SHRI RAJENDRA BHANWARLAL DOSHI, MUMBAI V. I.T.O. - 19(3)(1), MUMBAI

ITA 835/MUM/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0760 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESHRI
• Keywords: Bogus purchase; Tangible material; Accommodation entries; Onus to prove
• Section: 133(6); 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 835/MUM/2018 (ASSESSMENT YEAR 2009-10 ) SHRI RAJENDRA BHANWARLAL DOSHI 160/162, 2 ND FLOOR, GANJAWALA BUILDING, DR. M.G. MAHIMTURA MARG, NEAR GOEL DEVAL, MUMBAI-400004. PAN: ADMPD3397C VS. ITO - 19(3)(1) MUMBAI. APPELLANT RESPONDE NT APPELLANT BY : NONE RESPONDENT BY : SHRI AJAY KUMAR KESHRI (DR) DATE OF HEARING : 04.10.2018 DATE OF PRONOUNCEMEN T : 04.10.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME -TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-53, MUMBAI DATED 28 .12.2017 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN REOPENING THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FRO M SALES TAX DEPARTMENT UNDER SECTION 147/148 OF INCOME TAX ACT, 1961 FOR T HE ASST. YEAR 2009-10. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DISALLOW BOGUS PURCHASE AT THE RATE 12.5% AMOUNTING TO RS. 3 ,61,702/-. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF TRADING IN TRADERS & WHOLESALERS IN STAINLESS STEEL UNDER THE NAME AND STYLE OF PROPRIETORSHIP CONCERN M/S RAVIRATNA STAINLESS. THE ASSESSEE FILED RETURN ITA NO. 835 MUM 2018-SHRI RAJENDRA BHANWARLAL DOSHI 2 OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 26.09.2009 DECLARING INCOME OF RS. 2,02,500/-. THE RETURN OF INCOME WAS PROCESSED AND ACCEPTED UNDER SECTION 143(1) OF THE ACT. THE ASSESSMENT WAS RE-OP ENED BY ISSUING NOTICE UNDER SECTION 148 ON 8.03.2014. THE ASSESSMENT WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM SALE TAX DEPARTMENT, G OVERNMENT OF MAHARASHTRA THAT SOME OF THE DEALERS WERE INDULGING IN PROVIDING ACCOMMODATION ENTRY BY ISSUING BOGUS BILLS WITHOUT SUPPLY OF ANY GOODS OR MATERIAL. THE ASSESSEE WAS ALSO ONE OF THE BENEFICI ARIES WHO HAS AVAILED ACCOMMODATION ENTRY FROM THREE PARTIES AGGREGATING TO RS. 28,93,617/-. NOTICE UNDER SECTION 148 DATED 08.03.2014 WAS SERVE D UPON THE ASSESSEE. THE ASSESSEE WAS SUPPLIED WITH THE REASONS FOR RE-O PENING. THE ASSESSING OFFICER PROCEEDED FOR RE-ASSESSMENT. DURING THE RE- ASSESSMENT PROCEEDING, THE ASSESSEE WAS ASKED TO FURNISH THE SUPPORTING DO CUMENTARY EVIDENCES TO SUBSTANTIATE THE PURCHASES FROM ALL THREE PARTIES. THE ASSESSEE FURNISHED THE ADDRESS OF ALL THREE PARTIES. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) TO ALL THE PARTIES AT THE ADDRESSES PROVIDED BY ASSESSEE. THE NOTICES SENT BY ASSESSING OFFICER WERE RETURNED BAC K WITH THE REMARK NOT KNOWN OR LEFT. THE ASSESSEE WAS ASKED TO PROVE T HE GENUINENESS OF THE PURCHASES. THE ASSESSEE FURNISHED THE COPY OF BANK STATEMENT AND THE DETAILS OF PURCHASES. THE CONTENTION OF THE ASSESSE E AND THE EVIDENCE FURNISHED BY ASSESSING OFFICER WAS NOT ACCEPTED BY ASSESSING OFFICER HOLDING THAT THE ONUS TO PROVE THE GENUINENESS OF P URCHASES WERE UPON THE ITA NO. 835 MUM 2018-SHRI RAJENDRA BHANWARLAL DOSHI 3 ASSESSEE. THE ASSESSEE FILED MERELY EVIDENCE THAT P URCHASES WERE MADE THROUGH ACCOUNT PAYEE CHEQUE, WHICH IS NOT CONCLUSI VE PROOF WHEN GENUINENESS OF TRANSACTION IS IN DOUBT. THE ASSESSI NG OFFICER DISALLOWED 25% OF THE ALLEGED NON-GENUINENESS PURCHASES BEING PROFIT EARNED FROM SUCH PURCHASES. ON APPEAL BEFORE THE LD. CIT(A), TH E DISALLOWANCE WAS RESTRICTED TO 12.5% ON THE BASIS OF DECISION OF HO NBLE GUJARAT HIGH COURT IN SMITH P SHETH 219 TAXMAN 85 (GUJ). THUS, FURTHE R AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRE SENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE THE SER VICE OF NOTICE OF HEARING THROUGH RPAD FOR THE DATE OF HEARING FIXED FOR TODA Y. THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE SUBMISSION OF LD. DR FOR THE REVENUE AND TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. GROUND NO.1 OF THE APPEAL RELATES TO VALIDITY OF RE-OPENING. THE L D. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW AND SUBMIT S THAT THE ASSESSEMNT6 WAS RE-OPENED ON THE BASIS OF CREDIBLE INFORMATION FROM SALES TAX DEPARTMENT. THE INFORMATION WAS TANGIBLE MATERIAL A ND WAS SUFFICIENT TO RE- OPEN THE ASSESSMENT. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE SEEN THAT THE ASSESSMENT WAS RE- OPENED ON THE BASIS OF SPECIFIC INFORMATION RECEIVE D BY ASSESSING OFFICER ABOUT THE BENEFICIARIES OF ACCOMMODATION ENTRIES AV AILED BY ASSESSEE FROM HAWALA DEALERS. IN OUR VIEW, THE CREDIBLE INFORMATI ON RECEIVED BY THE ITA NO. 835 MUM 2018-SHRI RAJENDRA BHANWARLAL DOSHI 4 ASSESSING OFFICER FROM SALES TAX DEPARTMENT WERE SU FFICIENT AND CREDIBLE AND TANGIBLE MATERIAL FOR RE-OPENING THE ASSESSMENT . THUS, WE DO NOT FIND MERIT IN THE GROUND NO.1 OF THE APPEAL, WHICH IS DI SMISSED. 5. GROUND NO.2 RELATES TO SUSTAINING THE PARTIAL DISAL LOWANCE ON ACCOUNT OF BOGUS PURCHASES. THE LD. DR FOR THE REVENUE SUPPORT ED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FOR THE REVENUE FURTHER SUB MITS THAT INVESTIGATION WING OF INCOME-TAX DEPARTMENT AND THE SALE TAX DEPA RTMENT, GOVERNMENT OF MAHARASHTRA MADE A FULL-FLEDGED ENQUIRY, THE PAR TIES FROM WHOM THE ASSESSEE HAS SHOWN THE PURCHASES ARE BOGUS HAWALA D EALERS. THE HAWALA DEALERS WERE ENGAGED IN ISSUING THE BOGUS BILLS WIT HOUT DELIVERY OF ANY MATERIAL OR GOODS. THE ASSESSEE IS ONE OF THE BENEF ICIARIES WHO HAVE AVAILED ACCOMMODATION BILL ONLY TO INFLATE THE EXPENSES AND TO BRING OUT THE PROFITABILITY IN ORDER TO AVOID THE TAX. THE LD. DR FOR THE REVENUE FURTHER SUBMITS THAT THE LOWER AUTHORITY HAS ALREADY GIVEN SUFFICIENT RELIEF TO THE ASSESSEE. THE ASSESSEE IS NOT ENTITLED FOR ANY FURT HER RELIEF. 6. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THA T THE ASSESSING OFFICER HAS IDENTIFIED THE DISPUTED/HAWALA PURCHASES FROM T HREE PARTIES OF RS. 28,93,617/-. HOWEVER, WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER ADDED ONLY 25% OF SAID PURCHASES AS ESTIMAT ED PROFIT EARNED ON SUCH PURCHASES. THE ASSESSING OFFICER DISALLOWED TH E PURCHASES TO THE EXTENT OF PROFIT EMBEDDED IN THE ALLEGED BOGUS PURCHASES T HE LD. CIT(A) RESTRICTED ITA NO. 835 MUM 2018-SHRI RAJENDRA BHANWARLAL DOSHI 5 THE DISALLOWANCE TO 12.5% BY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN SIMIT P SHETH(SUPRA). WE HAVE NOTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FERROUS & NON-FERROUS ME TAL. THEREFORE, CONSIDERING THE NATURE OF BUSINESS ACTIVITIES OF TH E ASSESSEE, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD CIT(A) IN SUSTAINING THE DISALLOWANCE @12.5% OF THE ALLEGED BOGUS PURCHASES. NO DOCUMENTARY EVIDENCE OR ANY SUBMISSION EXPLAINING THE FACT IS F ILED BY ASSESSEE. THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF LOWER AUTHORITIES. HENCE, GROUND NO.2 OF THE APPEAL RAISE D BY ASSESSEE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2018. SD/- SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 04.10.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI