RAJESH K. BHANUSHALI, MUMBAI V. INCOME TAX OFFICER 27(3)(4), MUMBAI

ITA 962/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6784 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 133(6); 147; 148; 2

Judgement Text

ITA.NO.962/MUM/2018 RAJESH K. BHANUSHALI ASSESSMENT YEAR- 2010-11 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.962/MUM/2018 ( / ASSESSMENT YEAR:2010-11) RAJESH K.BHANUSHALI 1/22, JAY MAHAVIR R.B.MEHTA ROAD GHATKOPAR(E) BORIVALI-400 077 / VS. INCOME TAX OFFICER - 22(2 )(4) 4 TH FLOOR, TOWER NO.6 VASHI RAILWAY STN. COMPLEX VASHI, MUMBAI- 400 703 ! ./ ./PAN/GIR NO. AADPB-1516-F ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : N. HEMALATHA, LD. DR / DATE OF HEARING : 22/05/2018 / DATE O F PRONOUNCEMENT : 22/05/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-25 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-25/IT-15/2014-15 DATED 05/12/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER-22(2)(4), MUMBAI [AO] U/S 14 3(3) READ WITH ITA.NO.962/MUM/2018 RAJESH K. BHANUSHALI ASSESSMENT YEAR- 2010-11 2 SECTION 147 OF THE INCOME TAX ACT,1961 ON 14/11/2014. WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.13 .19 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS. 4.31 LACS E-FILED BY THE ASSESSEE ON 13/10/2010 WHICH WAS PROCESSED U/S 143(1). THE ISSUE UNDER APPEAL IS QUANTUM ADDITION AGAINST CERTAIN ALLEGED BOGUS PURCHASES. NONE HAS APPEARED FOR ASSESSEE DESPITE NOTICE AND THEREFORE, LEFT WITH NO OPTION, WE PROCEED TO DISPO SE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEA RING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 THE REASSESSMENT PROCEEDINGS WERE INITIATED UPO N RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS AND IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS PURCHASE BILLS TO THE TUNE OF RS.18,52,664/- FROM AN ENTITY NAMELY UMIYA SALES AGENCY PRIVATE LIMITED . CONSEQUENTLY, STATUTORY NOTICE U/S 148 DATED 24/0 3/2014 WAS ISSUED TO THE ASSESSEE WHICH WAS FOLLOWED BY NOTICE S U/S 143(2) AND 142(1). THE ASSESSEE WAS PROPRIETOR OF AN ENTITY NA MELY FORTUNE FABRICS WHICH WAS ENGAGED IN THE BUSINESS OF TRADING OF HDPE BAGS. 2.2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE, INTER-ALIA, SUBMITTED LEDGER EXTRACTS, VAT RETURN AND COPIES OF INVOICES ETC. TO PROVE THE GENUINENESS OF PURCHASES. IT WAS ALSO SUB MITTED THAT CORRECT FIGURES OF PURCHASES MADE BY THE ASSESSEE FROM THE SAID PARTY WAS RS.12,94,550/-. HOWEVER, NOTICES ISSUED U/S 133(6) TO CONFIRM THE TRANSACTIONS ELICITED NO SATISFACTORY RESPONSE. THE ASSESSEE ALSO FAILED TO PRODUCE THE SAID PARTY TO CONFIRM THE TRANSACTIO NS. THE FACTUAL MATRIX LED THE LD. AO TO TREAT THE PURCHASES AS BOGUS PURCHASES. ACCORDINGLY, ITA.NO.962/MUM/2018 RAJESH K. BHANUSHALI ASSESSMENT YEAR- 2010-11 3 AN AMOUNT OF RS.8,87,640/-, BEING THE PEAK OF PURCH ASES, WAS ADDED TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 05/12/2 017 WHEREIN LD. CIT, PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCE MENTS, RESTRICTED THE IMPUGNED ADDITIONS TO 12.5% OF ALLEGED BOGUS PURCHASES WHICH CAME TO RS.1,61,819/-. STILL AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS PLACED RELIANCE ON THE STAND OF LOWER AUTHORITIES. 4. UPON CAREFUL CONSIDERATION, WE ARE OF THE CONSID ERED OPINION THAT THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL SINCE THE ASSESSEE WAS ENGAGED IN TRADING ACTIVITIES. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND T HE PAYMENTS WERE THROUGH BANKING CHANNELS. THE ASSESSEE WAS IN POSSE SSION OF PRIMARY PURCHASES DOCUMENTS. AT THE SAME TIME, THE ASSESSEE COULD NOT CONCLUSIVELY SUBSTANTIATE THE PURCHASES MADE BY HIM AND FAILED TO PRODUCE THE SAID PARTY TO CONFIRM THE TRANSACTIONS. ALL THESE FACTORS CAST A SERIOUS DOUBT ON ASSESSEES CLAIM. THEREFORE, IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR P ROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZ E FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL I N THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHAS ES, WHICH LD. CIT(A) HAS RIGHTLY DONE. THEREFORE, FINDING THE SAM E IN ORDER, WE DISMISS THE ASSESSEES APPEAL. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ITA.NO.962/MUM/2018 RAJESH K. BHANUSHALI ASSESSMENT YEAR- 2010-11 4 ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MAY, 2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22. 05.2018 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. $- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI