Income Tax Appellate Tribunal - Mumbai
Acit 21(2), Mumbai vs Pravin U Jain, Mumbai on 4 August, 2017
ITA No. 3971/M/2016 Pravin U Jain Assessment Year-2009-10 आयकर अपीलीय अिधकरण "बी" ायपीठ मुं बई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" 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.3971/Mum/2016 (िनधा रण वष / Assessment Years: 2009-10) Assistant Commissioner of Pravin U. Jain Income Tax 21(2) Prop. M/s. Unique Industrial Room No.115, 1st Floor Corporation Piramal Chambers बनाम/ Flat No.10 Parel Vs. DSK Trilok CHS Ltd.,469 Mumbai -400 012 K.W.Chitle Marg Dadar(W) Mumbai -400 028 थायी ले खा सं . /जीआइआर सं ./PAN/GIR No. AACPJ-8270-B (अ पीलाथ# /Appellant) : ($%थ# / Respondent) Assessee by : Lalit Kumar Chhajed,Ld. AR Revenue by : Suman Kumar, Ld. DR सुनवाई की तारीख / : 03/08/2017 Date of Hearing घोषणा की तारीख / : 04 /08/2017 Date of Pronouncement 2 ITA No. 3971/M/2016 Pravin U Jain Assessment Year-2009-10 आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)
1. The captioned appeal by Revenue for Assessment Year [AY] 2009- 10 assails the order of Ld. Commissioner of Income Tax (Appeals)-33 [CIT(A)], Mumbai dated 14/03/2016 qua relief provided to assessee against certain bogus purchases.
2.1 Briefly stated, the assessee being resident individual engaged in the business of trading and manufacturing of kitchen home products etc. under proprietorship concern namely Unique Industrial Corp. was subjected to an assessment u/s 143(3) read with Section 147 for the impugned AY on 11/03/2014 where the income of the assessee was determined at Rs.2,83,71,753/- as against returned income of Rs.31,71,413/- filed by the assessee on 17/09/2009. The return was initially processed u/s 143(1) but subjected to reassessment proceedings pursuant to receipt of certain information from Sales Tax Department that the assessee stood beneficiary of certain bogus purchase bills. Accordingly, notice u/s 148 was issued to the assessee on 20/03/2013 and reassessment proceedings u/s 147 were completed after certain addition on account of bogus purchases and the same are the subject matter of this appeal.
2.2 During assessment, it was noticed that the assessee made aggregate purchases of raw material for Rs.2,52,00,340/- from four suspicious dealers. The notices u/s 133(6) was issued to these parties 3 ITA No. 3971/M/2016 Pravin U Jain Assessment Year-2009-10 but the same were returned back undelivered. The assessee contended that raw material was consumed in producing finished goods which was sold to reputed parties and there could be no sales without any purchases. The assessee furnished purchases details and details of payment made to the alleged bogus suppliers. However, not convinced, Ld. AO noted that the assessee could not substantiate actual delivery of goods and the details provided were not sufficient. Finally, these purchases were treated as bogus purchases and 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 14/03/2016 where the assessee raised similar contentions and asserted that reflected GP rate in the impugned AY was in tune with earlier years and hence, disallowance was not justified. Reliance was also placed on many judicial pronouncements to support various contentions. However, Ld. CIT(A) noted that the assessee suffered similar disallowance in AY 2010-11 where the first appellate authority restricted the impugned additions to the extent of 10%. Following the same, the addition was, thus, restricted to 10% of bogus purchases. Aggrieved, the revenue is in appeal before us.
4. The Ld. Departmental Representative [DR] supported the stand taken by Ld. AO and contended that mere payment through banking channels was not sufficient to establish the genuineness of the purchases. Moreover, none of the supplier was found at the given address and the onus to substantiate the purchases squarely lie on the 4 ITA No. 3971/M/2016 Pravin U Jain Assessment Year-2009-10 assessee, which he has failed to discharge and therefore, full disallowance thereof was justified.
4.1 Per contra, Ld. Counsel for Assessee [AR] drew our attention to the fact that the assessee contested the order of Ld. CIT(A) for AY 2010- 11 before this Tribunal vide ITA No. 6342/Mum/2014 order dated 05/04/2017 where the addition has been estimated @7% by the Tribunal.
5. We have heard the rival contentions and perused the relevant material on record including decision of Tribunal in assessee's own case for AY 2010-2011. We are convinced with the arguments of the revenue that the assessee has failed to discharge the primary onus of proving the purchases as it could not produce sufficient evidences to show actual delivery of material and also could not produce confirmatory letters from the alleged bogus suppliers and thus failed to substantiate the purchases. However, at the same time, the assessee is a manufacturer & trader and there could be no sales without purchase of raw material. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases, which Ld. CIT(A) has rightly done.
6. The assessee has contended that the addition be restricted to 7% of bogus purchases following the decision of this Tribunal in assessee's own case for AY 2010-2011. However, we find that this is revenue's appeal and therefore, no further relief could be granted to assessee in 5 ITA No. 3971/M/2016 Pravin U Jain Assessment Year-2009-10 this appeal. During proceedings, the respective representatives did not point out any cross appeal / cross objection by the assessee for impugned AY. Therefore, we find the decision of Ld. CIT(A) to be fair and reasonable and hence, confirm the same.
7. Resultantly, the revenue's appeal stands dismissed.
Order pronounced in the open court on 04th August, 2017.
Sd/- Sd/-
(Joginder Singh) (Manoj Kumar Aggarwal)
ाियक सद / Judicial Member लेखा सद / Accountant Member
मुंबई Mumbai; िदनांक Dated : 04.08.2017 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. गाड/ फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुं बई / ITAT, Mumbai