ASST CIT 32(3), MUMBAI V. SANJAY DHOKAD, MUMBAI

ITA 929/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8583 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Bogus purchase; Unexplained expenditure; Rule of consistency; Difference of opinion; Onus to prove; Change of opinion
• Section: 69C; 143(3); 133(6); 147; 148

Judgement Text

, B BB B INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH , IOU IOUIOU IOU , BEFORE S/SH. RAJENDRA, ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER /.ITA NO.929/MUM/2015, /ASSESSMENT YEAR-2009-10 ASSTT. CIT-32(3), ROOM NO. 108, 1 ST FLOOR, BUILDING NO. C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051. VS. SHRI SANJAY DHOKAD M/S HI ROCK CONSTRUCTION CO., 903-A, GURUKUL TOWER, J S ROAD, DAHISAR (W), MUMBAI-400068 PAN: ADFPD2155F ( / APPELLANT) ( / RESPONDENT) / REVENUE BY : MS. BEENA SANTOSH (DR) ! ! / ASSESSEE BY : NONE ' ! / DATE OF HEARING : 12 -01-2017 ! '( / DATE OF PRONOUNCEMENT : 08. 02-2017 , 1961 ' 254(1) #!$! ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER PAWAN SINGH, J.M. IOU IOUIOU IOU : 1. THIS APPEAL BY REVENUE UNDER SECTION 253(1) OF THE INCOME TAX ACT( ACT) IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS ) DATED 28 TH NOV 2014 FOR ASSESSMENT YEAR 2009-10. THOUGH, THE REVENUE HAS R AISED AS MANY AS 7 GROUNDS OF APPEAL, HOWEVER, AS PER OUR CONSIDERED OPINION THE ONLY SUBSTANTIVE GROUNDS OF APPEAL IS WHETHER THEY LANDED COMMISSIONER (APPEAL S) ERRED IN DELETING THE UNEXPLAINED EXPENDITURE OF RS. 56247992/- UNDER SEC TION 69C OF THE ACT, ON ACCOUNT OF BOGUS PURCHASES. REST OF THE GROUNDS OF APPEAL IS ARGUMENTATIVE IN NATURE. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. THE ASSESSEE FILED RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 29 SEPTEMBER 2009 DECLARING TOTA L INCOME AT RS. 82,38,200/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) O N 29 DECEMBER 2011 ASSESSING TOTAL INCOME OF RS. 10558480/-. SUBSEQUENTLY, THE A SSESSMENT WAS REOPENED UNDER SECTION 147 OF THE ACT. THE NOTICE UNDER SECTION 14 8 DATED 19/2013 WAS SERVED UPON THE ASSESSEE. THE ASSESSEE DEMANDED THE REASONS OF REOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS OF RE-OPENING WERE PROVIDED TO THE ASSESSEE ALONG WITH LETTER DATED 25 TH OF JULY 2013. THE ASSESSMENT WAS REOPENED ON THE B ASIS OF 2 ITA NO. 929/M/2015 SHRI SANJAY DHOKAD. INFORMATION RECEIVED FROM THE OFFICE OF DGIT (INVES TIGATION) THAT THE ASSESSEE MADE PURCHASES FROM THE DEALERS WHO WERE PROVIDING BOGUS BILLS. IN THE INFORMATION IT WAS INFORMED THAT MAHARASHTRA GOVERNMENT HAS CARRIED OU T INVESTIGATION IN RESPECT OF THOSE PARTIES WHO WERE INVOLVED IN PROVIDING BILLS WITHOUT SUPPLY OF GOODS. THE SALE TAX DEPARTMENT OF STATE GOVERNMENT RECORDED THEIR S TATEMENTS, DEPOSITION AND AFFIDAVIT ETC. ON THE BASIS OF SAID INFORMATION THE AO HAD REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE OBJECTED TO THE REOPENING VIDE HIS LET TER DATED 12 AUGUST 2013. THE ASSESSEE OBJECTED THAT, THE SAID DEALERS WERE MEREL Y SUSPICIOUS DEALER AS PER THE DEPARTMENT; THERE WAS NO EVIDENCE TO PROVE THAT PUR CHASES ARE BOGUS AND THE REASONS WAS RECORDED ONLY ON THE BASIS OF BORROWED SATISFA CTION / THIRD-PARTY INFORMATION. THE ASSESSEE FURTHER CONTENDED THAT THIS WAS NOTHIN G BUT A CHANGE OF OPINION. THE OBJECTION OF THE ASSESSEE WAS REJECTED BY AO ON 25 SEPTEMBER 2013. THE AO PROCEEDED FOR REASSESSMENT. DURING THE RE-ASSESSMEN T PRECEDING THE ASSESSEE WAS ASKED TO FURNISH A LIST OF THE PERSON FROM WHOM PUR CHASES WERE MADE. THE ASSESSEE WAS ALSO PROVIDED IN THE LIST OF HAWALA DEALERS WHI CH WERE APPEARING IN THE LIST OF SUSPICIOUS DEALER AND WERE INDULGING IN ISSUING BOG US BILLS WITHOUT ANY SUPPLY OF GOODS OR MATERIAL FOR COMMISSION BASIS. THE AO ISSU ED NOTICE UNDER SECTION 133(6) ON 15 JAN 2014 TO ALL THOSE PARTIES. THE NOTICE ISS UED TO ALL THE PARTIES WERE RETURNED RESERVED. ON RETURN OF THE SAID NOTICES THE ASSESS EE WAS ASKED TO SHOW CAUSE AS TO WHY THE PURCHASES FROM THE SAID PARTIES AGGREGATING TO RS.5,62,47,992/- SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE. ASSESSEE FIL ED HIS REPLY VIDE REPLY DATED 28 JANUARY 2014. THE CONTENTION OF ASSESSEE WAS NOT AC CEPTED BY AO. THE AO MADE THE ADDITION OF THE AGGREGATE OF THE PURCHASES TOTA LING RS. 5,62,47,992/- IN ASSESSMENT ORDER PASSED UNDER SECTION 143(3)RWS 147 DATED 28 MARCH 2014. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE ENTIRE ADD ITION WAS DELETED, HOLDING THAT SIMILAR ADDITION WAS MADE AGAINST THE ASSESSEE FOR ASSESSMENT YEAR 2010-11 AND THE SAME WAS DELETED ON APPEAL BY HIS LD PREDECESSOR. T HUS, AGGRIEVED BY THE ORDER OF LD COMMISSIONER (APPEALS) THE REVENUE HAS FILED PRESEN T APPEAL BEFORE US. 3. WE HAVE HEARD LD DR FOR REVENUE AT LENGTH AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE LD DR FOR THE REVENUE ARGU ED THAT DURING THE ASSESSMENT 3 ITA NO. 929/M/2015 SHRI SANJAY DHOKAD. PRECEDING THE ASSESSEE FAILED TO PRODUCE ALL THE PA RTIES FOR VERIFICATION OF THE PURCHASES. ASSESSEE MADE THE PURCHASES FROM THE PAR TIES WHO WERE LISTED IN THE WEB- SITE OF SALE TAX DEPARTMENT OF GOVERNMENT OF MAHARA SHTRA AND WAS ENGAGED IN PROVIDING BOGUS BILLS WITHOUT ANY SALE OR PURCHASE OR MAKING ANY DELIVERY OF GOODS. THE ONUS TO PROVE THE PURCHASES ARE GENUINE WAS UPON THE ASSESSEE, AND THE ASSESSEE FAILED TO PROVE THE SAME BEFORE THE ASSESS ING OFFICER. THE LD DR PRAYED THAT ORDER OF AO MAY BE RESTORED BY SETTING ASIDE T HE ORDER OF LD COMMISSIONER (APPEALS). 4. WE HAVE CONSIDERED THE CONTENTION OF LANDED AR FOR THE REVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO MADE THE AD DITION DURING THE REASSESSMENT PROCEEDING HOLDING THAT THE ONUS WAS UPON THE ASSES SEE TO PROVE THE GENUINENESS OF THE EXPENDITURE. THE ASSESSEE HAS TO PROVE THAT THE SELLER WERE GENUINE SUPPLIER AND THE SAME WAS TO BE DISCHARGE BY A STRONG AND CLINCH ING EVIDENCE ,PARTICULARLY WHEN THE NOTICES UNDER SECTION 133(6) WERE RETURNED UNNE RVED. THE SALE TAX DEPARTMENT HAD RECORDED THE STATEMENT OF THE PROPRIETORS OF AL L THOSE PARTIES AND THE COPIES OF STATEMENT WERE PROVIDED TO THE ASSESSEE ALONG WITH THE SHOW CAUSE NOTICE. THE CONTENTION OF THE ASSESSEE THAT PURCHASES HAVE BEEN RECORDED BY HIM IN THE BOOKS OF ACCOUNT IS NOT TENABLE. FURTHER, THE CONTENTION OF THE ASSESSEE THAT PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES IS NOT SUFFICIEN T FOR CLAIMING ANY EXPENDITURE. DURING THE FIRST APPELLATE PROCEEDING THE ASSESSEE BESIDES THE CONTENTION AS URGED BEFORE THE AO SUBMITTED THAT THE AO MADE THE SIMILA R ADDITION FOR ASSESSMENT YEAR 2010-11 ON SIMILAR GROUNDS, AND/OR APPEAL SAME WERE DELETED. THE ASSESSEE FURTHER CONTENDED THAT BOOKS OF ACCOUNT WAS DULY AUDITED AN D PAYMENTS WERE MADE FROM UNDISCLOSED SOURCE/DISCLOSED BANK ACCOUNT AND ALL T HE PAYMENTS ARE ACCOUNT PAYEE CHEQUE AND NO REGION TO DOUBT THE PURCHASES. THE AO WAS NOT REJECTED THE BOOKS OF ACCOUNT. THE ASSESSEE FURTHER FILED THE LETTER OF C ONFIRMATION OF THE SUPPLIER COPY OF BANK STATEMENT SHOWING THE ENTRIES OF CEMENT AND ST OCK RECONCILIATION STATEMENT, FURTHER THE SALE AND PURCHASE WERE NOT DOUBTED BY T HE AO, THE SUBSTANTIAL AMOUNT OF SALE BY THE ASSESSEE WAS TO THE GOVERNMENT DEPARTME NT. THE LD CIT(A) AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE PASSED T HE FOLLOWING ORDER; 4 ITA NO. 929/M/2015 SHRI SANJAY DHOKAD. IN APPEAL I FIND THAT THE ASSESSEE HAS MADE THE S AME SUBMISSIONS WHICH ARE IDENTICAL TO THE ONES MADE BEFORE MY PREDECESSOR WH O PASSED AN ORDER IN THE CASE OF THE ASSESSEE ON THE SAME ISSUE ON 10.05.201 3. DETAILED REGIONS FOR GIVEN DECISION IN FAVOUR OF THE APPELLANT ARE FOUND IN PA RA 5.3 OF THE APPELLATE ORDER FOR AY 2010-11. I FIND THAT THE FACTS AND CIRCUMSTA NCES AND THE INFORMATION AVAILABLE ON THE JUDICIAL DECISION CONSIDERED BY MY PREDECESSOR ARE IDENTICAL TO THE CURRENT APPEAL. THEREFORE, IN THE LIGHT OF THE SAME FACTS AND ISSUE IS DECIDED IN FAVOUR OF APPELLANT FOR THE PRESENT YEAR ALSO. T HE APPEAL IS ALLOWED . 5. WE HAVE SEEN THAT LEARNED COMMISSIONER (APPEALS) AL LOWED THE APPEAL OF THE ASSESSEE ON THE BASIS OF PRINCIPLE OF CONSISTENCY A S THE SIMILAR ADDITION/DISALLOWANCE WAS DELETED FROM THE ASSESSMENT OF SUBSEQUENT YEAR. THE LD DR COULD NOT DIFFERENTIATE AS TO HOW THE FACTS FOR THE YEAR UNDE R CONSIDERATION WAS DIFFERENT FOR THE ASSESSMENT YEAR 2010-11. HENCE, WE DO NOT FIND ANY GROUND TO INTERFERE IN THE FINDING OF LD COMMISSIONER (APPEALS). IN THE RESULT THE GROUNDS OF APPEAL RAISED BY REVENUE IS DISMISSED 6. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED . *'+ ,-' VF/KDKJH . / ! 01 UKK 2 ! ' 3 . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY,2017. 5 ! 6 7 8 QJ ( , 201 7 ! 01 ; SD/- SD/- ( / RAJENDRA ( IOU IOUIOU IOU / PAWAN SINGH)) ( / ACCOUNTANT MEMBER # ( / JUDICIAL MEMBER 1 /MUMBAI, 7 /DATE: 08.02.2017 SK ' )!*+ ,+! / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ ., ( <' , 4. THE CONCERNED CIT / ., <' 5. DR E BENCH, ITAT, MUMBAI / =>0 '?, B BB B , . . . 1 6. GUARD FILE/ 0 *1 =' ' //TRUE COPY// 5 / BY ORDER, / DY./ASST. REGISTRAR ( ?, , 1 /ITAT, MUMBAI