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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
आयकर अपीलीय अधिकरण “E” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI श्री महावीर स िंह, न्याययक दस्य एविं श्री व ीम अहमद, लेखा दस्य के मक्ष । BEFORE SRI MAHAVIR SINGH, JM AND SRI WASEEM AHMED, AM आयकर अपील सुं./ (यिर्ाारण वर्ा / Assessment Year 2011-12) आयकर अपील सुं./ (यिर्ाारण वर्ा / Assessment Year 2012-13) M/s Tulsiani Sumer The Dy. Commissioner of Associates Income Tax, Central Circle 1103, Tulsiani Chambers, 5(3), बनाम/ 212, Nariman Point, Air India Building, 19 th Floor, Vs. Mumbai-400 021 Nariman Point, Mumbai-400 021 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./PAN No. AAAFT5527B अपीलार्थी की ओर े / Appellant by : Ms. Arati Vissanji, AR प्रत्यर्थी की ओर े / Respondent by : Shri Amit Pratap Singh, DR ुिवाई की तारीख / Date of hearing: 14.11.2019 घोर्णा की तारीख / Date of pronouncement : 29.11.2019 आदेश / O R D E R महावीर ससुंह, न्याययक सदस्य/ PER MAHAVIR SINGH, JM:
These appeals of assessee are arising out of order of the Commissioner of Income Tax (Appeals)]-53, Mumbai [in short
2 | P a g e 120 & 121/Mum/2018 Tulsiani Sumer Associates CIT(A)], in Appeal Nos. CIT(A)-53/DCCC-5(3)/IT-53,174/2014- 15 even dated 04.10.2017. The Assessments were framed by the Asst. Commissioner of Income Tax, Circle-36, Mumbai (in short ACIT/ AO) for the A.Ys. 2011-12 & 2012-13 vide order dated 12.03.2014 & 26.03.2015 under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
The only issue in these appeals of assessee are against the order of CIT(A) confirming the action of the AO by treating the whole amount as bogus purchases. The facts and circumstances are exactly identical except quantum hence, we take the facts from AY 2011-12 and decide the issue.
Briefly stated facts are that the assessee engaged in the business of construction in real estate. The AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase amounting to ₹25,22,563/- for AY 2011-12 and ₹6,92,292 for AY 2012-13 as admitted by these hawala dealers in their deposition before the authorities. The same read as under: -
3 | P a g e 120 & 121/Mum/2018 Tulsiani Sumer Associates For AY 2011-12
Name of party Amount Manibhadra Trading Co 5,32,826 Siddhivinayak Corporation 9,11,999 Rahul Traders 8,80,412 Nirmal Trading 1,97,326 Total 25,22,563 For AY 2012-13
Name of party Amount Manibhadra Trading Co 4,62,970 Rahul Traders 41,869 Nirmal Trading 1,87,453 Total 6,92,292 4. During the course of assessment proceedings and during appellate proceedings, the assessee submitted all the documentary evidences such as inward register, stock register, payment received against such sales, receipt of material purchases, account payee cheque. According to the AO, the assessee failed to establish the genuineness of the purchase as the parties were not appeared before the AO despite issuance of notice under sections 133(6) and 131 of the Act. Accordingly, he made addition of whole amount as unproved purchase at ₹25,22,563/- for AY 2011-12 and ₹6,92,292 for AY 2012-13 to the return income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A), who confirmed the addition made by the AO by observing in para 4.4 as under: -
4 | P a g e 120 & 121/Mum/2018 Tulsiani Sumer Associates
“4.4 I have considered the submissions carefully, in this case, the AO had provided the documents showing that the concerned parties were only issuing accommodation bills without supplying any material. Such evidence obtained from the Sales Tax Authority was specifically provided to the appellant. Instead of making any efforts to establish the genuineness of the purchases or to repudiate the evidence provided by the AO, the appellant has merely harped on its claim that it was not required to maintain delivery challan and transport documents in respect of its purchases. It is further noted that the assessment order was passed on 12.03.20 14 and as per the appellant, it had filed reply dated 10.2.20 14 in which mere ledger accounts of the parties were filed even after show cause notice dated 4.2.20 14 was issued by the assessing officer. However to allow further opportunity to the appellant was asked whether these parties can be produced and whether there bank statements can be furnished. Time was given up to 30.9.2017. However, the appellant could not furnish
5 | P a g e 120 & 121/Mum/2018 Tulsiani Sumer Associates such bank statements nor could it produce these parties. This is not a case of trading sales where an argument can be made that there were corresponding sales. No records/ evidence of item purchased and its disposal is available. in these facts, the ground of appeal is dismissed.”
Aggrieved, assessee preferred the appeal before Tribunal.
We have considered the issue and gone through the facts and circumstances of the case. We find from the facts of the case and argument of both the sides, that the CIT(A) has confirmed the addition by applying whole amount as bogus purchases. We noted from the facts of the case that the AO has not doubted the sales made by assessee out of these purchases alleged to be bogus. Further, we also noted that the assessee has maintained stock register payments are through banking channels either on purchases or on sales made. Only deficiency on the part of the assessee is that the assessee has not maintained any transportation receipts or weighment slips for verification of the AO or could not produce the parties. Hence, we are of the view that only alternative left is that a reasonable profit can be estimated in view of the decision of Hon’ble Gujarat High court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj). Hence, we direct the AO to recompute the