Shailesh Bansilal Singhavi, Aurangabad V. Income-tax Officer, Ward - 3 (2), Aurangabad

ITA 878/PUN/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0583 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 04-12-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 07-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UDAY KAKNE
• Keywords: Bogus purchase
• Section: 201; 148; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL , VICE PRESIDENT . / ITA NO. 87 5 /PUN/20 1 9 / ASSESSMENT YEA R : 200 9 - 1 0 RAJESH PRAKASH SINGHAVI PLOT NO.D - 3, N - 4 CIDCO, SINGHAVI HOUSE, AURANGABAD. PAN : A DFPS5764B .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 3(2) , AURANGABAD . / RESPONDENT . / ITA NO S . 876 TO 878 /PUN/20 19 / ASSESSMENT YEA RS : 2009 - 10 TO 2011 - 12 SHAILESH BANSILAL SINGHAVI PLOT NO.D - 3, N - 4 CIDCO, SINGHAVI HOUSE, AURANGABAD. PAN : AMDPS4446D .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 3(2), AURANGABAD. / RESPONDENT 2 ITA NO S . 875 TO 881 /PUN/20 1 9 A.Y S . 200 9 - 10, 2010 - 11 & 2011 - 12 . / ITA NO S . 87 9 TO 8 81 /PUN/20 19 / ASSESSMENT YEA RS : 2009 - 10 TO 2011 - 12 LALITA SHARAD SINGHAVI PLOT NO.D - 3, N - 4 CIDCO, SINGHAVI HOUSE, AURANGABAD. PAN : A EPPS9522N .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 3(2), AURANGABAD. / RESPONDENT A SSESSEE BY : NONE REVENUE BY : SHRI UDAY KAKNE / DATE OF HEARING : 23 .12.201 9 / DATE OF PRONOUNCEMENT : 23 .12.201 9 / ORDER PER R.S. SYAL, VP : THIS BATCH OF 7 APPEALS BY THREE DIFFERENT BUT CONNECTED ASSESSEES RELATING TO ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 IN VOLVE COMMON ISSUE S . I AM , THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FIRST GROUND IN ALL THESE APPEALS IS AGAINST THE CONFIRMATION OF ACTION OF THE ASSESSING OFFICER IN ISSUING NOTICE U/S 14 8 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3 ITA NO S . 875 TO 881 /PUN/20 1 9 A.Y S . 200 9 - 10, 2010 - 11 & 2011 - 12 3. BRIEFLY STATED FACTS ARE THAT T HE ASSESSING OFFICER RECEIVED INFORMATION FROM THE MAHARASHTRA SALES TAX DEPARTMENT WHICH HAD CONDUCTED ENQUIRIES IN THE CASES OF SEVERAL DEALERS LOCATED ALL ACROSS MAHARASHTRA RES ULTING INTO UNEARTHING OF RACKET MORE THAN 1935 HAWALA DEALERS AND MORE THAN 33,700 BENEFICIARIES. SUCH A LIST OF HAWALA BENEFICIARIES INCLUDED THE NAME OF ALL THESE ASSESSEES IN THE INSTANT BATCH. THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT A ND FRAMED THE ASSESSMENT S MAKING CERTAIN ADDITIONS . THE ASSESSEE REMAINED UNREP RESENTED BEFORE THE LD. CIT(A), WHO UPHELD THE INITIATION OF REASSESSMENT. 4 . HAVING HEARD THE LD. DR AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSEE REMAINED ABSENT THROUGHOUT THE PROCEEDINGS BEFORE THE LD. CIT(A). ALL THE IMPUGNED ORDERS HAVE BEEN PASSED EX - PARTE IN AS MUCH AS THE LD. CIT(A) GAV E 9 OPPORTUNITIES TO THE ASSESSEE BUT COULD NOT CONVINCE THE M TO APPEAR. SIMILAR IS THE POSITION BEFORE THE TRIBUNAL AS WELL. THE ASSESSEES HAVE CHOSEN TO REMAIN ABSENT DESPITE NOTICE S FROM THE TRIBUNAL. I AM , THEREFORE, PROCEED ING TO DISPOSE OF THE APPE ALS EX - PARTE QUA THE ASSESSEE S . 5 . IT IS EVIDENT FROM THE IMPUGNED ORDER S THAT THE RACKET OF HAWALA TRANSACTIONS INVOLVING BOGUS PURCHASES WAS UNEARTHED BECAUSE OF THE ENQUIRIES CONDUCTED BY THE MAHARASHTRA SALES TAX DEPARTMENT, WHICH TRANSPIRED THAT THE ASSESSEES IN QUESTION WERE ALSO THE BENEFICIARIES FOR THE YEARS UNDER CONSI DERATION. SUCH INFORMATION COMING TO THE NOTICE OF THE ASSESSING OFFICER , IN MY OPINION, 4 ITA NO S . 875 TO 881 /PUN/20 1 9 A.Y S . 200 9 - 10, 2010 - 11 & 2011 - 12 CONSTITUTES VALID REASON S TO BE LIEVE ABOUT THE ESCAPEMENT OF INCOME. I, THEREFORE, HOLD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN ISSUING NOTICE U/S 148 OF THE ACT AND COMPLETING THE ASSESSMENT THEREBY. T HE IMPUGNED ORDERS ON THE QUESTION OF VALIDATION OF RE - ASSESSMENT PROCEEDING S , ARE HEREBY UPHELD . 6 . THE SECOND ISSUE RAISED IN THE INSTANT APPEALS IS AGAINST CONFIRMATION OF ADDITION AND ALSO ENHANCEMENT MADE BY THE CIT(A). THE ASSESSING OFFICER APPLIED GROSS PROFIT RATE TO THE AMOUNT OF HAWALA PURCHASES AND MADE THE ADDITION ACCOR DINGLY. FOR EXAMPLE, IN THE CASE OF SHRI RAJESH PRAKASH SINGHAVI FOR THE ASSESSMENT YEAR 2009 - 10, THE GROSS PROFIT RATE WAS 4.63%. T HE ASSESSING OFFICER APPLIED SUCH GROSS PROFIT RATE ON THE AMOUNT OF HAWALA PURCHASES OF RS.91,81,757/ - , WHICH RESULTED INTO AN ADDITION OF RS.4,25,115/ - . THE LD. CIT(A) OBSERVED THAT THE DECISION OF THE ASSESSING OFFICER IN RESTRICTING THE ADDITION TO TH E GROSS PROFIT RATE WAS NOT JUSTIFIED. HE ISSUED ENHANCEMENT NOTICE AND THEREAFTER, ENHANCED THE ADDITION TO 1 0% OF HAWALA PURCHASES , WHICH AMOUNTED TO RS.9,54,902/ - . THE ASSESSEE IS AGGRIEVED BY THE ADDITION. SIMILAR IS THE POSITION IN ALL OTHER APPEALS UNDER CONSIDERATION. 7 . IT IS SEEN THAT THE CIT(A), AFTER ENHANCEMENT NOTICE, MADE THE ADDITION @ 10% ON HAWALA PURCHASES. THE HONBLE BOMBAY HIGH COURT IN PR.CIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. , VIDE ITS JUDGMENT DATED 15.07.2019 , IN ITA NO.413/2017, HAS SUSTAINED THE ADDITION @ 10% OF THE AMOUNT OF PURCHASES BEING THE PROFIT ELEMENT THEREIN. AS THE FACTS AND CIRCUMSTANCES OF THE INSTANT APPEALS ARE 5 ITA NO S . 875 TO 881 /PUN/20 1 9 A.Y S . 200 9 - 10, 2010 - 11 & 2011 - 12 MUTATIS MUTANDIS SIMILAR, RESPECTFULLY FOLLOWING THE PRECEDENT, I UPHOLD THE ACTIO N OF CIT(A) IN CONFIRMING THE ADDITION @ 10% OF HAWALA PURCHASES IN ALL THE CASES UNDER CONSIDERATION. 8 . IN THE RESULT, ALL THE APPEALS STAND DISMISSED. ORDER PRO NOUNCED ON 23 RD DAY OF DECEMBER , 2019. SD/ - R . S . SYAL / VICE - PRESIDENT / PUNE; / DATED : 23 RD DECEMBER , 201 9 . GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT 3. THE CIT (APPEALS) - 2 , AURANGABAD . 4. THE PR. CIT - 2 , AURANGABAD . 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE 6 ITA NO S . 875 TO 881 /PUN/20 1 9 A.Y S . 200 9 - 10, 2010 - 11 & 2011 - 12 DATE 1 DRAFT DICTATED ON 23 .12.201 9 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23 .12.201 9 SR. PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 DATE OF UPLOADING OF ORDER SR. PS/PS 8 FILE SENT TO BENCH CLERK SR. PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER