THE END OF LD CIT(A) SO THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE, IN THE INTEREST OF NATURAL J USTICE. ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO HIS FILE WITH THE DIRECTION TO EXAMINE IT AFRESH AND TAKE APPROPRIATE SHRI RAJESH MANUBHAI CHAUHAN 3 DECISION IN ACCORDANCE WITH THE LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 2 .2. 201 8 . SD/ - (B.R.BASKARAN) ACCOUNTANT M EMBER MUMBAI ; DATED : 2 2 / 2 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECRETARY ) PS ITAT, MUMBAI