ITO 23 (1)94), MUMBAI V. DEWAN EXPORTS INDIA , MUMBAI

ITA 8020/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3807 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI LD
• Keywords: Bogus purchase; Gift
• Section: 143(3)

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HO NBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 8020 /MUM/2019 ( / ASSESSMENT YEAR : 20 10 - 11 ) ITO - 23(1)(4) 109, FF, M ATRU MANDIR, TARDEO ROAD MUMBAI - 400 007 / VS. DEWAN EXPORTS INDIA 618 , SAGAR TECH PLAZA ANDHERI KURLA ROAD, SAKI NAKA, ANDHERI (EAST), MUMBAI - 400 072 ./ ./ PAN/GIR NO . AAAFD - 3593 - R ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI S ANJAY J. SETHI LD. DR / DATE OF HEARING : 07/06/2021 / DATE OF PRONOUNCEMENT : 07/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 20 10 - 11 CONTEST THE ORDER OF L D. COMM ISSIONER OF INCOME TAX (APPEALS) - 32 , MUMBAI [IN SHORT CIT(A) ] DATED 14/10/2019 WHICH HAS PROVIDED CERTAIN RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATERIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT FRAMED BY LD. AO. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED AS DEALER OF GIFTS & NOVELTIES WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U /S 143(3) R.W.S. 147 ON 30/03/2015. THE ORIGINAL RETURN FILED BY ASSESSEE WAS PROCESSED U/S 143(1). HOWEVER, PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT, MUMBAI, IT TRANSPIRED THAT THE ASSESSEE MADE ALLEGED BOGUS PURC HASES OF RS.16.80 LACS FROM THE ENTITY NAMELY M/S AMAR ENTERPRISES. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FILE REQUISITE DETAILS TO SUBSTANTIATE THE PURCHASES. 3.2 IN SUPPORT OF PURCHASES, THE ASSESS EE FURNISHED CERTAIN DOCUMENTS AND SUBMITTED THAT THE PAYMENTS WERE MADE TO THE SUPPLIER THROUGH BANKING CHANNELS. HOWEVER, IN RESPONSE TO NOTICE U/S 133(6), M/S AMAR ENTERPRISES DENIED HAVING CARRIED OUT ANY TRANSACTION WITH THE ASSESSEE. THE SAME LED LD. AO TO DISBELIEVE THE GENUINENESS OF THE STATED TRANSACTIONS. FINALLY, THESE PURCHASES WERE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. THE LD. CIT(A) NOTED THAT THE OPPORTUNITY OF CROSS - EXAMINE THE SUPPLIER WAS NOT PROVIDED TO THE ASSESSEE . FURTHER, LD. AO DID NOT DISTURB THE CORRESPONDING SALES MADE BY THE ASSESSEE. THEREFORE, IT COULD BE PRESUMED THAT THE GOODS WERE PURCHASED FROM GREY MARKET BUT THE BILLS WERE PROCURED FROM THE SAID SUPPLIER. FINALLY, THE ADDITIONS WERE RESTRICTED TO THE EXTENT OF 13% OF THESE PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 3 5. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE SALES TURNOVER WAS NOT IN DOUBT AND THE ASSESSEE WAS IN POSSESSION O F PRIMARY PURCHASE DOCUMENTS. THE PAYMENT TO THE SUPPLIERS WAS THROUGH BANKING CHANNELS. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE FACTS OF THE CASE MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANSACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMISSIONS AS WELL AS MATERIAL ON RECORD, ESTIMATED THE ADDITIONS @1 3 % WHICH IS MORE THAN ENOUGH TO TAKE CARE OF THE LEAKAGE OF REVENUE. THEREFORE, THE ES TIMATION COULD NOT BE TERMED AS UNJUSTIFIED, IN ANY MANNER. FINDING NO REASON TO INTERFERE IN THE IMPUGNED ORDER, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 07 TH JUNE, 2021 . SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07/06/2021 SR.PS, JAISY VARGHESE / 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, MU MBAI.