MAHESH CHANDRAKANT PEDNEKAR, MUMBAI V. ITO , WARD- 1 (2), MUMBAI

ITA 6937/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9096 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase
• Section: 143(3); 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 6937/MUM/2018(A.Y.2009-10) ITA NO. 6938/MUM/2018(A.Y.2010-11) MAHESH CHANDRAKANT PADNEKAR, SHOP NO.6, MANDAR BUILDING, NEAR TMC OFFICE, ALMEDA ROAD, THANE (W) 400 602 PAN: AGHPP 6703A ...... APPELLANT VS. INCOME TAX OFFICER, WARD 1(2), THANE. MAHARASHTRA ..... RESPONDENT APPELLANT BY : SHRI RAJESH S. SHAH RESPONDENT BY : SHRI R. BHOOPATI DATE OF HEARING : 17/12/2019 DATE OF PRONOUNCEMENT : 06/01/2020 ORDER THESE APPEALS BY THE ASSESSEE FOR ASSESSMENT YE ARS 2009-10 AND 2010- 11 ARE DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, (IN SHORT THE CIT(A) ), THANE DATED 14/09/2018 CO MMON FOR BOTH AFORESAID ASSESSMENT YEARS. SINCE THE ISSUE RAISED IN BOTH T HE APPEALS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATIO N AND ARE DISPOSED OF BY THIS COMPOSITE ORDER. 2. THE BRIEF FACTS AS EMANATING FROM THE RECORDS A RE: THE ASSESSEE IS A CIVIL CONTRACTOR. INFORMATION W AS RECEIVED BY THE ASSESSING OFFICER FROM SALES TAX DEPARTMENT, MAHAR ASHTRA THAT THE 2 ITA NO. 6937/MUM/2018(A.Y.2009-10) ITA NO. 6938/MUM/2018(A.Y.2010-11) ASSESSEE HAS OBTAINED BOGUS BILLS FROM HAWALA OPER ATORS. ACCORDINGLY, ASSESSMENT FOR ASSESSMENT YEARS 2009-10 AND 2010-11 WERE REOPENED. IN ASSESSMENT YEAR 2009-10 THE ASSESSING OFFICER VIDE ORDER DATED 16/09/2014 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) OBSERVED THAT THE ASSESSE E HAD PROCURED BOGUS PURCHASE BILLS AMOUNTING TO RS.48,951/- FROM HAWALA OPERATORS. SIMILARLY, FOR THE ASSESSMENT YEAR 2010-11 THE ASSESSING OFFIC ER VIDE ORDER DATED 16/09/2014 CONCLUDED THAT THE ASSESSEE OBTAINED BOG US PURCHASE BILLS AMOUNTING TO RS.1,06,496/- FROM HAWALA OPERATORS. T HE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE SUCH BOGUS PURCHASES I N THE RESPECTIVE ASSESSMENT YEARS. AGGRIEVED AGAINST ASSESSMENT ORD ERS FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER UPHELD THE ADDITION ON ACCOUNT OF BOGUS PURCHASES IN ASSESSMENT YEARS 2009-10 AND 2010-11. HENCE, THE PRESENT APPEALS BY THE ASSESSEE. 3. SHRI. RAJESH S. SHAH APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND IS EXECUTIN G CIVIL WORK CONTRACTS FOR GOVERNMENT AND OTHER AGENCIES. THE ASSESSEE HAD FU RNISHED DETAILS; SUCH AS BANK STATEMENTS, COPY OF RETURN OF INCOME, AUDIT REPORTS UNDER SECTION 44AB OF THE ACT, ETC. DURING RE-ASSESSMENT PROCEEDING S. THE ASSESSEE HAD ALSO FURNISHED DETAILS OF PARTY WISE PURCHASE AND SALES TO THE AUTHORITIES BELOW. THE ADDITIONS HAVE BEEN MADE ONLY FOR THE REASONS T HAT THE ASSESSEE COULD NOT PRODUCE THE PARTIES BEFORE THE ASSESSING OFFICER. THE ASSESSEE MADE PAYMENTS TO THE SAID PARTIES THROUGH CHEQUES AND HAD FURNISH ED COPIES OF INVOICE OF BILLS. THE CONTRACTING JOBS PERFORMED BY THE ASSESSEE WERE NOT DISPUTED BY THE GOVERNMENT AGENCIES FOR WHOM THE JOBS WERE PERFORME D. THE LD. AUTHORIZED 3 ITA NO. 6937/MUM/2018(A.Y.2009-10) ITA NO. 6938/MUM/2018(A.Y.2010-11) REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAD DECLARED NET PROFIT OF 8.02% FOR THE FINANCIAL 2008-09 AND 8.08% FOR THE FINANCIAL YEAR 2009- 10. THE ADDITIONS IF AT ALL ARE TO BE MADE THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. 4. ON THE OTHER HAND, SHRI R. BHOOPATHI REPRESENTIN G THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAI LED TO PRODUCE TRANSPORT RECEIPTS, OCTROI RECEIPTS, ETC. THE ASSESSEE WAS A SKED TO PRODUCE THE PARTIES TO SUBSTANTIATE GENUINENESS OF THE TRANSACTIONS. HOWE VER, THE ASSESSEE FAILED TO PRODUCE THE PARTIES. THUS, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING THE GENUINENESS OF THE PURCHASE TRANSACTION. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW WERE PERUSED. THE ADDITION HAS BEEN MADE IN ASSESSMENT YEARS 2009-10 AND 2010-11 ON ACCOUNT OF ASSESSEE OBTAINING BOGUS PURCHASE BILLS FROM TH E FOLLOWING PARTIES:- S.NO. NAME OF HAWALA DEALERS ASSTT. YEAR 2009-10 SSTT.YEAR 2010-11 1. M/S. ANKIT ENTERPRISES RS. 30,615 - 2. M/S.SHEETAL TRADING CO. RS. 18,336 - 3. M/S. HARSH CORPORATION - RS. 51,584/- 4. M/S.MAHAVIR ENTERPRISES - RS. 54,912/- TOTAL RS. 48,951 RS.1,06,496/- THE ASSESSING OFFICERHAS MADE ADDITION OF THE ENTI RE ALLEGED BOGUS PURCHASES IN BOTH ASSESSMENT YEARS. THE CIT(A) HAS UPHELD TH E ADDITION MADE BY THE ASSESSING OFFICER. IT IS AN UNDISPUTED FACT THAT T HE CONTRACT WORK PERFORMED BY THE ASSESSEE HAS NOT BEEN DISPUTED EITHER BY THE IN COME TAX DEPARTMENT OR THE GOVERNMENT DEPARTMENTS/ OTHER AGENCIES FOR WHOM THE ASSESSEE HAS BEEN 4 ITA NO. 6937/MUM/2018(A.Y.2009-10) ITA NO. 6938/MUM/2018(A.Y.2010-11) DOING CONTRACT JOBS. TAKING INTO CONSIDERATION E NTIRETY OF FACTS, I AM OF CONSIDERED VIEW THAT ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED BACK. APPARENTLY, ASSESSEE HAS PURCHASED GOODS FROM GREY MARKET AND HAS OBTAINED BILLS FROM HAWALA OPERATORS. UNDER SUCH CIRCUMST ANCES, ADDITION ONLY TO THE EXTENT UNDISCLOSED PROFIT ELEMENT CAN BE MADE. TO MEET THE ENDS OF JUSTICE IT WOULD BE JUST AND PROPER TO RESTRICT THE ADDITION T O 8% OF THE ALLEGED BOGUS PURCHASES OVER AND ABOVE THE GROSS PROFIT DECLARED BY THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. 6. THE IMPUGNED ORDER IS MODIFIED AND THE APPEALS O F THE ASSESSEE ARE PARTLY ALLOWED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, TH E 06 TH DAY OF JANUARY,2020. SD/- (VIKAS AWASTHY) JUDICIAL MEMBER MUMBAI, DATED 06/01/2020 VM , SR. PS(O/S) 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI