RISHABHA CONSUMER PRODUCTS PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER - WARD 15(3)(1), MUMBAI

ITA 921/MUM/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0341 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice; Onus to prove
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 921 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 1 1 ) RISHABH CONSUMER PRODUCTS PVT. LTD. FLAT NO.705, MITHA TOWER, SECTOR 17, PLOT NO.41, NAVI MUMBAI 400 705 PAN AACCR8140D . APPELLANT V/S INCOME TAX OFFICER WARD 15(3)(1), MUMBAI . RESPONDENT ASSESSEE BY : MS. DINK LE HARIYA REVENUE BY : SHRI S.K. BEPARI DATE OF HEARING 11 .09.2018 DATE OF ORDER 11.09.2018 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 17 TH NOVEMBER 2017 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 24 , MUMBAI, FOR THE ASSESSMENT YEAR 20 1 0 11 . 2 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN MANUFACTURING OF OIL AND OIL RELATED PRODUCT. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 15 TH OCTOBER 2010, DECLARING TOTAL INCOME OF ` 6,15,890. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME 2 RISHABH CONSUMER PRODUCTS PVT. LTD. TAX ACT, 1961 (FOR SHORT THE ACT ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION OBTAINED FROM THE SALES TAX DEPARTMENT, STATE OF MAHARASHTRA, THE ASSESSING OFFICER FOUND THAT PURCHASES OF ` 78,92,528, SHOWN TO HAVE BEEN MADE BY THE ASSE SSEE FROM LAXMI ENTERPRISES IS NOT GENUINE AS THE SAID PARTY HAS BEEN IDENTIFIED AS A HAWALA OPERATOR PROVIDING ACCOMMODATION BILLS. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE A SSESSMENT PROCEEDINGS, WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH PURCHASES, THE ASSESSEE DENIED OF HAVING MADE ANY PURCHASES FROM THE SAID PARTY. HOWEVER, REJECTING THE SUBMISSIONS OF THE ASSESSEE , THE ASSESSING O FFICER HELD THAT THE PURCHASES MADE BY THE ASSESSEE FROM LAXMI ENTERPRISES REMAINED UNPROVED. HOWEVER, ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE FOR ADDITION OF GROSS PROFIT @ 11.17% OF THE BOGUS PURCHASES THE ASSESSING OFFICER MADE ADDITION OF ` 8, 81,595. BEING AGGRIEVED OF SUCH ADDITION, THOUGH, THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, THE LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 3 . THOUGH, THE ASSESSEE HAS CONTESTED THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) RAISING VARIOUS GROUNDS INCLUDING VALIDITY OF 3 RISHABH CONSUMER PRODUCTS PVT. LTD. RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AS WELL AS VIOLATION OF RULES OF NATURAL JUSTICE, HOWEVER, AT THE TIME OF HEARING OF APPEAL BEFORE ME, THE ONLY SUBMISSION MADE BY THE LEARNED AUTHORISED REPRESENTATIVE IS, THOUGH, FROM THE STAGE OF ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE HAS BEEN CLAIMING THAT IN THE RELEVANT PREVIOUS YEAR, IT HAS NOT EFFECTED ANY PURCHASE FROM LAXMI ENTERPRISES , THE CLAIM OF TH E ASSESSEE WAS NOT CONSIDERED PROPERLY . THOUGH, THE LEARNED AUTHORISED REPRESENTATIVE AGREED THAT PURCHASES FROM LAXMI ENTERPRISES WERE SHOWN IN THE VAT AUDIT REPORT, HOWEVER, SHE SUBMITTED THAT THE ASSESSEE, IN FACT, HAS NOT MADE ANY PURCHASES FROM THE SA ID PARTY. THEREFORE , SHE REQUESTED FOR AN OPPORTUNITY TO PROVE SUCH FACT BEFORE THE ASSESSING OFFICER. 4 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS). 5 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE BASIC CONTENTION OF THE ASSESSEE BEFORE ME IS, IT HAS NOT MADE ANY PURCHASE FROM LAXMI ENTERPRISES DURING THE RELEVANT PREVIOUS YEAR. THOUGH, FROM THE DISCUSSION OF THE ASSESSING OFFICER AND THE LE ARNED COMMISSIONER (APPEALS) IT APPEARS THAT THE ASSESSEE ITSELF HAS SHOWN PURCHASES FROM LAXMI ENTERPRISES IN THE VAT AUDIT 4 RISHABH CONSUMER PRODUCTS PVT. LTD. REPORT, HOWEVER, IT IS EQUALLY TRUE THAT IN COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE THE LEARNED COMMISSIONER (APPEALS) T HE ASSESSEE HAS CLAIMED THAT IT HAS NOT MADE ANY PURCHASES FROM LAXMI ENTERPRISES DURING THE RELEVANT PREVIOUS YEAR. 6 . BEFORE ME, THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE WAS SERIOUSLY HANDICAPPED IN PLACING THE REAL FACTS BEFO RE THE DEPARTMENTAL AUTHORIES DUE TO UNAVAILABILITY OF RELEVANT RECORDS AND DOCUMENTS IN ITS OFFICE, HENCE, HAS REQUESTED THE ASSESSING OFFICER TO SUPPLY CERTAIN DOCUMENTS. 7 . HAVING CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE, I AM OF THE VIEW THAT THE ASSESSEE DESERVES AN OPPORTUNITY TO ESTABLISH ITS CLAIM THAT IT HAS NOT EFFECTED ANY PURCHASE FROM LAXMI ENTERPRISES IN THE RELEVANT PREVIOUS YEAR. HOWEVER, THE ONUS TO PROVE SUCH FACT THROUGH PROPER AND AUTHENTIC DOCUMENTARY EVIDENCE IS ENTIRELY ON THE ASSESSEE. ACCORDINGLY, I RESTORE THE ISSUE RELATING TO THE ADDITION MADE ON ACCOUNT OF ALLEGED BOGUS PURCHASES TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN VIEW OF THE ABOVE, GROUNDS NO.2 AND 3 ARE AL LOWED FOR STATISTICAL PURPOSES AND GROUND NO.1 IS DISMISSED AS NOT PRESSED. 5 RISHABH CONSUMER PRODUCTS PVT. LTD. 8 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.09.2018 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 11.09.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI