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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAVISH SOOD, JM
आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2010-11) DCIT-8(2)(1) M/s. Singh Hindustan Marine P. Ltd. Aaykar Bhavan D/13, TTC Industrial Area बनाम/ Room No.624 MIDC Turbe Vs. M.K. Road, Mumbai -400 020. New Mumbai- 400 705. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AADCS-8670-G (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Mr. Sumeet Chawla-Ld. AR Revenue by : Mr. N. Padmanabhan-Ld. DR सुनवाई की तारीख/ : 08/01/2020 Date of Hearing घोषणा की तारीख / : 08/01/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2010-11 contest the order of Ld. Commissioner of Income- Tax (Appeals)-14, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-14/IT-110/16-17 dated 15/06/2018 qua certain relief provided to the assessee against alleged bogus purchases.
2 M/s. Singh Hindustan Marine P. Ltd. Assessment Year :2010-11 2. The Ld. Authorized Representative for Assessee sought dismissal of the appeal by citing recent low tax effect Circular No. 17/2019 dated 08/08/2019 issued by CBDT. The Ld. DR controverted the same by submitting that the reassessment was triggered pursuant to receipt of information from an external agency i.e. Sales Tax Department and therefore, the appeal stood protected by the exception given in the related circulars. Concurring with the submissions of Ld. DR, the said plea was rejected and the matter was proceeded with on merits. 3.1 Facts on record would reveal that the assessee being resident corporate assessee stated to be engaged in the business of servicing of life savings applications like life-rafts, rescue-boats, fire-fighting appliances etc., was assessed for year under consideration u/s. 143(3) r.w.s. 147 on 16/03/2016 wherein the income of the assessee was determined at Rs.72.16 Lacs, after sole addition of alleged bogus purchases for Rs.6.69 Lacs as against returned income of Rs.65.47 Lacs filed by the assessee on 15/10/2010 which was processed u/s.143(1). 3.2 Pursuant to receipt of certain information from Sales Tax Department, Govt. of Maharashtra, it transpired that the assessee obtained bogus purchases bills aggregating to Rs.26.78 Lacs from as many as 9 entities, the details of which have already been extracted in para-2 of the quantum assessment order. Accordingly, the case was reopened as per due process of law vide issuance of notice u/s 148 on 19/02/2015 which was followed by statutory notices wherein the assessee was directed to substantiate the purchase transactions. 3.3 The assessee defended the purchases by furnishing copies of purchase invoices, bank statements evidencing payment to suppliers 3 M/s. Singh Hindustan Marine P. Ltd. Assessment Year :2010-11 through banking channels, ledger extracts etc. But the assessee failed to substantiate the delivery of material. The service of notice issued u/s 133(6) to all the entities established that none of the parties were existing at the given addresses. The assessee failed to produce any of the suppliers despite being specifically directed to do so. Consequently, Ld. AO, relying upon the decisions of Hon’ble Gujarat in CIT V/s Bholanath Poly Fab Pvt Ltd. 355 ITR 290 and CIT V/s Simit P. Sheth 356 ITR 451 estimated the additions @25% of these purchases which resulted into an addition of Rs.6.69 lacs in the hands of the assessee.
The learned CIT(A), after considering assessee’s submissions including net profit rate reflected during the year, scaled down the estimation to 12.5%. Aggrieved, the revenue is under further appeal before us. It appears that the assessee has not preferred any further appeal against the same.
After careful consideration of rival submissions, we are of the considered opinion that the stated services could not be rendered without purchase of material. The assessee was in possession of primary purchase documents and the payments to the suppliers were through banking channels. The assessee was a corporate entity and its books of accounts were subjected to audit. However, at the same time, the assessee miserably failed to substantiate the purchases and failed to produce any of the suppliers to confirm the transactions. The field enquiries revealed that none of the suppliers was existing at the given addresses. Therefore, the primary onus casted upon assessee, to prove the transactions, remained undischarged.
4 M/s. Singh Hindustan Marine P. Ltd. Assessment Year :2010-11 6. The stated factual matrix, in our considered opinion, would make it a fit case to make estimated additions to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey / unorganized market and undue benefit of VAT against such bogus purchases, which learned first appellate authority has rightly done so. Finding the estimation of 12.5% to be quite fair and reasonable, we find no reason to interfere in the impugned order. The said estimation has been made after due consideration of factual matrix as well as considering the gross profit reflected by the assessee during the year and would not require any indulgence on our part.
The appeal stands dismissed.
Order pronounced in the open court on 08th January, 2020. (Ravish Sood) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 08/01/2020 Sr.PS, Jaisy Varghese आदेशकी"ितिलिपअ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ"/ The Appellant 2. ""थ"/ The Respondent 5 M/s. Singh Hindustan Marine P. Ltd. Assessment Year :2010-11