ITO 20(1)(2), MUMBAI V. SHRI. ASHOK B BAGWE, MUMBAI

ITA 7763/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3873 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7763 / / 2019 (%. 2009-10 ) ITA NO.7763/MUM/2019(A.Y 2009-10) . 7764 / / 2019 (%. 2010-11 ) ITA NO.7764/MUM/2019(A.Y 2010-11) INCOME TAX OFFICER -20(1)(2) ROOM NO.119, 1 ST FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL,MUMBAI 400 012 ...... ' / APPELLANT % VS. SHRI ASHOK A. BAGWE, 12, WADALA UDYOG BHAVAN, NAIGAON CROSS ROAD, WADALA, MUMBAI 400 013. PAN:AAAPB-9671-Q ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI SANJAY J. SETHI ()*/ RESPONDENT BY : SHRI SUNIL ROHRA %+) / DATE OF HEARING : 29/07/2021 ,-. +) / DATE OF PRONOUNCEMENT : 08/10/2021 / ORDER THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI [ I N SHORT THE CIT(A)] FOR ASSESSMENT YEARS 2009-2010 AND 2010-11, RESPECTIVEL Y. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 23/10/2019. SINCE, F ACTS GERMANE TO THE ISSUE RAISED IN THESE APPEALS ARE SIMILAR, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2 ITA NO.7763/MUM/2019(A.Y 2009-10) ITA NO.7764/MUM/2019(A.Y 2010-11) 2. FOR THE SAKE OF CONVENIENCE FACTS ARE NARRATED F ROM THE APPEAL IN ITA NO.7763/MUM/2019 FOR ASSESSMENT YEAR 2009-10. ITA NO.7763/MUM/2019, A.Y. 2009-10 : 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED DIRECTOR GENER AL OF INCOME TAX(INVESTIGATION). AS PER THE INFORMATION RECEIVE D, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.8,48,803/- IN F.Y. 2008-09 FROM THE FOLLOWING OPERATORS DECLARED AS HAWALA DEALERS BY T HE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. (1) NAGESHWAR ENTERPRISES - RS.5,09,611/- (2) MEETI TRADE IMPEX - RS.1,66,249/- (3) MAULIK ENTERPRISES - RS.1,72,943/- DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE FURN ISHED INVOICES/BILLS AND LEDGER ACCOUNTS TO SUBSTANTIATE GENUINENESS OF PURC HASES. HOWEVER, NO TRANSPORT BILLS, DELIVERY CHALLANS, ETC. WERE PRO DUCED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. THE ASSESSING OFFICER CONCLUDED TH AT ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AND MADE ADDITION OF THE ENTI RE UNPROVED PURCHASES I.E. RS.8,48,803/-. AGAINST THE ASSESSMENT ORDER DATED 10/03/2014, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDE RING THE SUBMISSIONS OF ASSESSEE AND MATERIAL AVAILABLE ON RECORD RESTRICTE D THE ADDITION BY ESTIMATING SUPPRESSED PROFIT MARGIN ON BOGUS PURCHASES AT 5%. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A). 3 ITA NO.7763/MUM/2019(A.Y 2009-10) ITA NO.7764/MUM/2019(A.Y 2010-11) 4. THE SHRI SANJAY J. SETHI REPRESENTING THE DEPART MENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF DEALERS AND PURCHASES MADE FROM THE M. NO DOCUMENTARY EVIDENCE WAS FURNISHED BY THE ASSESSEE TO PROVE TRA NSPORTATION OF GOODS. THE ASSESSEE NEITHER PRODUCED THE DEALERS NOR ANY CONFI RMATIONS FROM THE SAID DEALERS WERE FURNISHED BY THE ASSESSEE. THE LD.D EPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSING THE FINDING OF CIT(A) AND UPH OLDING THE ASSESSMENT ORDER. TO FURTHER BUTTRESS HIS SUBMISSIONS, THE LD.DEPARTM ENTAL REPRESENTATIVE PLACED RELIANCE ON THE CASE OF N.K. PROTEINS VS. DC IT, 84 TAXMANN.COM195(SC). 5. ON THE OTHER HAND, SHRI SUNIL ROHRA APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL FILED BY THE REVENUE. THE LD.AUTHORIZED REP RESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAS DECLARED G.P OF 28.49% DURING THE RELEVANT ASSESSMENT YEAR ON REGULAR TRANSACTIONS. 6. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. UNDISPUTEDLY, THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PR OVING AUTHENTICITY OF THE DEALERS AND GENUINENESS OF PURCHASES MADE FROM THE M. AT THE SAME TIME IT IS OBSERVED THAT THE ASSESSING OFFICER HAS ACCEPTED SA LES TURNOVER DECLARED BY THE ASSESSEE. WITHOUT PURCHASES THERE CANNOT BE S ALES. THEREFORE, ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. IT IS ONL Y THE PROFIT ELEMENT EMBEDDED IN SUCH LIKE TRANSACTIONS THAT CAN BE BRO UGHT TO TAX [ RE: PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX A PPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 BY THE HON'BLE BOMBAY HIGH CO URT . ] TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I FIND THAT THE A SSESSING OFFICER HAS ERRED IN 4 ITA NO.7763/MUM/2019(A.Y 2009-10) ITA NO.7764/MUM/2019(A.Y 2010-11) DISALLOWING ENTIRE ALLEGED BOGUS PURCHASES. THE ORDER OF CIT(A) IS FAIR AND JUSTIFIED IN ESTIMATING SUPPRESSED PROFIT MARGIN O N UNPROVED PURCHASES AT 5%. HENCE, THE IMPUGNED ORDER WARRANTS NO INTERFERENCE . THE IMPUGNED ORDER IS UPHELD AND APPEAL BY THE REVENUE IS DISMISSED SANS MERIT. ITA NO.7764/MUM/2019, A.Y. 2010-11: 7. BOTH SIDES ARE UNANIMOUS IN STATING THAT THE FAC TS IN APPEAL FOR ASSESSMENT YEAR 2010-11 ARE SIMILAR TO THE FACTS IN ASSESSMENT YEAR 2009-10. NATURE OF TRANSACTIONS AND THE MANNER OF ADDITION I S IDENTICAL EXCEPT FOR THE QUANTUM OF BOGUS PURCHASES AND THE DEALERS. IN ASSE SSMENT YEAR 2010-11 THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASE BILL S AMOUNTING TO RS.10,03,551/- FROM FOUR DEALERS STATED TO BE ACCOM MODATION ENTRY PROVIDERS. THE RESPECTIVE SIDES AGREED THAT THE SUBMISSIONS M ADE FOR ASSESSMENT YEAR 2009-10 WOULD APPLY TO ASSESSMENT YEAR 2010-11. SINCE, THE FACTS ARE SIMILAR TO THE FACTS IN ASSESSMENT YEAR 2009-10, THE DETAIL ED FINDINGS GIVEN WHILE ADJUDICATING APPEAL OF THE REVENUE FOR ASSESSMEN T YEAR 2009-10 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT APPEAL ALSO. FOR PARITY OF R EASONS THE APPEAL BY THE REVENUE IS DISMISSED. 8. TO SUM UP, BOTH APPEALS BY THE REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 0 8 TH DAY OF OCTOBER, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 08/10/2021 VM , SR. PS (O/S) 5 ITA NO.7763/MUM/2019(A.Y 2009-10) ITA NO.7764/MUM/2019(A.Y 2010-11) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI