Income Tax Appellate Tribunal - Mumbai
Sanjay Mishrimal Mehta, Mumbai vs Acit Cir. - 2, Thane, Thane on 10 January, 2018
ITA.No.6460/Mum/2016 Sanjay Mishrimal Mehta Assessment Year-2009-10 आयकर अपीलीय अिधकरण "आई" ायपीठ मुं बई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI जोिग र िसंह , ाियक सद एवं ी मनोज कुमार अ वाल, लेखा सद के सम ।
BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./I.T.A. No.6460/Mum/2016 (िनधा रण वष / Assessment Year: 2009-10) Sanjay Mishrimal Mehta Assistant Commissioner of 202, Maa Encor Income Tax Circle-2 बनाम/ Opp. Purnima Hospital Thane Daulat Nagar, Road No.8 Vs. Borivali(E), Mumbai-400 066 थायी ले खा सं . /जीआइआर सं ./PAN/GIR No. ADUPM-0256-H (अ पीलाथ# /Appellant) : ($%थ# / Respondent) Assessee by : Jitesh Bhageria, Ld.AR Revenue by : Ram Kumar Tiwari, Ld. DR सुनवाई की तारीख / : 13/12/2017 Date of Hearing घोषणा की तारीख / : 10/01/2018 Date of Pronouncement आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)
1. The captioned appeal by assessee for Assessment Year [AY] 2009-10 assails the order of the Ld. Commissioner of Income-Tax (Appeals)-1 [CIT(A)], Mumbai, Appeal No.275/15-16 dated 20/07/2016 on legal grounds as well as on merits. Ground No.1 which contest 2 ITA.No.6460/Mum/2016 Sanjay Mishrimal Mehta Assessment Year-2009-10 validity of reassessment proceedings u/s 148 has been withdrawn by Ld. Counsel for Assessee [AR] during hearing before us and hence the same stands dismissed as being not pressed. The sole surviving ground contest estimated additions against certain alleged bogus purchases made by the assessee. The assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax Circle-2, Thane [AO] u/s 143(3) read with Section 147 of the Income Tax Act, 1961 on 05/03/2015.
2.1 Facts leading to the same are that the assessee being resident individual engaged as civil work contractors was assessed u/s 143(3) read with Section 147 at Rs.90,90,170/- after sole addition of certain alleged bogus purchases for Rs.40,26,370/- as against returned income of Rs.50,63,802/- filed by the assessee. Statutory notices u/s 143(2) and 147 were duly served on the assessee. The original return of income was processed u/s 143(1). The assessee reflected Net Profit of 3.4% against Gross Turnover of Rs.15.12 Crores. 2.2 During reassessment proceedings, pursuant to receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchase bills, it was noted that the assessee stood beneficiary of such bogus purchase bills to the tune of Rs.4,02,63,696/- from nineteen such parties. The assessee defended the purchases on the ground that the material was consumed in the contract work undertaken by the assessee. However, not convinced, Ld. AO estimated Net Profit rate of 6% in assessee's line of business and consequently, disallowed 10% of alleged bogus purchases which came to Rs.40.26 Lacs.
3 ITA.No.6460/Mum/2016Sanjay Mishrimal Mehta Assessment Year-2009-10
3. Aggrieved, the assessee contested the same without any success before Ld. CIT(A) vide impugned order dated 20/07/2016 where Ld. CIT(A) noted the assessee could not file evidence of transportation of the purchased goods to his site and the assessee failed to produce any of the supplier to confirm the transactions. Finally, after considering assessee's various submissions and upon factual matrix. Ld. CIT(A) confirmed the stand of Ld. AO. Aggrieved, the assessee is in further appeal before us.
4. The Ld. AR reiterating the contentions as raised before lower authorities, contested the estimation made by lower authorities whereas Ld. Departmental Representative [DR] contended that the estimation was quite fair and reasonable.
5. We have carefully heard the rival contentions and perused relevant material on record. We are of the considered opinion that there could be no sale without purchase /consumption of material since the assessee was engaged in civil contract work and the contract work was duly certified by the municipal authorities. The sales turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. The purchases were backed by invoices. At the same time, the assessee could not produce any confirmation from any of the impugned nineteen suppliers and could not prove delivery of material, which cast serious doubt on assessee's claim. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of Value Added Tax [VAT] against 4 ITA.No.6460/Mum/2016 Sanjay Mishrimal Mehta Assessment Year-2009-10 such bogus purchases, which lower authorities have rightly done so. However, considering the fact that the assessee carried out the major work on sub-contract basis (more than 88% of Gross Turnover) and already reflected Net profit rate of 3.39%, we reduce the estimation of addition to 5% of alleged bogus purchases which comes to Rs.20,13,185/-. The orders of lower authorities stand modified to that extent.
6. Resultantly, the assessee's appeal stands partly allowed in terms of our above order.
Order pronounced in the open court on 10th January,2018 Sd/- Sd/-
(Joginder Singh) (Manoj Kumar Aggarwal) ाियक सद / Judicial Member लेखा सद / Accountant Member मुंबई Mumbai;िदनां क Dated : 10.01.2018 Sr.PS:- Thirumalesh आदे श की ितिलिप अ !े िषत/Copy of the Order forwarded to :
1. अपीलाथ# / The Appellant
2. $%थ# / The Respondent
3. आयकर आयु,(अपील) / The CIT(A)
4. आयकर आयु, / CIT - concerned
5. िवभागीय $ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai
6. गाड0 फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पं जीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai