SAKET INFRAPROJETS LTD, MUMBAI V. DCIT CEN CIR 6, MUMBAI

ITA 735/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9881 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS LD
• Assessee Lawyers: A N SHAH LD
• Keywords: Bogus purchase; Wrong claim
• Section: 143(3); 133A; 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.734/MUM/2016 ( / ASSESSMENT YEAR: 2011-12) SHAH & PARIKH 2, VALLABH NIWAS, MALVIYA ROAD VILE PARLE (EAST) MUMBAI-400 057 / VS. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1 OLD CGO BUILDING, M. K. ROAD MUMBAI-400 020 ! ./ ./PAN/GIR NO. AAJFS-4684-D ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./I.T.A. NO.735/MUM/2016 ( / ASSESSMENT YEAR: 2011-12) SAKET INFRAPROJECTS LIMITED 308, THE SUMMIT BUSINESS BAY SERVICE ROAD, OFF WEH VILE PARLE (E),MUMBAI-400 057 / VS. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-5 OLD CGO BUILDING, 9 TH FLOOR MUMBAI-400 020 ! ./ ./PAN/GIR NO. AAKCS-4532-L ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : A.N. SHAH, LD. AR REVENUE BY : RIGNESH DAS, LD. JCIT- DR / DATE OF HEARING : 04/09/2018 / DATE OF PRONOUNCEMENT : 26/09/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY SEPARATE ASSESSEE CONTEST S EPARATE ORDERS OF LD. FIRST APPELLATE AUTHORITY. SINCE THE FACTS A RE SIMILAR AND BOTH THE ASSESSEES BELONG TO THE SAME GROUP, WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE & BRE VITY. 2 ITA NO. 734/MUM/2016 ; SHAH & PARIKH 2. THE APPEAL BY CONCERNED ASSESSEE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX (APPEALS)-47 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-36/AP.19/14-15 DATED 30/11/2015. THE ASSESSMENT FOR IMPUGNED AY WA S FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-5, MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 29/03/2014 WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT RS.377.31 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS.345.29 L ACS FILED BY THE ASSESSEE ON 29/09/2011. THE SOLE GROUND RAISED UNDE R THE APPEAL READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THAT THE DISALLOWANCE OF ALLEGED BOGUS THE PURCHASES BE RETAINED TO THE EXTENT OF 14.84% I.E. TO THE EXTENT OF GP. 2.1 BRIEFLY STATED, THE ASSESSEE BEING RESIDENT FIRM WAS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRUCTURE PROJECTS AND REGISTERED AS A RECOGNIZED CONTRACTOR WITH MUNICIPAL CORPORATION OF GREATER MUMBAI AND METROPOLITAN REGION DEVELOPMENT AUTHORITY AND VARIOUS OTHER STATE AND CENTRAL GOVERNMENT AGENCIES. THE ASSESSEE WAS A PART OF M/S RPS INFRA-PROJECTS GROUP. THE AFORESAID GROUP WAS SUBJECTED TO A SURVEY ACTION U/S 133A ON 26/11/2012 WHEREIN IT WAS GATHER ED THAT THE GROUP OBTAINED ACCOMMODATION PURCHASE BILLS FROM VARIOUS ENTITIES LISTED AS HAWALA DEALERS BY THE SALES TAX DEPARTMENT, MUMBAI THEREBY INFLATING ITS EXPENSES AND SUPPRESSING THE PROFITS . THE STATEMENT U/S SECTION 131 OF THE KEY PERSONS NAMELY JYANTILAL LAHERCHAND SHAH & NITIN R.SHAH WAS RECORDED DURING THE SURVEY PROCEEDINGS, THE REL EVANT EXTRACTS OF WHICH HAVE ALREADY BEEN REPRODUCED IN THE QUANTUM A SSESSMENT ORDER. 3 IN THE AFORESAID STATEMENTS, THE KEY PERSONS ADMITT ED VARIOUS DISCREPANCIES IN THE PURCHASE TRANSACTIONS BEING CA RRIED OUT BY THE ASSESSEE DURING IMPUGNED AY. HOWEVER, SHRI NITIN.R.SHAH, SUBSEQUENTLY, RETRACTED HIS STATEMENT ON 20/03/2013 WHICH HAS BEEN DISREGARDED BY LD. AO IN THE LIGHT OF VARIOUS JUDIC IAL PRONOUNCEMENTS. 2.2 SO FAR AS THE QUANTIFICATION IS CONCERNED, THE ASSESSEE REFLECTED AGGREGATE PURCHASES OF RS.1,45,58,457/- FROM THREE SUCH SUSPICIOUS DEALERS. DURING ASSESSMENT PROCEEDINGS, TO VERIFY T HE GENUINENESS OF PURCHASE TRANSACTIONS, NOTICES U/S 133(6) WAS ISSUE D TO ALL THE SUPPLIERS BUT THE SAME WERE RETURNED BACK UN-SERVED BY POSTAL AUTHORITIES. THE SPOT VERIFICATION OF ALL THESE PARTIES BY INSPECTOR REVEALED THAT NONE OF THE PARTY EXISTED AT THE GIVEN ADDRESS. 