N.N.CHEMICALS, KALYAN V. ITO 3(3), KAL

MA 322/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4620 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOMNATH WAJALE
• Assessee Lawyers: AJAY R SINGH
• Keywords: Bogus purchase; Corroborative evidences; Agreed addition
• Section: 69C

Judgement Text

1 MA.NOS. 322- 324/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) M.A. NO.322, 323 & 324/MUM/2019 (ARISING OUT OF ITA NOS.4281, 4282,4283/MUM/2018) (ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12) M/S N.N CHEMICALS NO. A2/302, VITHOBA KRIPA CHS KALYAN (W)-421 301 PAN : AAMPC6974B VS ITO - 3(3) RANI MANSION, MURBAD ROAD, KALYAN (W)-421 301 APPLICANT RESPONDENT APPLICANT BY AJAY R. SINGH RESPONDENT BY SOMNATH WAJALE DATE OF HEARING 19.07.2019 DATE OF PRONOUNCEMENT 28 .08.2019 O R D ER PER G MANJUNATHA: AM THESE THREE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE U/S 254(2) OF THE I.T.ACT, 1961, ARE DIRECTED AGAINST C ONSOLIDATED ORDER PASSED BY THE TRIBUNAL VIDE ITS ORDER DATED 16/01/2 019 IN ITA.NO. 4281 TO 4283/MUM/2018 FOR AY 2009-10 TO 2011-12. 2 MA.NOS. 322- 324/MUM/2019 2. THE ASSESSEE HAS MORE OR LESS TAKEN COMMON GROUN DS IN ALL MISCELLANEOUS APPLICATIONS FILED FOR THREE ASSESSME NT YEARS. THEREFORE, FOR THE SAKE OF CONVENIENCE CONTENTS OF MISCELLANEO US APPLICATION FILED BY THE ASSESSEE FOR AY 2009-10 IN M.A. 322/MUM/2019 ARE REPRODUCED AS UNDER:- 1. THE AFORESAID APPEALS FOR A.Y. 2009-10 ARE PERTA INING TO BOGUS PURCHASES U/S 69C OF THE ACT OF RS. 4,39,887/-. THE APPEAL OF THE ASSESSEE WAS DISMISSED ON UPHOLDING THE ADDITION THE 100% PURCHA SE OF TWO PARTIES AS BOGUS PURCHASE. 2. THE ASSESSING OFFICER UPHELD 100% DISALLOWANCE O F THE IMPUGNED PURCHASES WITHOUT APPRECIATING THE ASSESSEES LETTE R DTD: 26/12/2014 WITHDRAWING FROM ITS OFFER OF SURRENDER AND SUBMITT ING THE DOCUMENTARY EVIDENCES BEFORE ASSESSING OFFICER. THE ASSESSEE BA D VIDE LETTER DT 5/11/2014 AGREED TO SURRENDER THE PURCHASE ON THE C ONDITION THAT NO PENALTY WOULD BE LEVIED. HOWEVER THE OFFER WAS REJE CTED BY AO AND LETTER WAS WITHDRAWN BY ASSESSEE. BEFORE CIT(A) ASSESSEE H AD FILED WRITTEN SUBMISSION AND ALL THE SUPPORTING DOCUMENTARY EVIDE NCE . HOWEVER THE ID CIT(A) UPHELD THE 100% DISALLOWANCE , 3. BEFORE HON. ITAT ASSESSEE HAD FILED PAPER BOOK R UNNING IN 73 PAGES ENCLOSING ALL THE SUPPORTING EVIDENCE . 4. IT IS SUBMITTED THAT AT THE TIME OF HEARING OUR COUNSEL SHRI RAVINDRA POOJARY ADVOCATE INFORMED THE HONBLE BENCH THAT ISSUE IN T HE PRESENT APPEAL WAS REGARDING DISALLOWANCE OF 100% BOGUS PURCHASE, IMME DIATELY THE HONBLE JUDICIAL MEMBER ASKED THE COUNSEL THAT WHAT IS THE PERCENTAGE YOU WANT AS BOGUS PURCHASE ADDITION. THE COUNSEL ANSWERED ANYTH ING LESS THAN 12.5% AS GP IS LOW, 5. THE ID, COUNSEL WAS NOT ASKED TO ARGUE ANY FUR THER AS TO THE MERIT OF THE CASE NOR CITE ANY DECISIONS NOR EXPLANATION, THUS T HERE WAS NO OCCASION FOR THE COUNSEL TO STATE ANYTHING FURTHER- THE DR ALSO DID NOT STATE ANYTHING IN THE MATTER. IMMEDIATELY THE HEARING WAS COMPLETED STATI NG THAT THE MATTER IS HEARD. 