MITESH CHIMANLAL SAVLA, MUMBAI V. INCOME TAX OFFICER WARD 21(2)(3), MUMBAI

MA 245/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5538 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MULLAMUDI
• Keywords: Bogus purchase; Business income; Principle of natural justice
• Section: 254(2); 13; 22; 11

Judgement Text

1 MA 245/MUM/2018 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) M.A. NO.245/MUM/2018 (ARISING OUT OF ITA NO.4567/MUM/2016) (ASSESSMENT YEAR: 2009-10) MITESH CHIMANLAL SAVLA 15/16, DIVYA MAHAL GYAN MANDIR ROAD, DADAR(W) MUMBAI-400 028 PAN : AMWPS2822A VS ITO,WARD - 21(2)(3) 105, PIRAMAL CHAMBERS PAREL, MUMBAI-400 012 APPLICANT RESPONDENT APPLICANT BY POOJAN MEHTA RESPONDENT BY SAMATHA MULLAMUDI DATE OF HEARING 23 .09 .2019 DATE OF PRONOUNCEMENT 01 . 10 .2019 O R D ER PER G. MANJUNATHA: AM THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON AND REQUESTED TO RECALL ORDER OF THE TRIBUNAL IN ITA.NO .4567/MUM/2016, DATED 27/09/2017 FOR AY 2009-10. 2 MA 245/MUM/2018 2. THE ASSESSEE HAS NARRATED FACTS AND MISTAKES STA TED TO BE APPARENT IN THE ORDER OF THE TRIBUNAL, DATED 27/09/ 2017. THE RELEVANT CONTENTS OF MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ARE REPRODUCED AS UNDER:- MAY IT PLEASE YOUR HONOURS : [1] CAPTIONED APPEAL I.T.A. NO.4567/MUM/2016 OF WAS HEARD ON 20.09.2017 BY HONBLE SHRI SAKTIJIT DEY, (JUDICIAL MEMBER) AND SHRI G.MANJUNATHA(ACCOUNTANT MEMBER) IN C BENCH OF THE TRIBUNAL. CAPTIONED APPEAL WAS LISTED LAST AT SERIAL NO.14 OF THE CAUSE LIST. [2] APPEAL ORDER WAS PRONOUNCED ON 27.09.2017. COPY OF THE SAID APPEAL ORDER IS ANNEXED HERETO AND MARKED AS EXHIBIT A [3] SAID APPEAL ORDER WAS RECEIVED BY THE APPLICANT , SHRI MITESH CHIMANLAL SAVLA ON 02.01.2018. [4] IT IS SOLEMNLY DECLARED AND AFFIRMED THAT---- [4.1] DETAILED PAPER BOOKS CONSISTING PAGE NOS. 0 01 TO 232 WERE FILED IN ADVANCE ON 10.08.2017 BEFORE THE HONBLE BENCH WITH COPY TO D.R. [4.2] ON THE DATE OF HEARING FACT SHEET CONSISTIN G PAGE NOS. 1 TO 6 WAS FILED INTER ALIA POINTING OUT THAT. [1] [A] NO SEARCH AND / OR SURVEY ON THE APPELL ANT UNDER THE INCOME TAX ACT, 1961 AS WELL AS UNDER THE MAHARASHTRA VAT, ACT , 2002 DURING THE RELEVANT FINANCIAL YEAR. [B] THE APPELLANT IS AN INDIVIDUAL AND CARRYIN G ON HIS PROPRIETARY BUSINESS IN TRADE NAME AND STYLE OF MESSRS. SAVLA ENTERPRISE S HAVING REGISTERED PLACE OF BUSINESS AT 15/16, DIVYA MAHAL, CIYAN MANDIR ROA D. DADAR (WEST), MUMBAI -400028 THE APPELLANT IS RESELLER OF MATERIA LS AND ACCESSORIES REQUIRED BY GARMENT INDUSTRIES. [C] THE APPELLANT IS ASSESSED UNDER PAN : AMWP S-2822-A. THE APPELLANT IS REGISTERED DEALER UNDER THE MAHARASHTRA VALUE AD DED TAX ACT, 2002. [D] REGULAR BOOKS OF ACCOUNTS MAINTAINED AND S AID BOOKS OF ACCOUNTS DULY AUDITED UNDER THE INCOME TAX ACT, 1961 AND UNDER THE MAHARASHTRA VAT ACT, 2002. [E] BOOKS OF ACCOUNTS WERE NOT REJECTED BY TH E AO. [F] AO SOLELY RELIED ON ALLEGED INFORMATION R ECEIVED FROM THE WEBSITE OF THE MAHARASHTRA SALES TAX DEPARTMENT .' DGIT (INV) FOR INITIATION OF RE- ASSESSMENT PROCEEDINGS. 3 MA 245/MUM/2018 [G] AO DID NOT FIND ANY INFLATION IN PURCHASE PRICE OR SUPPRESSION OF SALES, [H] PAYMENT FOR PURCHASES WERE MADE TO THE SU PPLIER THROUGH ACCOUNT PAYEE CHEQUES AND THERE IS NO CASH PAYMENT LO SUPPL IER. [I] PRICE QUOTED BY THE SUPPLIERS ARE ON THE BASIS OF SHOP DELIVERY OF THE APPELLANT - GOODS WERE DIRECTLY DELIVERED BY THE RE PRESENTATIVE OF THE SUPPLIER AT THE SHOP OF THE APPELLANT. [K] NO OCTROI PAYABLE AS GOODS ARE DELIVERED WITHIN LIMITS OF MUMBAI MUNICIPALITY. [L] AN AO, BEING A QUASI -JUDICIAL AUTHORITY, CANNOT BASE HIS CONCLUSION / DECISION ON THE FINDING OF ANY AUTHORITY UNDER ANY OTHER ACT / LAW, AND THUS ADOPT THE FINDING / CONCLUSION OF THAT AUTHORITY. [M] THERE WAS NO EVIDENCE TO SHOW THAT A PART O F THE AMOUNT PAID TO THE SUPPLIER HAD COME BACK TO THE APPELLANT. [2J [A] APPELLANT'S TWO YEARS COMPARATI VE SALES, GROSS PROFIT AND PERCENT OF GROSS PROFIT WERE AS UNDER ASST YEAR TOTAL SALES GROSS PROFIT PERCENTAGE OF GROSS PROFIT 2008-09 1,31,48,396 13,55,666 10.31 % 2009-10 1,45,16,865 14,81,952 10.21 % [B] IMPUGNED ADDITIONS MADE WITHOUT ANY INVESTIGATI ON BY THE AO; [C] TOTAL SALES WERE AT 1,45,16,865/= IS FULLY ACCE PTED BY THE AO; |D] RATE OF GROSS PROFIT AND NET PROFIT FULLY ACCEP TED BY THE AO; [C] DETAILS OF PURCHASE DULY SUPPORTED WITH C OPIES OF INVOICES / LEDGER ACCOUNT COPIES OF CHEQUES ISSUED TO THE SUPPLIER WE RE FILED TO PROVE ALL PAY MENU WERE BY ACCOUNT PAYEE CHEQUES DULY ACCOUNTED I N THE AUDITED HOOKS OF ACCOUNTS. [3] LEARNED CIT (A) WHILE PASSING APPEAL ORDE R NO. CIT (A) - 33 / RG. 21/ 334 / 15 - 16 DATED 27.04.2016 HAS ERRED IN SUSTENA NCE OF ADDITION U/S.69 C TO THE EXTENT OF RS. 18,58,158 SOLELY RELYING ON GU JARAT HIGH COURT JUDGMENT IN CIT VS SIMIT P. SHETH (2013) 356 ITR 451 (GUJ) A ND WITHOUT CONSIDERING THE DECISIONS OF JURISDKTIONAL HIGH COURT / IT AT CITED AND RELIED ON HY THE APPELLANT [4] FOLLOWING ARE THE PARAMETERS FOR PUBLISHI NG NAMES OF 'SUSPICIOUS'' DEALERS BY THE SALES TAX DEPARTMENT OF THE STATE OF MAHARASHTRA. SR. NO. DESCRIPTION OF PARAMETERS 01 TAX CREDITS (ITC) FROM SUPPLIERS WHO ARE ''COMPOSIT ION DEALERS' FILING ONLY FORM 232; 02 TAX CREDITS (ITC) FROM SUPPLIERS NOT SHOWING TAXABL E SALES IN RETURNS: 4 MA 245/MUM/2018 [5] RELIED ON FOLLOWING DECISIONS BEFORE THE LEARNE D CIT(A)-33 03 EXCESS TAX CREDITS IN ANNEXURE J-2. OF BUYER WHERE SUPPLIER HAS COMPLETE ANNEXURE J-L BUT HAS SHOWN NO SALES TO THE BUYER 04 EXCESS TAX CREDITS IN ANNEXURE J-2 OF BUYER WHERE S UPPLIER HAS FILED COMPLETE AIMEXURE J-L BUT HAS SHOWN LESS SALES TO T HE BUYER. 05 EXCESS TAX CREDITS IN ANNEXURE J-2 CLAIMED BY BUYER WHERE GROSS PURCHASE AMOUNT MATCHES WITH GROSS SALES SHOWN BY S ELLER IN ANNEXURE J-1 06 TAX CREDITS (ITC) FROM SUPPLIERS WHO ARE RETURN NON -FILERS FOR THE COMPLETE YEAR; 07 TAX CREDITS (ITC) FROM REGISTRATION CANCELLED SUPPL IERS, 08 TAX CREDITS (ITC) FROM TINS NOT EXISTING IN 'MAHAVIKAS' REGISTRATION DATABASE. 09 ASKED TO PAY M 'PART-I OF FORM E-704 UNDER THE M VAT ACT, 2002; 10 ASKED TO PAY IN 'PART-I' OF FORRN E-704 UNDER THE C ST ACT,1956 11 TAX CREDITS (ITC) FROM SUPPLIERS NOT FILING RETURNS / NOT PAYING TAXES / CLOSED DOWN BUSINESS OR SHIFTED WITHOUT INTIMATION FILED WITH THE DEPARTMENT SR. NO. W APPELLANT / RESPONDENT CITATION PRONOUNCED ON PB PAGE NO 01 IMPERIAL IMP & EXP ITA 5427/MUM/20L5 18.03.2016 9 02 MARUTI IMPEX 1TA 3823/MUM/20L4 09.03.2016 9 03 HIRALAL CHUNILAL JAIN ITA 1275 - 2545 AND4547 /MUM/20L4 01.01.2016 9 04 SHORELINE HOLD PVT. LTD ITA 964/MUM/2015 I9.06.2015 9 05 ITO VS. PARESH ARVIND GANDHI ITA 5706/MUM/20L3 13.05.2015 9 06 ITO VS DEEPAK POPATLAL G&LA ITA 5920/MUM/2013 27.03.2015 9 5 MA 245/MUM/2018 SR. NO. APPELLANT / RESPONDENT CITATION PRONOUNCED ON PB PAGE NO. 13 ITO VS. EAGLE IMPEX TTA 56WMUM./2010 AND ITA 5748 / MUM 2010 22.02.2013 10 14 DOT V JITENDRA S. MUTANT ITA 6178/MUM/2007 30.11.2011 10 15 SHRI MADHUKANT B GANDHI ITA 1950/'MUM/2009 23.02.2010 10 16 BABULAL C. BORANA VS. ITO &ORS. (2006 )2821TR 0251 (BOMBAY HIGH COURT) 10 17 CLT V, NANGALIA FABRICS (P.) LID (2015)229 TAXMAN 0460 (GUJ. HIGH COURT) 10 18 YIF C PROJECTS (P) LTD V DCIT (2010) 37 SOT 130 (DELHI) 11 07 ACIT VS RAMILA PRAVIN SHAH ITA 5246/MURN/2013 05.03.2015 9 08 KOLTE PATIL DEVELOPERS VS C1T ITA 1411 TO 1415 / PN/2013 20.02.2015 9 09 ACIT VS G. V &SONS ITA 2229 AND 2240 / MUM/ 20 12 05.12.2014 9 10 RAMESH KUMAR & CO I TA. 2959/ MUM/ 2014 23. 11.2014 10 11 GANPATRAJ A SANGHAVI ITA 2826 /MUM/2013 05.11.2014 10 12 DCITVS RAJEEVG. KALATHI! ITA 6727/MUM/2012 (2015) 67 SOT 0052 (MUMBAI) (URO) 20.08. 2014 10 6 MA 245/MUM/2018 19 CLT VS. HI LUX AUTOMOTIVE (P) LTD. (2009) 23 DTR (DELHI HIGH COURT) 385 11 20 TTO V PERMANAND (2007J) 107 TTJ 395 (JODHPUR) 11 21 JAGDAMBA TRADING COMPANY V ITO (2007) 107 TTJ 39 8 JD) N 22 RAJESHP SONI VS. ACIT (2006) 100 TTJ (AHD) 892 11 23 ITO VPUKHRAJ N JAIN (2006 ) 99 TTJ 364 (MUM) 11 24 SHTI RAMA MULTI LECH LT D V ACIT (2005) 92 TTJ 568 (AHD) 11 25 SARGAR BOSE VS. ITO (1996) 56 ITD( CAL) 561 12 26 CIT VM K BROTHERS (1987) 163 ITR 249 (GUJ) 12 [6] APPELLANT FURTHER RELY ON FOLLOWIN G DECISIONS BEFORE THIS HON'BLE TRIBUNAL SR. NO. APPELLANT / RESPONDENT CITATION PRONOUNCED ON PB PAGE NO 01 CIT VS NIKUNJ EXI MP ENTERPRISES (P) LTD. (2015)372 ITR 61 9 (BOM) 02 CIT VS. ASHISH INTERNATIONAL ITA NO. 4299 OF 2009 DATED 22.02.2011 (BOMBAY HIGH COURT) 7 MA 245/MUM/2018 .3 CIT VS. VAMAN INTERNATIONAL (P)I.TD. ITA NO. 794/M UM/2015 DATED 16 TH DEC.2016(BOMBAY HIGH COURT) AFFIRMING TRIBUNAL'S DECISION IN VAMAN INTERNATIONAL (P) LID. (ITA NO. 794 / MUM / 2015,DATED 16TH NOV., 2016 04 YUNUS HAJI IBRAHIM FAZALWALA VS. ITO (2016)240 TAXMAN 0198 (GUJ) 05 CIT V. MANISH ENTERPRISES (201 5) 232 TAXMAN 115(CA) (HC) 06 ACIT VS TARLA R SHAH IT.A. NO. 5295 / MUM/2013 02.02.201 6 07 ACIT V JAYBHARAT TEXTILES & REAL ESTATE LTD ITA.NO. 5163/ MUM/ 2013 24.02.2016 08 DCIT V. SHIV SHANKAR R SHARMA ITANO.5149/MUM /2014 &1TA NO.4260/MUM/ 2015 16.09.2016 09 ITO V. KARSAN NANDU ITA NO. 2651/MUM/ 2016 30.11.2016 10 ACIT VS. MAHESH K. SHAH (2017)148DTR TRIB(MUMBAI) (TRIB) 001 31.01.2017 11 CANNON INDUSTRIES (P) LTD. VS. DC1T (2015)113 DTR_TRIB (MUMBAI) (TRIB) 327 17.10.2014 12 DY CIT V. SELVEL ADVERTISING PV.LTD. (201 5) 37 ITR 611 (KRTKATA)(TRIB.) [4.3] IN THE COURSE OF HEARING, LEARNED MEMBERS VERBALLY OPINED THAT THEY WILL FOLLOW VIEWS OF THE MUMBAI TRIBUNAL IN CATENA OF DECISIONS AND WILL RESTRICT IMPUGNED ESTIMATED PROFIT @ 12.5 % ON ALLEGED BOGUS PURCHASES. [4.4] WITH DUE RESPECT AND JUST TO AVOID MULTIPL E APPELLATE PROCEEDINGS, MY COUNSEL CONCEDED THE OPINION OF LEARNED MEMBERS AND HUMBLY REQUESTED THEM TO GIVE SET-OFF OF GROSS PROFIT ALREADY DECLAR ED LOR RELEVANT ASSESSMENT 8 MA 245/MUM/2018 YEAR: 2009 - 10 AS PER AUDITED TRADING AND PROFIT A ND LOSS ACCOUNT AT 10.21 % (KINDLY REFER SUB-PARA 2[A] OF [PARA 4.2] HERE ABOV E) AND NET ADDITION OF 2.29 % [SAY 2.30%) MAY KINDLY BE DIRECTED TO BE ADDED TO THE TAXABLE INCOME DECLARED BY THE APPLICANT . FOR THIS PROPOSAL HON'B LE MEMBERS' ATTENTION WAS ALSO DRAWN TO DECISION OF H BENCH OF ITAT, MUMBA I IN 'RATNAGIRI STAINLESS PVT.LTD., VS ITO IIN ITA.NO. 4463/MUM/2016 PRONOUNC ED ON 04.04.2017 [4.5] IN SUPPORT OF THE ABOVE SUBMISSION, COPY OF DECISION OF D BENCH OF ITAT, MUMBAI M 'SHRI RUPESH CHIMANLAL SAVLA VS ITO IN ITANO. 6179 TO 6L82_/_MUM/2016 PRONOUNCED ON 30.12.2016 WAS ALSO F ILED WHEREIN HON'BLE MEMBERS DIRECTED THE ASSESSING OFFICER TO DISALLOW 2 % OF' IMPUGNED PURCHASES TO MEET THE ANOMALIES. INCIDENTALLY SAID SHRI RUPESH CHIMANLAL SAVLA'' IS REAL BROTHER OF THE APPLICANT AND IS RUN NING SIMILAR BUSINESS THAT OF THE APPLICANT, AS PROPRIETOR OF MESSRS. SAVLA INTER NATIONAL [4.6] WITH DUE RESPECT, IT IS NOTICED THAT WHIL E PASSING ABOVE SAID APPEAL ORDER IN ITA. NO. 4567/MUM/2016 FOR SAID ASSESSMEN T YEAR: 2009-10, THROUGH OVERSIGHT, ABOVE SUBMISSIONS / DECISIONS CI TED ARE ESCAPED TO BE CONSIDERED BY HON'BLE MEMBERS AND REMAINED TO BE AD JUDICATED BY THEM AS PER THE LAW. [4.7] ON THE FACTS AND UNDER THE CIRCUMSTANCES AND IN THE INTEREST OF NATURAL JUSTICE, IMPUGNED APPEAL ORDER IN I T.A. NO. 4567_/ _MUM/2016 PASSED BY BENCH 'C' ON 20.09.2017 (PRONOUNCED ON 27.09.2017) MAY KINDLY HE RECALLED TO RECTIFY THE MISTAKE APPARENT AND DUE OPPORTUNITY OF HEARING MAY KINDLY BE GIVEN TO THE APPLICANT. [4.8] IT IS FURTHER AFFIRMED THAT THE APPLICANT HA VE NOT FILED ANY OTHER MISCELLANEOUS APPLICATION U/S.254(2) BEFORE THIS HO NBLE TRIBUNAL AGAINST THE SAME APPEAL ORDER. 3. WE HAVE HEARD THE LD. COUNSELS OF BOTH SIDES AND PERUSED MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ALO NG WITH ORDER OF THE TRIBUNAL, DATED 27/09/2017. WE FOUND THAT THE ASSES SEE HAS FAILED TO MAKE OUT A PRIMA-FACIE CASE OF MISTAKES APPARENT ON RECORD FROM THE ORDER OF THE TRIBUNAL IN ITA.NO.4567/MUM/2016, DATE D 27/09/2017, BUT WHAT THE LD. AR FOR THE ASSESSEE SEEKING IS TO REVI EW THE DECISION RENDERED BY THE TRIBUNAL IN THE GIVEN FACTS AND CIR CUMSTANCES OF THIS 9 MA 245/MUM/2018 CASE. WE, FURTHER NOTED THAT THE ASSESSEE IS REQUES TING TO REDUCE ESTIMATION OF PROFIT ON ALLEGED BOGUS PURCHASES FRO M 12.5% TO 2% BASED ON CERTAIN JUDGMENTS OF CO-ORDINATE BENCH LISTED IN PARA 5 OF MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. WE FIND THAT ESTIMATION OF INCOME FROM ALLEGED BOGUS PURCHASES DEPENDS UPON FACTS OF EACH CASE AND IT CANNOT BE CONSIDERED AS COVERED BY ANY OTHER CASE DECIDED BY THE TRIBUNAL, UNLESS THE ASSESSEE DEMONSTRATES W ITH EVIDENCES THAT FACTS OF ITS CASE IS IDENTICAL TO THE FACTS CONSIDE RED BY TRIBUNAL IN OTHER CASES. IN THIS CASE, ON PERUSAL OF DETAILS FILED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS CITED PLETHORA OF JUDICIAL PR ECEDENTS, HOWEVER FAILED TO PROVE THAT FACTS OF THE PRESENT CASE ARE SIMILAR TO FACTS OF CASE LAWS RELIED UPON BY THE ASSESEE. WE FURTHER NOTED T HAT AS PER PROVISION OF SECTION 254(2), THE SCOPE OF THE TRIBUNAL IS LIM ITED TO THE EXTENT OF RECTIFYING MISTAKES APPARENT, ON THE FACE OF THE OR DER. SINCE, THE ASSESSEE HAS FAILED TO MAKE OUT A CASE OF PRIMA FAC IE MISTAKE APPARENT ON RECORD AND CONSIDERING FACTS AND CIRCUMSTANCES O F THIS CASE AND ALSO TAKEN NOTE OF SCOPE OF PROVISION OF SECTION 254(2) OF THE I.T.ACT, 1961, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO MERI T IN MISCELLANEOUS APPLICATION FILED BY THE ASSESSE TO RECALL ORDER OF THE TRIBUNAL AND HENCE, THE SAME IS DISMISSED. 10 MA 245/MUM/2018 4. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 .10.2019. SD/- SD/- SAKTIJIT DEY G M ANJUNATHA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 01.10.2019 THIRUMALESH, SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//