2.3 THE ASSESSEE DEFENDED THE PURCHASES, INTER-ALIA, BY SUBMITTING THAT THE MATERIAL WAS UTILIZED AT THE SITES AND THE PURCHASES WERE BACKED BY INVOICES AND THE PAYMENTS WERE THROUGH BANKING C HANNELS. HOWEVER NOT CONVINCED, LD. AO ESTIMATED THE ADDITIONS AGAIN ST THE SAME AT 18% WHICH RESULTED INTO AN ADDITION OF RS.26,20,522/- I N THE HANDS OF THE ASSESSEE. THE LD. AO ALSO MADE ADDITIONAL DISALLOWA NCE OF 4% AGAINST THESE PURCHASES TO ACCOUNT FOR WRONG CLAIM OF VAT / SALES TAX INPUT CREDIT . IN OTHER WORDS, THE ACTION OF LD. AO RESULTED INT O ADDITIONS OF 22% AGAINST THESE PURCHASE, WHICH AMOUNTED TO RS.32 ,02,860/-. 3. AGGRIEVED THE ASSESSEE CONTESTED THE SAME WITH P ARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 30/11/2 015 WHEREIN THE OVERALL ESTIMATED ADDITION, IN THE LIGHT OF CERTAIN JUDICIAL PRONOUNCEMENTS, HAS BEEN REDUCED TO 14.84%, BEING GROSS PROFIT RATE REFLECTED BY THE ASSESSEE. AGGRIEVED THE ASSESSEE IS IN FURTHER APPE AL BEFORE US. 4 4. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE, SHRI A.N.SHAH, SUBMITTED THAT THE IMPUGNED ADDITIONS WERE STILL ON THE HIGHER SIDE KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT AN ESTIMATED RATE OF 7% HAS BEEN APPLIED BY LD. FIRST APPELLATE AUTHORITY IN ASSESSEES OWN CAS E FOR AYS 2009-10 & 2010-11. THE COPIES OF THE RELEVANT ORDERS HAVE BEE N PLACED ON RECORD. PER CONTRA , LD. DR SUBMITTED THAT NO FURTHER RELIEF COULD BE GRANTED TO THE ASSESSEE. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINIO N THAT THE ASSESSEE WAS ENGAGED IN CIVIL CONSTRUCTION WHICH COULD NOT BE CARRIED OUT WITHOUT PURCHASE OF MATERIAL . THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND THE PAYMENTS T O SUPPLIERS WERE THROUGH BANKING CHANNELS. THE ASSESSEE WAS IN POSSE SSION OF PRIMARY PURCHASES DOCUMENTS. AT THE SAME TIME, THE SURVEY P ROCEEDINGS CASTED SERIOUS DOUBTS ON THE PURCHASES TRANSACTIONS BEING CARRIED OUT BY THE ASSESSEE. THE KEY PERSONNEL, DURING SURVEY PROCEEDI NGS, ADMITTED DISCREPANCIES IN THE PURCHASE TRANSACTIONS. THE NOT ICES U/S 133(6) ISSUED TO ALL THE SUPPLIERS ELICITED NO RESPONSE AN D THE SPOT VERIFICATION REVEALED THAT NONE OF THE SUPPLIER EXISTED AT THE G IVEN ADDRESS. ALL THESE FACTORS CAST SERIOUS DOUBTS ON ASSESSEES CLAIM. BO TH THE LOWER AUTHORITIES, IN OUR OPINION, CLINCHED THE ISSUE IN THE PROPER PERSPECTIVE AND PROCEEDED TO MAKE ESTIMATION AGAINST THE SAME. HOWEVER, KEEPING IN VIEW THE OVERALL FACTUAL MATRIX AND THE NATURE O F ASSESSEES BUSINESS, THE ESTIMATION, IN OUR OPINION, WAS ON THE HIGHER S IDE. UPON PERUSAL OF APPELLATE ORDERS FOR AYS 2009-10 & 2010-11 IN ASSES SEES OWN CASE, WE FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS ADO PTED A UNIFORM RATE OF 5 7% WHILE ESTIMATING SUCH ADDITIONS FOR ALL THE GROU P CONCERNS. KEEPING IN VIEW THE SAME, WE REDUCE THE ESTIMATED ADDITIONS TO 7% OF ALLEGED BOGUS PURCHASES. THE IMPUGNED ORDER STAND MODIFIED TO THAT EXTENT. RESULTANTLY, THE ASSESSEES APPEAL STAND PARTLY ALL OWED. ITA NO. 735/MUM/2016 ; SAKET INFRAPROJECTS LIMITED 6. THE ASSESSEE, BEING PART OF THE SAME GROUP, UNDE R SIMILAR CIRCUMSTANCES, HAS BEEN SADDLED WITH AN ADDITION OF 22% AGAINST ALLEGED BOGUS PURCHASES FOR RS.3,86,21,849/-. THE QUANTUM OF ADDITION, UPON FURTHER APPEAL, HAS BEEN REDUCED TO 14.91% BY LD. FIRST APPELLATE AUTHORITY. FACTS AND CIRCUMSTANCES BEING THE SAME, WE REDUCE THE ESTIMATED ADDITIONS TO 7% AND ACCORDINGLY, MODIFY T HE ORDER OF LD. FIRST APPELLATE AUTHORITY TO THAT EXTENT. THE APPEAL STAN D PARTLY ALLOWED. CONCLUSION 7. BOTH THE APPEALS STAND PARTLY ALLOWED IN TERMS O F OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :26.09.2018 SR.PS:-THIRUMALESH 6 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI