PATEL BABULAL DHANJI (HUF), MUMBAI V. ITO 32(2)(5), MUMBAI

ITA 7104/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9839 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: YASH SALVI LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 69C; 133(6); 147; 148; 144

Judgement Text

ITA NO 7104/MUM/2016 PATEL BABULAL DHANJI (HUF) ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 7104/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) PATEL BABULAL DHANJI (HUF) SHOP NO.1, PLOT NO.34, GORAI TRIMURTI CHS, RDPI, GORAI NEAR SUVIDHYA SCHOOL, BORIVAL(W) MUMBAI 400 072 / VS. INCOME TAX OFFICER 32(2)(5) MUMBAI ! ./ ./PAN/GIR NO. AAAHP-3385-H ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : YASH SALVI, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 23/08/2017 ITA NO 7104/MUM/2016 PATEL BABULAL DHANJI (HUF) ASSESSMENT YEAR 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-44 [CIT(A)], MUMBAI DATED 21/09/2016 QUA CONFIRMATION OF CERTAIN ADDITIONS AGAINST BOGUS PURCHASES. 2.1 BRIEFLY STATED, THE ASSESSEE BEING RESIDENT HUF ENGAGED IN THE BUSINESS OF TIMBER, PLYWOOD, SUNMICA AND HARDWARE THROUGH A CONCERN NAMELY JALARAM TIMBER MART WAS SUBJECTED TO AN ASSESSMENT U/S 144 READ WITH SECTION 147 FOR IMPUGNED AY ON 16/03/2015 WHERE THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.2,42,90,530/- AFTER ADDITION OF RS.2,39,14,488/- U/S 69C ON ACCOUNT OF CERTAIN BOGUS PURCHASES. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 23/09/2009 DECLARING TOTAL INCOME OF RS.3,76,045/- WHICH WAS P ROCESSED U/S 143(1). 2.2 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASES BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.2,39,14,488/- FROM 13 PARTIES. CONSEQUENTLY, NOT ICE U/S 148 DATED 07/03/2014 WAS ISSUED WHICH WAS FOLLOWED BY STATUTO RY NOTICES U/S 142(1)/143(2). 2.3 TO CONFIRM THE PURCHASE TRANSACTIONS, NOTICES U /S 133(6) WERE ISSUED TO THE ALLEGED BOGUS SUPPLIERS, HOWEVER, THE SAME WERE EITHER ITA NO 7104/MUM/2016 PATEL BABULAL DHANJI (HUF) ASSESSMENT YEAR 2009-10 3 RETURNED BACK WITH REMARKS LEFT OR NO SUBMISSION WAS RECEIVED AGAINST THE SAME. THE SAME WERE CONFRONTED TO THE ASSESSEE, WHO COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCES TO SUBSTANTIATE T HE PURCHASES WHICH LED THE LD. AO TO TREAT THE PURCHASES AS NON- GENUINE PURCHASES AND THE ASSESSMENT WAS COMPLETED BY MAKING ADDITION THEREOF U/S 69C. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 21/09/2 016 AND REITERATED THAT THE PURCHASES WERE GENUINE AND PAYMENT WERE TH ROUGH BANKING CHANNELS. THE LD. CIT(A) NOTED THAT THE ASSESSEE WA S A TRADER AND THE TURNOVER REFLECTED BY THE ASSESSEE WAS NOT DISPUTED AND THE PAYMENT TO SUPPLIERS WERE THROUGH BANKING CHANNELS. AFTER PLAC ING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS, LD. CIT(A) RESTRIC TED THE ADDITIONS TO 9.72% OF THE BOGUS PURCHASES WHICH CAME TO RS.23,24,488/-. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] REITERA TED THE SAME CONTENTIONS WHEREAS LD. DR ASSERTED THAT THE IMPUGN ED ADDITIONS WERE QUITE FAIR AND REASONABLE. OUR ATTENTION WAS ALSO B ROUGHT TO THE FACT THAT THE REVENUE ACCEPTED THE STAND OF LD.CIT(A) AND DID NOT PREFER ANY FURTHER APPEAL. 5. WE HAVE HEARD THE CONTENTIONS AND PERUSED THE R ELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT TH ERE COULD BE NO SALE WITHOUT PURCHASES. THE SALES TURNOVER ACHIEVED BY T HE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS W ERE THROUGH BANKING CHANNELS. ON THE OTHER HAND, THE ASSESSEE C OULD NOT SUBSTANTIATE ACTUAL DELIVERY OF MATERIAL BY PRODUCI NG TRANSPORT / OCTROI ITA NO 7104/MUM/2016 PATEL BABULAL DHANJI (HUF) ASSESSMENT YEAR 2009-10 4 RECEIPTS. THEREFORE, IN SUCH A SITUATION, THE ADDIT ION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSE SSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD.CIT(A) HAS RIGHTL Y DONE. THE LD. CIT(A) HAS ELABORATELY APPRECIATED THE GP RATES EAR NED BY THE ASSESSEE AND REACHED THE QUANTUM OF ADDITION AFTER DUE APPLICATION OF MIND, WHICH, IN OUR OPINION, IS QUITE FAIR AND REAS ONABLE. THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE SAME. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23. 08.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI