Income Tax Appellate Tribunal - Mumbai
Ito 4(3)(1), Mumbai vs Priti Gold (India) P. Ltd, Mumbai on 23 August, 2017
ITA No 63/Mum/2017 Priti Gold (India) Private Limited Assessment Year 2009-10 आयकर अपीलीय अिधकरण "ए" ायपीठ मुं बई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI ी डी.टी. गरािसया, ाियक सद एवं ी मनोज कुमार अ वाल, लेखा सद के सम ।
BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./I.T.A. No. 63/Mum/2017 (िनधा रण वष / Assessment Year: 2009-10) Income Tax Officer 4(3)(1) Priti Go ld (India) Privat e Ltd .
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Room No.648, 6 Floor, 2 n d Floor,Office No.20-21
बनाम/ Shanti Bhuwan
Aaykar Bhavan
M.K.Road Vs. 198, Kalbadevi Road
Mumbai- 400 020 Mumbai -400 002
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AADCP-7703-P (अ पीलाथ" /Appellant) : (#$थ" / Respondent) Assessee by : M.S.Mathuria, Ld. AR Revenue by : Saurabh Deshpande, Ld. DR सुनवाई की तारीख / : 21/08/2017 Date of Hearing घोषणा की तारीख / : 23/08/2017 Date of Pronouncement 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)-9 [CIT(A)], Mumbai dated 20/10/2016 qua relief provided to the assessee against certain bogus purchases of Rs.47,45,081/-.
2ITA No 63/Mum/2017 Priti Gold (India) Private Limited Assessment Year 2009-10 2.1 Briefly stated the assessee being resident corporate assessee engaged in the business of manufacturing of gold ornaments, was subjected to an assessment u/s 143(3) read with Section 147 for impugned AY on 19/03/2015 at Rs.55,78,510/- after addition of bogus purchases for Rs.47,45,081/-. The original return was filed at Rs.8,33,420/- on 10/09/2009, which was processed u/s 143(1). 2.2 The reassessment proceedings were initiated upon receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchases bills and it was noted that the assessee stood beneficiary of such bogus purchase bills to the tune of Rs.47,45,081/- from two parties. Consequently, notice u/s 148 dated 12/03/2014 was issued which was followed by statutory notices u/s 142(1)/143(2).
2.3 To confirm the purchase transactions, notice u/s 133(6) was issued to the alleged bogus supplier, however, the same was returned back un- served with remarks 'not known' which was confronted to the assessee. The assessee contended that the purchases were genuine since the goods manufactured out of the purchases were sold subsequently and there could be no sale without purchase. However, not convinced, Ld. AO, placing reliance on several judicial pronouncements, treated the same as bogus purchases and added the same to the income of the assessee.
3. Aggrieved, the assessee contested the same with success before Ld. CIT(A) vide impugned order dated 20/10/2016 where Ld. CIT(A) noted that the assessee produced ledger extracts, purchases bills, bank statements, quantitative details etc. before Ld. AO and the turnover of 3 ITA No 63/Mum/2017 Priti Gold (India) Private Limited Assessment Year 2009-10 the assessee was not disputed by the Ld. AO. Finally, convinced with the various contentions / submissions of the assessee, Ld. CIT(A) deleted the impugned additions, against which the revenue is in further appeal before us.
4. The Ld. Departmental Representative [DR] drew our attention to the fact that notices u/s 133(6) sent to both the suppliers were returned back unclaimed and the assessee could not establish delivery / consumption of material before Ld. AO and therefore, the additions were justified. It was further contended that the onus to substantiate the purchases squarely lied on the assessee and mere payment through banking channels was not sufficient to prove the same since no confirmations etc. was filed by the assessee before lower authorities and none of the parties could be produced for confirmation of purchases.
5. Per Contra, Ld. Representative for Assessee [AR] contended that the turnover was accepted and books were not rejected. The accounts were duly audited and the assessee was in possession of primary purchase documents and therefore, Ld. CIT(A), after due application of mind, rightly deleted the same. Alternatively, Ld. AR stated that the assessee deals in Gold ornaments which were subjected to VAT @1% as per state VAT laws and therefore, a reasonable estimate may be made for some addition to make up for the shortcomings.
6. Heard the rival contentions and perused relevant material on record. We are of the considered opinion that there could be no sale without purchases. The sales turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. On the other hand, the assessee could not produce 4 ITA No 63/Mum/2017 Priti Gold (India) Private Limited Assessment Year 2009-10 confirmations from the alleged bogus suppliers and further notices sent u/s 133(6) were returned back undelivered in both the cases. 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 VAT against bogus purchases. We estimate the same @5% since the goods in question were subjected to VAT rate of 1%. Accordingly, we sustain the addition to the extent of 5% of bogus purchases of Rs.47,45,081/- which comes to Rs.2,37,254/-.
7. Resultantly, the revenue's appeal stands partly allowed.
Order pronounced in the open court on 23rd August, 2017.
Sd/- Sd/-
(D.T. Garasia) (Manoj Kumar Aggarwal)
ाियक सद / Judicial Member लेखा सद / Accountant Member मुंबई Mumbai; िदनां क Dated : 23. 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, मुंबई / ITAT, Mumbai