INDUSTRIAL STEEL ROLLING MILL & CO., KALYAN V. ITO WARD 2(1), KALYAN

ITA 84/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8531 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARM VEER SINGH
• Assessee Lawyers: DR P DANIEL
• Keywords: Bogus purchase; Business income; Reassessment proceedings
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER ITA NO.84/MUM/2019(A.Y.2009-10) M/S. INDUSTRIAL STEEL ROLLING MILLS & CO. C/O. GAYAKWAD AND ARRACKEN, 401, GANESH TOWER, OPP. PETROL PUMP, AGRA ROAD, KALYAN WEST, THANE 421 301 PAN; AACFI 4400N ...... APPELLANT VS. ITO,WARD 2(1), KALYAN ..... RESPO NDENT APPELLANT BY : DR. P. DANIEL RESPONDENT BY : SHRI DHARM VEER S INGH DATE OF HEARING : 13/01/2020 DATE OF PRONOUNCEMENT : 13/01/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-3, THANE [ IN SHORT THE CIT(A) ] DATED 16/10/2018 FOR THE ASSESSMENT YEAR 2009-10. 2. DR. P. DANIEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF STEEL ROLLING. ON THE BASIS OF INFORMATION RECEIVED FROM MAHARASHTRA SALES TAX DEPARTMENT, THE ASSESSMENT F OR ASSESSMENT YEAR 2009-10 2 ITA NO.84/MUM/2019(A.Y.2009-10) WAS REOPENED ON THE GROUND THAT ASSESSEE HAS INDULG ED IN OBTAINING BOGUS PURCHASES BILLS. THE LD. AUTHORIZED REPRESENTATIV E FOR THE ASSESSEE SUBMITTED THAT IN PROCEEDINGS BEFORE CIT(A) ASSESSEE HAS PRODUCED COP IES OF THE LEDGER EXTRACT, PURCHASE BILLS, BANK STATEMENTS, CONFIRMATION OF PA YMENTS, ETC. TO PROVE THE GENUINENESS OF THE PURCHASES. THE CIT(A) SOUGHT R EMAND REPORT FROM THE ASSESSING OFFICER ON THE DOCUMENTS FURNISHED BY THE ASSESSEE. IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT CONTROVERTED THE DOCUMENT S FURNISHED BY THE ASSESSEE. THE ONLY REASON FOR MAKING THE ADDITION WAS THAT TH E ASSESSEE HAS FAILED TO PRODUCE THE PARTIES FROM WHOM PURCHASES WERE MADE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER I N ASSESSMENT PROCEEDINGS MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES AGGR EGATING TO RS.1,46,457/- FROM THREE PARTIES. THE CIT(A) UPHELD THE FINDINGS OF A SSESSING OFFICER. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE SALES MADE BY THE ASSESSEE HAVE NOT BEEN DOUBTED. HENCE, WITHOUT PURCHASES THERE C ANNOT BE SALES. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED THAT THE ALLEGED BOGUS PURCHASES ARE ONLY 0.52% OF THE TOTAL PURCHASES. THE ASSESSEE HAS MADE ALL THE PURCHASES FROM GENUINE PARTIES AND HAS NOT INDULGED IN OBTAINING ANY BOGUS BILLS TO INFLATE EXPENSES. 3. SHRI DHARM VEER SINGH REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED TH E IMPUGNED ORDER. THE LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE ASSESSEE NEVER PARTICIPATED IN THE REASSESSMENT PROCEEDINGS. DESPITE REPEATED NOTICES, THE ASSESSEE FAILED TO APPEAR AND PROVE GENUINENESS OF THE PURCHASES IN QUESTION. THUS, THE ASSESSING OFFICER WAS CONSTRAINED TO PASS ASSE SSMENT ORDER UNDER SECTION 144 RW.S. 147 OF THE ACT. EVEN IN THE PROCEEDINGS BEFO RE CIT(A), THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES, HENCE, THE CI T(A) CONFIRMED THE ADDITION. 3 ITA NO.84/MUM/2019(A.Y.2009-10) 4. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.1,46,457/- I.E. ENTIRE ALLEGED BOGUS PURCHASES MADE BY THE ASSESSEE FROM ALLEGED HAWALA OPERATORS. UNDISPUTEDLY, THE ASSESSEE FAILE D TO APPEAR BEFORE THE ASSESSING OFFICER, HENCE, THE ASSESSING OFFICER PASSED THE AS SESSMENT ORDER INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. THE ASSESSEE HAS FILED VARIOUS DOCUMENTS BEFORE THE CIT(A) TO PROVE GENUINENESS OF THE TRANSACTIO NS. THE REVENUE HAS NOT DISPUTED THE CONTENTIONS OF THE ASSESSEE THAT PURCHASES UNDE R QUESTION ARE ONLY A MINISCULE FRACTION OF THE TOTAL SALES DECLARED BY THE ASSESSE E. EVEN OTHERWISE, THE REVENUE HAS NOT RAISED ANY DOUBT OVER SALES DECLARED BY THE ASS ESSEE. WITHOUT PURCHASES, THERE CANNOT BE SALES. CONSIDERING THE VOLUME OF PURCHA SES UNDER THE SHADOW OF DOUBT, WE FIND NO REASON TO DOUBT THE GENUINENESS OF PURCH ASES. IN THE PECULIAR FACTS OF THE CASE, WE SEE NO REASON TO UPHOLD THE ADDITION ON AC COUNT OF BOGUS PURCHASES. 5. IN THE RESULT, IMPUGNED ORDER IS SET-ASIDE AND APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, T HE 13TH DAY OF JANUARY, 2020. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 13/01/2020 VM , SR. PS(O/S) 4 ITA NO.84/MUM/2019(A.Y.2009-10) 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