ZIRCON COTEX PVT LTD.,MUMBAI V. ACIT, CC-5(4), MUMBAI

ITA 6027/MUM/2024

AI Insights

Zircon Cotex Private Limited appealed against the orders of the CIT(A)-53, Mumbai, for the assessment years 2014-15 to 2018-19, concerning disallowances related to depreciation and VAT on purchases claimed from M/s. B.N. Trading Company. The primary issue was the authenticity of the purchases, which were later found to be recorded from a non-existent entity. The Tribunal considered the evidence from a search and seizure operation and subsequent investigations, which revealed that M/s. B.N. Trading Company was not engaged in the trade of the goods purportedly purchased by Zircon Cotex. The Tribunal dismissed the appeals, affirming the lower authorities' decisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39646 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs. Smt. Jasvinder Kaur (357 ITR 638), SVD Resins & Plastics Pvt. Ltd. in ITA No. 1662 & 1664 of 2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHOR DHULE; DR
• Assessee Lawyers: TARANG MEHTA; AKASH GOGARI; ARS
• Keywords: Depreciation; Additional depreciation; Bogus purchase; Search and seizure; Bogus

Judgement Text

" | आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 6026 to 6028/Mum/2024 Assessment Years: 2014-15 to 2016-17 & I.T.A. No. 6024 & 6025/Mum/2024 Assessment Years: 2017-18 & 2018-19 Zircon Cotex Private Limited 4-A, Vikas Centre 104, S. V. Road Near Best Depot Santacruz (West) Mumbai - 400056 [PAN: AAACZ4644A] Vs Asst. CIT, Central Circle – 5(4), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Tarang Mehta – Advocate & Akash Gogari, A/Rs Revenue by : Shri Dr. Kishor Dhule, CIT D/R सुनवाई की तारीख/Date of Hearing : 12/03/2025 घोषणा की तारीख /Date of Pronouncement: 19/03/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: The above captioned five appeals are preferred against five separate orders of the ld. CIT(A)-53, Mumbai, [hereinafter ‘the ld. CIT(A)’], pertaining to AYs 2014-15 to 2018-19. 2. Since common issues are involved in the captioned appeals, they were heard together and are disposed off by way of this common order for the sake of convenience and brevity. 3. Ground No. 1 was not pressed and the same is dismissed as not pressed. Other surviving grounds relate to the disallowance of the claim of depreciation and additional depreciation claimed on alleged bogus I.T.A. No. 6026 to 6028/Mum/2024 & I.T.A. No. 6024 & 6025/Mum/2024 2 purchases from M/s. B.N. Trading Company and to the addition on account of VAT incurred on the impugned bogus purchase from BNTC. 4. Representatives were heard at length, case records carefully perused and the relevant documentary evidence brought on record, duly considered in the light of Rule 18(6) of the ITAT Rules, 1963. 5. Briefly stated, the facts of the case are that a search and seizure action was conducted in the case of Deesan Taxfab Pvt. Ltd. & others of Shirpur, District- Dhule on 17/01/2018. Various documents were found and seized. One of the loose paper bundle no. 8, page 1 to 19 found and seized during the course of search action on M/s. Deesan Taxfab Pvt. Ltd. & others, were sales invoices of M/s. B.N. Trading Company of Mumbai and on verification of the address of M/s. B.N. Trading Company, it was found that the said address was a wedding invitation card distributor’s shop. When made enquiries with the surrounding people, it came to the knowledge that they were unaware of any such concern and stated that at the given address, wedding invitation card shop is existing for last six to seven years. The AO came to the conclusion that M/s. B.N. Trading Company is a non-existent entity. The assessee was asked to justify the claim of purchases amounting to Rs.25,07,277/-. In its reply, the assessee stated that it has purchased electrical goods i.e., cables, copper conductors and wires for installation of their plant and machineries from M/s. B.N. Trading Company and paid Rs. 25,05,277.90/-, which is inclusive of VAT of Rs.1,19,298.90/- and received the physical supply of electrical goods. It was explained that the assessee properly recorded the transactions in its books of I.T.A. No. 6026 to 6028/Mum/2024 & I.T.A. No. 6024 & 6025/Mum/2024 3 accounts and produced the invoice copy of M/s. B.N. Trading Company. 5.1. Referring to the search action which revealed that the assessee had made bogus purchases which were recorded in its books of accounts, the Inspector of Investigation Unit, Nashik, was deputed for physical enquiry who submitted the following report:- 6. The AO further made enquiries from the Goods & Services Tax Department, Govt. of Maharashtra which revealed that M/s. B.N. Trading Company is reseller/retailer in commodities, namely, hair clips I.T.A. No. 6026 to 6028/Mum/2024 & I.T.A. No. 6024 & 6025/Mum/2024 4 & hair pins, handloom gamchas, handloom goods clothes. The screenshot of the enquiry is as under:- 7. On the basis of the evidence collected mentioned hereinabove, the AO concluded by holding that M/s. B.N. Trading Company is not in the trading business of copper conductors, PVC cables etc., as claimed from the invoices. As the said purchase is not claimed as expenditure but added to the block of asset, the AO disallowed the consequent depreciation and further disallowed the claim of VAT payment. 8. The assessee carried the matter before the ld. CIT(A) but without any success. 9. We have given a thoughtful consideration to the orders of the authorities below. It is trite law that the primary onus is on the assessee and the correctness of the return is a matter to be established by the assessee on whom the burden lies. For this proposition, we draw support from the decision of the Hon’ble Gauhati High Court in the case I.T.A. No. 6026 to 6028/Mum/2024 & I.T.A. No. 6024 & 6025/Mum/2024 5 of CIT Vs. Smt. Jasvinder Kaur (357 ITR 638). The assessee has only furnished copy of the invoices of M/s. B.N. Trading Company, which on verification has been found to be bogus. No further details have been furnished by the assessee demonstrating the exact location of the said company. Even the verification from the Good & Services Tax Department, Govt. of Maharashtra, mentioned elsewhere, revealed that the products in which M/s. B.N. Trading Company dealt with had no co-relation with the goods purchased by the assessee. 9.1. The decision of the Hon’ble Bombay High Court in the case of SVD Resins & Plastics Pvt. Ltd. in ITA No. 1662 & 1664 of 2018, relied upon by the ld. Counsel is entirely on different set of facts. Once the facts are distinguishable, the decision cannot be relied upon. 10. Considering the facts of the case in totality discussed hereinabove, we do not find any error or infirmity in the findings of the ld. CIT(A) and dismiss the captioned appeals of the assessee. 11. In the result, all the appeals of the assessee are dismissed. Order pronounced in the Court on 19th March, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 19/03/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs I.T.A. No. 6026 to 6028/Mum/2024 & I.T.A. No. 6024 & 6025/Mum/2024 6 आदेश की \u0015ितिलिप अ\u001aेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001c / The Appellant 2. \u0015\u001dथ\u001c / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "