MUDRIKA LABELS P.LTD, MUMBAI V. DCIT 12(3)(2), MUMBAI

ITA 7666/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0298 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Keywords: Bogus purchase; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T.A. NO. 7666 /MUM/20 16 (ASSESSMENT YEAR 20 09 - 10 ) MUDRIKA LABELS PVT. LTD. GALA NO. 18/20 NIRMAL INDUSTRIAL ESTATE CHINCHOLI BUNDER LINK ROAD, MALAD WEST MUMBAI - 400 064. VS. DCIT 12(3)(2) MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AABCM5217D ASSESSEE BY SHRI BHARAT SHAH DEPARTMENT BY MS. POOJA SWARUP DATE OF HEARING 17 . 8 . 201 7 DATE OF PRONOUNCEMENT 17 .8 . 201 7 O R D E R PER B. R. BASKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CH ALLENGING THE ORDER DATED 26.08. 2016 PASSED BY LD CIT(A) - 20, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.14,20,700/ - RELATING TO BOGUS PURCHASES. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF LABELS, STICKERS AND PACKING MATERIALS. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT THAT CERTAIN DEALERS ARE INDULGING IN PROVIDING ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING MATERIALS AND ALSO UPON NOTICING THAT THE ASSESSEE HAS PURCHASED GOODS TO THE TUNE OF RS.14,77,528/ - (PURCHASE VALUE RS.14,20,700 + VAT RS.56 ,828/ - ) FROM SUCH PARTIES, THE AO REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION. IN RESPONSE THERETO, THE ASSESSEE FILED RETURN OF INCOME BY DISALLOWING THE ABOVE SAID PURCHASE VALUE OF RS.14,20,700/ - . MUDRIKA LABELS PV T. LTD. 2 HOWEVER, DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSEE PLEADED THAT THE INCOME WAS REVISED ON WRONG UNDERSTANDING OF LAW AND ACCORDINGLY PLEADED THAT THE DISALLOWANCE SHOULD BE RESTRICTED TO 20% OF THE ALLEGED BOGUS PURCHASES. THE AO REJECTED THE SAID PLEA AND ACCORDINGLY DETERMINED T HE TOTAL INCOME AS PER THE RETURN OF INCOME FILED BY THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE LD A.R SUBMITTED THAT THE TRIBUNAL HAS, IN NUMBER OF CASES, ESTIMATED THE PROFIT E LEMENT INVOLVED IN THE AMOUNT OF ALLEGED BOGUS PURCHASES AND HENCE THE ADDITION SHOULD BE RESTRICTED TO THE EXTENT OF PROFIT ELEMENT. HE SUBMITTED THAT THE ASSESSEE HAS VOLUNTARILY DISALLOWED ENTIRE AMOUNT OF PURCHASES ON WRONG UNDERSTANDING OF LAW. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE NATURE OF PURCHASES, I.E., WITHER IT WAS ACTUAL OR BOGUS, WAS WITHIN THE PERSONAL KNOWLEDGE OF THE ASSESSEE. SINCE IT WAS A CASE OF BOGUS PURCHASES, THE ASSESSEE HAS VOLUNTARILY DISALLOWED THE SAME. ACCO RDINGLY THE LD D.R SUBMITTED THAT THE ASSESSEE CANNOT BE ALLOWED TO CHANGE ITS STAND. 5. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE CONTENTIONS OF THE LD D.R. THE LD CIT(A) HAS ALSO OBSERVED THAT THE PRIMARY ONUS TO PROVE THE EXPENDITURE IS PLACED UPON THE ASSESSEE AND HENCE THE ASSESSEE HAS VOLUNTARILY DISALLOWED THE PURCHASES, SINCE IT WAS AWARE OF THE FACTS SURROUNDING THE SAME. FURTHER THE LD CIT(A) HAS ALSO NOTICED THAT THE ASSESSEE HAS NOT PRODUCED ANY OTHER M ATERIAL TO SHOW THAT THE DISALLOWANCE WAS MADE ON MISTAKE OF FACTS. UNDER THESE SET OF FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD CIT(A). MUDRIKA LABELS PV T. LTD. 3 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 17 . 8 .201 7. SD/ - SD/ - (PAWAN SINGH ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 17 / 8 / 20 1 7 COPY OF THE OR DER 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) PS ITAT, MUMBAI