RIGHT IMPEX, MUMBAI V. I.T.O. - 19(3)(1), MUMBAI

ITA 866/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7845 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BEPAIR
• Keywords: Bogus purchase; Accommodation entries
• Section: 147

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.866/MUM/2018 (ASSESSMENT YEAR 2009-10 ) M/S RIGHT IM PEX 26/24, 6B1, SINDHI LANE, GIRGAUM, MUMBAI-400004. PAN: AAKFR5767M VS. ITO 19(3)(1) 2 ND FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI- 400007. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI S.K. BEPAIR (SR. DR) DATE OF HEARING : 09.08.2018 DATE OF PRONOUNCEMENT : 09.08.2018 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE AC T ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-5 1, MUMBAI [LD. CIT(A)] DATED 17.12.2017 FOR ASSESSMENT YEAR 2010-1 1. THOUGH THE ASSESSEE HAS RAISED AS MANY AS FOUR GROUNDS OF APPE AL INCLUDING OF VARIOUS SUB-GROUND IN GROUND NO. 2, HOWEVER, AS PER OUR CON SIDERED VIEW, THERE IS ONLY TWO SUBSTANTIAL GROUND OF APPEAL FOR OUR CONSI DERATION. RESTS OF THE GROUND OF APPEAL ARE EITHER CONSEQUENTIAL OR PREMAT URE. THE FOLLOWING ARE THE SUBSTANTIAL GROUND OF APPEAL: 1. VALIDITY OF REOPENING OF THE ASSESSMENT UNDER SECTI ON 147 OF THE ACT. 2. DISALLOWANCE/ADDITION OF BOGUS PURCHASE @ 10% OF TH E ALLEGED BOGUS PURCHASES. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF FERROUS AND NON-FERROUS METALS, IRON & STEEL, FILED ITS RETURN OF INCOME FOR ASSESSMENT ITA NO. 866 MUM 2018-M/S RIGHT IMPEX 2 YEAR 2010-11 ON 06.09.2010 DECLARING TOTAL INCOME O F RS. 7,3,130/-. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS PRO CESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF IN FORMATION RECEIVED FROM DGIT (INVESTIGATION). THE ASSESSMENT WAS RE-OPENED. THE ASSESSING OFFICER RECEIVED THE INFORMATION THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES, WHO HAS AVAILED BOGUS ENTRY FROM HAWALA TRADER. ON THE BASIS OF INFORMATION FROM SALES TAX DEPARTMENT THE ASSESSMEN T WAS RE-OPENED. DURING THE RE-ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN PURCHASES OF RS. 47,00,245/- FRO M 4 SUCH HAWALA DEALERS. THE RE-ASSESSMENT WAS COMPLETED ON 11.01.2 016 THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER MADE THE ADDITION OF 12% OF TOTAL NONE-GENUINE PURCHASES AS PROFIT ELEMENT EMBEDDED I N SUCH TAINTED PURCHASES. ON APPEAL BEFORE THE LD. CIT(A), THE RE- OPENING WAS SUSTAINED, HOWEVER, THE DISALLOWANCE ON ACCOUNT OF BOGUS PURCH ASES WAS RESTRICTED TO 10%. THEREFORE, FURTHER AGGRIEVED BY THE ORDER OF L D. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE WAITING . WE HAVE NOTED THAT THIS APPEAL WAS LISTED ON 08.08.2018 AND WAS ADJOUR NED FOR TODAY AT THE REQUEST OF LD. AR OF THE ASSESSEE. TODAY NEITHER TH E REPRESENTATIVE OF THE ASSESSEE APPEARED NOR FILED ANY APPLICATION FOR ADJ OURNMENT. THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE LD. DR TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. ITA NO. 866 MUM 2018-M/S RIGHT IMPEX 3 4. GROUND NO.1 RELATES TO THE VALIDITY OF RE-OPENING. THE LD. LD. DR OF THE REVENUE SUBMITS THAT ASSESSMENT WAS RE-OPENED ON TH E BASIS OF SPECIFIC INFORMATION FROM THE SALES TAX DEPARTMENT THAT ASSE SSEE IS ONE OF THE BENEFICIARY WHO HAS AVAILED THE BOGUS ENTRY. THUS, THE INCOME OF THE ASSESSEE WITH REGARD TO THE BOGUS ENTRY OF PURCHASE S WERE ESCAPED ASSESSMENT, THEREFORE, THE ASSESSING OFFICER HAS SU FFICIENT REASON TO MAKE HIS BELIEF FOR REOPENING. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE RECORD. WE ARE IN AGREEMENT WITH THE CONTENTION OF LD. DR FOR THE REVENUE THAT REOPENING WAS MADE BY ASSESSING OFFICE R ON THE BASIS OF SPECIFIC INFORMATION THAT THE INCOME OF ASSESSEE HA S ESCAPED ASSESSMENT AS THE ASSESSEE HAS AVAILED ACCOMMODATION ENTRIES FROM THE HAWALA DEALERS. HENCE, WE DO NOT FIND ANY MERIT IN THE GROUND NO.1 OF THE APPEAL, WHICH WE DISMISS. 6. GROUND NO.2 RELATES TO UPHOLDING THE ADDITION OF @ 10% OF THE ALLEGED BOGUS PURCHASES. THE DR SUBMITS THAT THE SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA AND THE INVESTIGATION WING OF INCOME TA X DEPARTMENT MADE FULL-FLEDGED ENQUIRY WITH REGARD TO HAWALA DEALERS WHO WERE INDULGING IN PROVIDING ACCOMMODATION ENTERITIS WITHOUT DELIVERY OF GOODS. THE ASSESSEE HAS SHOWN PURCHASES FROM SUCH PARTIES WHOSE NAMES A PPEARED IN THE LIST OF HAWALA DEALERS. THE ASSESSEE MERELY OBTAINED ACCOMM ODATION BILLS ONLY TO INFLATE EXPENSES AND BRING OUT THE PROFITABILITY IN ORDER TO AVOID TAX. THE LD. ITA NO. 866 MUM 2018-M/S RIGHT IMPEX 4 DR FURTHER SUBMITS THAT AO HAS ALREADY GIVEN SUFFIC IENT RELIEF TO THE ASSESSEE. 7. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HA VE NOTED THAT ASSESSEE HAS SHOWN THE TOTAL PURCHASES THE STEEL ITEMS WORTH OF RS. 47,00,245/- FROM 4 PARTIES. THE NAMES OF ALL PARTIES WERE SHOWN IN T HE LIST OF BOGUS HAWALA DEALERS. DURING THE RE-ASSESSMENT, THE ASSESSING OF FICER ASKED THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS OF PURCHASES AND CO RRESPONDING SALES OF THE GOODS/MATERIAL. THE ASSESSEE FILED HIS WRITTEN SUBM ISSION, THE ASSESSEE FURNISHED DETAILS OF PURCHASES ALONG WITH PAYMENT R ECEIPT. THE REPLY OF THE ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER AFTE R CONSIDERING THE SUBMISSION OF THE ASSESSEE AND DISALLOWED THE 12.5% OF THE PURCHASES. WE HAVE NOTED THAT ASSESSING OFFICER HAS NOT GIVEN ANY FINDING OVER THE DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE IN R ESPECT OF PURCHASES AND CORRESPONDING SALES. THE ASSESSING OFFICER HAS NOT DISCUSSED ANYTHING ABOUT THE CONTENTION AS WELL AS EVIDENCES FURNISHED BY AS SESSEE. 8. THE LD. CIT(A) SUSTAINED THE ADDITION/DISALLOWANCE OF NON-GENUINE PURCHASES @ 10% ON HIS OBSERVATION THAT ASSESSEE HA S RECONCILED THE ALLEGED HAWALA PURCHASES WITH CORRESPONDING SALES AND THE A PPLICABLE VAT/SALES TAX RATE ON THE ITEMS ARE 4% IN MAHARASHTRA. WE HAV E NOTED THAT THE LD. CIT(A) HAVE GIVEN SUFFICIENT RELIEF TO THE ASSESSEE . THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY ASSESS EE. NEITHER THE ASSESSEE ITA NO. 866 MUM 2018-M/S RIGHT IMPEX 5 HAS COME FORWARD TO EXPLAIN THE FACT FOR TAKING CON TRARY VIEW. HENCE, THE GROUND NO.2 OF THE APPEAL RAISED BY ASSESSEE IS ALS O DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT O N 09.08.2018. SD/- SD/- G.S. PANNU PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 09.08.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT(A) 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. 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