6. HOWEVER TO OUR SURPRISE WE HAVE RECEIVED ORDER DATED 16/01/2019 ON - 13/04/2019 CONFIRMING THE 100% DISALLOWANCE. 7. THE ASSESSEE FURTHER RESPECTIVELY SUBMITS THAT DUE TO THE FACT THAT HON'BLE BENCH QUESTIONED FOR REASONABLE ADDITION WHICH WAS REPLIED BY THE COUNSEL 3 MA.NOS. 322- 324/MUM/2019 AND ACCEPTED BY THE BENCH , THERE WAS NO FURTHER DI SCUSSION OR HEARING. THIS IS THE NORMAL PRACTICE IN BOGUS PURCHASE CASES BEFO RE ITAT. THE PROPOSAL FOR SOME PERCENTAGE ADDITION WAS FROM THE BENCH AND NOT FROM COUNSEL . SECONDLY IF THE SAME WAS NOT ACCEPTABLE BENCH OUGHT TO HAVE PERMITTED THE COUNSEL TO ARGUE AND EXPLAIN THE FACTS. 8. IN SUCH A SITUATION IT WILL BE UNFAIR FOR THE ASSESSEE AS NO PROPER OPPORTUNITY WAS PROVIDED FOR ARGUING THE MATTER ON MERIT. WE HU MBLY REQUESTED THE HONBLE BENCH TO RECALL THE MATTER AND ALLOW THE PROPER OPP ORTUNITY OF HEARING. 9. THE APPLICANT IS FURTHER POINTING OUT THE FOLL OWING MISTAKE APPARENT FROM RECORD IN THE ORDER OF DIE HON, ITAT DATED JANUARY 16, 2019 ARE: A) THE APPELLATE TRIBUNAL IN ITS ORDER AT PARA 7 H ELD AS UNDER IT IS AN ADMITTED FACTS THAT THE ASSESSEE FAILED TO FILE EVEN BASIC DETAILS INCLUDING PURCHASE BILLS AND PAYMENT PROOF TO PROVE THE PURCHASES FROM THE ABOVE PARTIES,' THE ABOVE OBSERVATION IS FACTUALLY WRONG, THE ASSES SEE VIDE LETTER DTD,26/12/2014, SUBMITTED THE DOCUMENTARY EVIDENCES BEFORE ASSESSING OFFICER I.E COPIES OF PURCHASE BILLS, CORRESPONDING SALES B ILLS, DELIVERY CHALLANS, BANK STATEMENTS, SUMMARY OF SALES AND PURCHASE MONTH-WIS E, BANK CERTIFICATE, ITEM REGISTER QUANTITATIVE TALLY. LEDGER ACCOUNTS, STOCK RECONCILIATION STATEMENT, COMPARATIVE CHART OF G. P / N.P RATIO ETC . PAPER BOOK PG 20-60 FURTHER ASSESSEE LETTER DATED 10/05/2018 & WRITTEN SUBMISSION DATED 10/05/2018 SUBMITTED ALL DOCUMENTARY EVIDENCES BEFORE CIT(A) PAPER BOOK PG 61-73 B) THE APPELLATE TRIBUNAL IN ITS ORDER AT PARA 7 FU RTHER HELD AS UNDER THE ASSESSEE FIFED A LETTER DATED 05/11/2014 AND S URRENDERED TOTAL PURCHASES FROM THE ABOVE PARTIES FOR TAXATION SUBJE CT TO NON LEVY OF PENALTY AND INTEREST WHICH CLEARLY ESTABLISHED FACTS THAT P URCHASE OF ABOVE PARTIES ARE BOGUS' DURING THE REASSESSMENT PROCEEDING ASSESSEE HAS ATT ENDED BEFORE ASSESSING OFFICER NAMELY SHRI R-N. BAVISKAR, WHERE HE HAD ADV ISED THE ASSESSEE THAT IF YOU AGREE FOR ADDITION HE MAY NOT LEVY INTEREST AND PEN ALTY. HOWEVER SUBSEQUENTLY ASSESSEE REALIZED THAT NO ASSESSING OFFICE HAS POWE R TO DROP THE INTEREST AND PENALTY AND BEING MISGUIDED THE ASSESSEE HAD FILED LETTER DATED 26/12/2014 AND WITHDRAWN THE AGREED ADDITION. EVEN THE AO HAD NOT ACCEPTED THE ASSESSEE'S CONDITIONAL OFFER FOR SURRENDER. THEREFORE THE SAID LETTER IS OF IMMATERIAL AND OF NO CONSEQUENCES . PAPER BOOK PG 17-18 IN THIS CASE ASSESSEE HAS FILED ALL DOCUMENTARY EVI DENCE REGARDING THE GENIUSES OF PURCHASE BEFORE ASSESSING OFFICER AS WELL AS CT( A). THE ASSESSING OFFICER WAS NOT BROUGHT ANY EVIDENCE AGAINST ASSESSEE. THEREFOR E ADDITION AS ALLEGED PURCHASE MAY BE DELETED. 4 MA.NOS. 322- 324/MUM/2019 THE ASSESSEE FURTHER RELIES ON THE JURISDICTIONAL H IGH COURT DECISION IN CASE OF MOHOMMAD HAJI ADAM DT 11/2/2019 WHEREIN THE HON. BO MBAY HIGH COURT HAS HELD THAT IN BOGUS PURCHASE CASES ADDITION SHOULD B E RESTRICTED TO GP. THE ASSESSES ALSO RELIES ON SEVERAL OTHER COORDINATE BE NCH DECISIONS ON SAME ISSUE. 10. IN VIEW OF THE ABOVE THE PRESENT APPLICATION HA S BEEN FILED BY THE ASSESSEE. PRAYER A) ASSESSEE THEREFORE PRAYS THAT THE HON'BLE 1TAT M AY RECALL THE ORDER AND PASS A FRESH ORDER. B) ANY OTHER APPROPRIATE RELIEF AS YOUR HONOUR MAY DECIDE. 3. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED MI SCELLANEOUS APPLICATION FILED BY THE ASSESSEE, ALONG WITH ORDER OF THE TRIBUNAL, DATED 16/01/2019. WE FIND THAT THE TRIBUNAL HAS DELIBERAT ED AT LENGTH ON THE ISSUE INVOLVED IN THESE APPEALS, IN RESPECT OF ADDI TIONS MADE BY THE AO TOWARDS ALLEGED BOGUS PURCHASES FROM CERTAIN HAWALA DEALERS/SUSPICIOUS DEALERS, IN LIGHT OF FACTS BROUG HT OUT BY THE AO, DURING ASSESSMENT PROCEEDINGS AND ALSO ARGUMENTS ADVANCED BY THE LD. AR FOR THE ASSESSEE. WE, FURTHER NOTED THAT THE TRIBUN AL HAD GIVEN CATEGORICAL FINDING, IN RESPECT OF PURCHASES CLAIM S TO HAVE MADE FROM CERTAIN PARTIES, IN LIGHT OF ADMISSION OF THE ASSE SSEE COUNSEL BEFORE THE AO AND CAME TO THE CONCLUSION THAT WHEN, THE ASSESS EE HAS SURRENDERED THE INCOME BEFORE THE AO ON BEING CONFR ONTED WITH THE RESULT OF ENQUIRIES CONDUCTED, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH CLEARLY ESTABLISHED THE FACT THA T THE PURCHASES FROM THE ABOVE PARTIES ARE BOGUS AND THIS FACT WAS FURTH ER, SUPPORTED BY THE REPORT OF INVESTIGATION WING, WHICH IS ONCE AGAIN B ASED ON INFORMATION 5 MA.NOS. 322- 324/MUM/2019 RECEIVED FROM SALES TAX DEPARTMENT. IN THE LIGHT OF ABOVE OBSERVATIONS OF THE TRIBUNAL, IF WE EXAMINE THE CONTENTS OF MISCEL LANEOUS APPLICATION FILED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HA S FAILED TO MAKE OUT A CASE OF PRIMA-FACIE MISTAKE APPARENT ON RECORD FROM THE ORDER OF THE TRIBUNAL, WHICH COULD BE RECTIFIED U/S 254(2) OF TH E I.T.ACT, 1961. ACCORDINGLY, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE FOR AY 2009-10, 2010-11 AND 2011-12 ARE DISMISSED. 4. ALL THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 .08.2019 . SD/- SD/- MAHAVIR SINGH G. MANJUNATHA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 28.08.2019 THIRUMALESH, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. 6 MA.NOS. 322- 324/MUM/2019 BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI //TRUE COPY//