ITO 4(2)(4), MUMBAI v. MINERVA BIOGENIX P.LTD, MUMBAI

ITA 133/MUM/2016 | 2010-2011
Pronouncement Date: 01-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 13319914 RSA 2016
Bench Mumbai
Appeal Number ITA 133/MUM/2016
Duration Of Justice 1 year(s) 9 month(s) 20 day(s)
Appellant ITO 4(2)(4), MUMBAI
Respondent MINERVA BIOGENIX P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-11-2017
Appeal Filed By Department
Tags No record found
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 01-11-2017
Last Hearing Date 24-10-2017
First Hearing Date 24-10-2017
Assessment Year 2010-2011
Appeal Filed On 11-01-2016
Judgment Text
ITA.NO.133 & 134/MUM/2013 MINERVA BIOGENIX PRIVATE LIMITED ASSESSMENT YEARS-2010-11 & 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI . . BEFORE SHRI D.T. GARASIA JM AND SHRI MANOJ KUMAR AGGARWAL AM ./I.T.A. NO.133 & 134/MUM/2016 ( / ASSESSMENT YEARS: 2010-11 & 2011-12) INCOME TAX OFFICER 4(2)(4) ROOM NO.647 AAYKAR BHAVAN M.K.ROAD MUMBAI-400 020 / VS. MINERVA BIOGENIX PRIVATE LIMITED 34-B 1 ST FLOOR MANGALDAS BUILDING NO.1 MANGALDAS ROAD MARINE LINES MUMBAI-400 002 ! ./ ./PAN/GIR NO. AAECM-0249-E ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : AJAY R. SINGH LD.AR RE VENUE BY : V. JANA RDHANAN LD. SR. DR / DATE OF HEARING : 24/10/2017 / DATE OF PRONOUNCEMENT : 01/11/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEALS BY REVENUE FOR ASSESSMENT YEARS [AY] 2010-11 & 2011-12 ASSAILS SEPARATE ORDERS OF LD. FI RST APPELLATE AUTHORITY. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE APPEALS WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FO R THE SAKE OF CONVENIENCE & BREVITY. FIRST WE TAKE BY ITA NO. 133 /M/2016 FOR AY ITA.NO.133 & 134/MUM/2013 MINERVA BIOGENIX PRIVATE LIMITED ASSESSMENT YEARS-2010-11 & 2011-12 2 2010-11 WHICH CONTEST THE ORDER OF LD. COMMISSIONE R OF INCOME-TAX (APPEALS)-9 [CIT(A)] MUMBAI APPEAL NO. CIT(A)-9/CIR.4/143/2014-15 DATED 05/10/2015 QUA RELIEF PROVIDED TO THE ASSESSEE AGAINST CERTAIN ALLEGED BOGUS PURCHASES. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER 4(2)(4) MUMBAI [AO] U/S 143 (3) OF THE INCOME TAX ACT 1961 ON 26/03/2013. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN THE BUSINESS OF TRADING OF PHARMACEUTICAL RAW MATERIAL AND CHEMICALS WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 26/03/2013 AT RS.1 31 02 600/- AS AGAINST RETURNED INCOME OF RS.18 58 775/- E-FILED BY THE ASSESSEE ON 15/10/2010. THE ASSESSEE HAS SUFFERED SOLE ADDITION OF RS.1 12 43 8 20/- ON ACCOUNT OF CERTAIN BOGUS PURCHASES AND SAME IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.2 DURING ASSESSMENT PROCEEDINGS IT WAS NOTED THA T THE ASSESSEE MADE PURCHASES FROM TWO ENTITIES WHO AS PER INFORM ATION RECEIVED FROM THE SALES TAX DEPARTMENT MAHARASHTRA INDULGED IN PROVIDING ACCOMMODATION BILLS WITHOUT DEALING IN ANY GOODS. T HE ASSESSEE HAD MADE AGGREGATE PURCHASES FROM THESE TWO PARTIES FOR RS.1 12 43 820/- AS PER THE FOLLOWING DETAILS:- NOTICES ISSUED U/S 133(6) TO THESE PARTIES EITHER R EMAINED UN-SERVED OR NO RESPONSE WAS RECEIVED AGAINST THE SAME. THE ASSE SSEE CONTENDED NO. NAME AMOUNT (RS.) 1. RAJ TRADERS 95 81 520/- 2. AJANTA ENTERPRISES 16 62 300/- TOTAL 1 12 43 820/- ITA.NO.133 & 134/MUM/2013 MINERVA BIOGENIX PRIVATE LIMITED ASSESSMENT YEARS-2010-11 & 2011-12 3 THAT IT WAS ENGAGED IN TRADING ACTIVITIES AND PURCH ASED GOODS THROUGH BROKER NAMELY MIHIR MEHTA. THE ATTENTION WAS DRAWN TO THE FACT THE QUANTITATIVE DETAILS WERE AVAILABLE AND THERE COULD BE NO SALES WITHOUT PURCHASES AND FURTHER THE PAYMENTS WERE THROUGH BA NKING CHANNELS. HOWEVER LD. AO NOTED THAT THE PROPRIETOR OF RAJ TRADERS VIDE AFFIDAVIT- CUM-DECLARATION DATED 18/07/2011 ADMITTED TO BE OPE RATING 96 FIRMS WHO WERE ENGAGED IN ISSUING BOGUS BILLS TO VARIOUS CONCERNS WITHOUT ACTUALLY DEALING IN ANY GOODS. THE LD. AO ALSO RECORDED STAT EMENT ON OATH OF ASSESSEES DIRECTOR AS WELL AS OF BROKER NAMELY MIHIR MEHTA TO INQUIRE ABOUT THE PURCHASES TRANSACTIONS. FINALLY NOT CONV INCED THE IMPUGNED 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 09/10/2 015 WHERE THE LD. CIT(A) AFTER CONSIDERING ASSESSEES SUBMISSIONS AND PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS NOTED THAT THE OPPO RTUNITY TO CROSS EXAMINE THE SUPPLIER WAS NOT GRANTED TO THE ASSESSE E AND THE TURNOVER WAS NOT DISTURBED / DISPUTED BY LD. AO. THE LD. CIT (A) ALSO NOTED THE GROSS PROFIT / NET PROFIT RATE EARNED BY THE ASSESS EE IN SEVERAL YEARS AND CONCLUDED THAT THE ASSESSEE SUPPRESSED PROFIT T O THE EXTENT OF 0.10% OF THE TURNOVER AND THEREFORE RESTRICTED THE SAME TO RS.1 41 187/-. AGGRIEVED THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] DREW OU R ATTENTION TO THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSACTIONS AND THUS FAILED TO DISCHAR GE THE ONUS CASTED ON HIM AND HENCE LD. CIT(A) ERRED IN PROVIDING SUBSTA NTIAL RELIEF TO THE ITA.NO.133 & 134/MUM/2013 MINERVA BIOGENIX PRIVATE LIMITED ASSESSMENT YEARS-2010-11 & 2011-12 4 ASSESSEE. PER CONTRA LD. COUNSEL FOR ASSESSEE [AR] PLACED RELIANCE ON THE STAND OF LD. CIT(A) TO CONTEND THAT THE SAME WA S FAIR AND REASONABLE AND THEREFORE NO FURTHER ADDITIONS WERE WARRANTED. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. WE ARE OF THE CONSIDERED OPINIO N THAT THERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL SINCE THE ASSE SSEE WAS ENGAGED IN TRADING ACTIVITIES. 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 FRO M THE IMPUGNED SUPPLIER AND NOTICES ISSUED U/S 133(6) YIELDED NO R ESULT. IT IS ALSO NOTED THAT ONE OF THE SUPPLIER HIMSELF ADMITTED TO BE OPE RATING 96 FIRMS WHO WERE ENGAGED IN PROVIDING ACCOMMODATION BILLS ONLY WITHOUT DEALING IN ANY GOODS WHICH CAST SERIOUS DOUBT ON ASSESSEES CL AIM. THEREFORE IN SUCH A SITUATION THE ADDITION WHICH COULD BE MADE WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTI ONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES WHICH LD. CIT(A) HAS RIGHTLY DONE. HOWEV ER WE FIND THE ESTIMATION TO BE ON THE LOWER SIDE KEEPING IN VIEW THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND THEREFORE ENHANCE TH E SAME TO 8% OF ALLEGED BOGUS PURCHASES OF RS.1 12 43 820/- WHICH COMES TO RS.8 99 506/-. WE DIRECT SO. RESULTANTLY THE REVEN UES APPEAL STANDS PARTLY ALLOWED. 6. NOW WE TAKE UP REVENUES APPEAL ITA NO. 134/MUM /2016 FOR AY 2011-12. THE ASSESSEE IN THIS YEAR HAS BEEN SADDL ED WITH SIMILAR ITA.NO.133 & 134/MUM/2013 MINERVA BIOGENIX PRIVATE LIMITED ASSESSMENT YEARS-2010-11 & 2011-12 5 ADDITIONS BY LD. AO FOR RS.1 09 79 866/- ON ACCOUNT OF BOGUS PURCHASES WHICH HAS BEEN REDUCED BY LD. CIT(A) TO RS.1 84 048 /-. SINCE THE ISSUE IS IDENTICAL EXCEPT FOR FIGURES AND MINOR VARIATION S TAKING SAME STAND WE ESTIMATE THE ADDITION @8% OF ALLEGED BOGUS PURCHASES FOR RS.1 09 79 966/- WHICH COMES TO RS.8 78 389/-. RESU LTANTLY THE REVENUES APPEAL STANDS PARTLY ALLOWED. 7. FINALLY BOTH THE APPEALS FILED BY REVENUE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST NOVEMBER 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARW AL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 01.11.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- - / DR ITAT MUMBAI 6. . / GUARD FILE / BY ORDER / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI