ITO WARD 3(2), THANE V. M/S BHARAT GRAHAK SAHAKARI SANSTHA MARYADIT, THANE

ITA 7803/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6929 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7803 / /20 19 (. . 2009-10 ) ITA NO.7803/MUM/2019 (A.Y.2009-10) ITO, WARD-3(2), ROOM NO. 4, 6 TH FLOOR, B-WING, WAGLE INDUSTRIAL ESTATE, THANE (W)-400604. /VS. M/S BHARAT GRAHAK SAHAKARI SANSTHA MARYADIT, SHIVBHAKTI NARAYAN BHAVAN, KARVE ROAD, NAUPADA, THANE-400602. ( / APPELLANT ) ( / RESPONDENT ) PAN NO. AAABB0145R / APPELLANT BY : SH. SANJAY J. SETHI / RESPONDENT BY : NONE / DATE OF HEARING : 03/06/2021 / DATE OF PRONOUNCEMENT : 10/08/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 07.10.2019 FOR THE ASSESSMENT YEARS (AY) 2009-10. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF STATIONERY ITEMS. DURING THE PERIOD RELEVANT TO AY UNDER APPEAL, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS. 9,07,814/- FROM M/S V-3 ENTERPRISES. TO VERIFY GENUINENESS OF THE TRANSACTIONS, THE ASSESSING OFFICER (AO) ISSUED NOTICE UNDER SECTION 133(6) OF 2 . 7803 / /20 19 (. .2009-10 ) ITA NO. 7803/MUM/2019 (AY-2009-10) THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] TO THE AFORESAID DEALER. THE NOTICE WAS RECEIVED BACK UNSERVED FROM POSTAL AUTHORITIES. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NEITHER PRODUCE THE DEALER NOR COULD FILE CONFIRMATION FROM THE SAID DEALER. NO EVIDENCE IN SUPPORT OF TRANSPORTATION OF THE GOODS VIZ. LORRY RECEIPTS, DELIVERY CHALLEN, INWARD REGISTER, ETC. WAS FURNISHED BY THE ASSESSEE. THUS, THE ASSESSEE COULD NEITHER PROVE GENUINENESS OF THE AFORESAID DEALER NOR PURCHASES MADE FROM THE SAID DEALER. THE AO DISALLOWED ENTIRE BOGUS PURCHASES. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE DISALLOWANCE ON BOGUS PURCHASES TO 12.5%. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A) TO THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY SUPPORTED THE ASSESSMENT ORDER AND FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD. V/S DCIT [84 TAXMANN.COM 195] TO SUPPORT 100% DISALLOWANCE OF BOGUS PURCHASES. 3. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE DEALER AND PURCHASES MADE FROM THE SAID DEALER. AT THE SAME TIME, IT IS OBSERVED THAT THE AO HAS NOT DISTURBED THE SALES TURNOVER DECLARED BY THE ASSESSEE. THE CIT(A) HAS UPHELD THE FINDINGS OF AO TO THE EXTENT OF ASSESSEES INVOLVEMENT IN OBTAINING BOGUS PURCHASE BILLS. THE CIT(A) HAS ESTIMATED SUPPRESSED PROFIT MARGIN IN BOGUS PURCHASES TO 12.5%. IN SUCH LIKE SUSPICIOUS TRANSACTIONS, ENTIRE PURCHASES CANNOT BE DISALLOWED, IF THE AO ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSEE. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX [RE: PCIT VS. 3 . 7803 / /20 19 (. .2009-10 ) ITA NO. 7803/MUM/2019 (AY-2009-10) PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO. 413 OF 2017 DECIDED ON 15.07.2019] 4. I FIND THAT NO INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , THE 10 TH DAY OF AUGUST, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER /MUMBAI, /DATED: 10/08/2021 SK, PS 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