ITO, 19(2)(2), MUMBAI v. SHRI KETAN MAHESHBHAI VASANI, MUMBAI

ITA 5234/MUM/2019 | 2009-2010
Pronouncement Date: 16-03-2021 | Result: Dismissed

Appeal Details

RSA Number 523419914 RSA 2019
Assessee PAN AACPV0702A
Bench Mumbai
Appeal Number ITA 5234/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 7 day(s)
Appellant ITO, 19(2)(2), MUMBAI
Respondent SHRI KETAN MAHESHBHAI VASANI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 16-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 16-03-2021
Last Hearing Date 08-03-2021
First Hearing Date 08-03-2021
Assessment Year 2009-2010
Appeal Filed On 08-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI ! '# '$ BEFORE VIKAS AWASTHY JUDICIAL MEMBER & SHRI N.K.PRADHAN ACCOUNTANT MEMBER . 5234/ / 2019 (. . 2009-10 ) ITA NO.5234/MUM/2019(A.Y.2009-10) INCOME TAX OFFICER-19(2)(2) 2 ND FLOOR MATRU MANDIR TARDEO ROAD MUMBAI 400 007 ...... ) / APPELLANT VS. SHRI KETAN MAHESHBHAI VASANI 4/17 KALYAN BUILDING KHANDIKAR MARG MUMBAI 400 004. PAN:AACPV0702A ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS.SMITA VERMA +* / DATE OF HEARING : 08/03/2021 -. +* / DATE OF PRONOUNCEMENT : 16 /03/2021 '/ ORDER PER VIKAS AWASTHY J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 4 MUMBAI (IN SHORT THE CIT( A)) DATED 15/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE IN APPEAL HAS ASSAILED THE FINDINGS OF CIT(A) IN HOLDING REOPENING OF ASSESSMENT AS BAD IN LAW. 2 . 5234/ / 2019 (. . 2009-10 ) ITA NO.5234/MUM/2019(A.Y.2009-10) 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM TH E RECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT/EXPORT AND RESALE OF PAPER BOARD AND ALLIED PRODUCTS. ON THE BASIS OF INFORMATION RECEIVED BY DGIT(INVN) FROM THE SALES TAX DEPARTMENT GOVERNMENT OF MAHARASHTRA THE ASSESSME NT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED. AS PER THE INFORMATION RECEIVED THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGAT ING TO RS.1 30 36 171/- FROM M/S. WOODLAND MERCANTILE CO. PVT. LTD. THE ASSESSE E ASKED FOR THE REASON FOR REOPENING. AS PER THE REASONS PROVIDED TO THE ASSE SSEE THE REOPENING WAS INITIATED AS THE ASSESSEE HAD MADE PURCHASES FROM ONE STAR WOOD MERCANTILE CO. PVT. LTD. THE CONTENTION OF THE ASSESSEE IS THAT IN THE REASO NS RECORDED FOR REOPENING THE NAME OF ALLEGED BOGUS SUPPLIERS IS DIFFERENT FROM T HE ONE MENTIONED IN ASSESSMENT ORDER FOR MAKING THE ADDITION. THEREFORE THE REOP ENING IS BAD IN LAW. THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT O F BOGUS PURCHASES FROM M/S. WOODLAND MERCANTILE CO. PVT. LTD. BY ESTIMATIN G G.P @12.5%. AGGRIEVED BY THE ASSESSMENT ORDER DATED 20/03/2015 PASSED UNDER SECT ION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT) THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A) INTER-ALIA CHALLENGING THE VALIDITY OF REO PENING PROCEEDINGS. THE CIT(A) RELYING ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF AKSHAR BUILDERS AND DEVELOPERS VS. ACIT 411 ITR 602 CONCLUDED THAT R EOPENING IS BAD IN LAW AS THE NAME OF SUPPLIER MENTIONED IN THE REASONS FOR REOPE NING AND IN THE ASSESSMENT ORDER DO NOT COINCIDE. AGAINST THE FINDINGS OF CIT (A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. MS.SMITA VERMA REPRESENTING THE DEPARTMENT SUB MITTED THAT THE REASONS FOR REOPENING CLEARLY INDICATE THAT IT IS ON ACCOU NT OF ASSESSEES INVOLVEMENT IN BOGUS PURCHASES THE ASSESSMENT IS BEING REOPENED AN D IN THE REASSESSMENT PROCEEDINGS THE ADDITION HAS BEEN MADE FOR SAME REA SONS. IN SO FAR AS THE NAME OF THE SUPPLIER IS CONCERNED BOTH PARTIES I.E. M/S. WOODLAND MERCANTILE CO. PVT. LTD. 3 . 5234/ / 2019 (. . 2009-10 ) ITA NO.5234/MUM/2019(A.Y.2009-10) AND M/S.STARWOOD MERCANTILE CO. PVT. LTD. THEIR N AMES APPEAR IN THE LIST OF SUSPICIOUS DEALERS DECLARED BY THE SALES TAX DEPAR TMENT GOVERNMENT OF MAHARASHTRA. THE WRONG MENTIONING OF THE NAME DOE S NOT CAUSE PREJUDICE TO THE ASSESSEE AS THE ADDITION HAS BEEN MADE IN REASSESSM ENT PROCEEDINGS IN LINE WITH THE REASONS RECORDED FOR REOPENING. THE CASE LAW ON WH ICH CIT(A) HAS PLACED RELIANCE IS DISTINGUISHABLE ON FACTS. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPAR TMENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. THE REVENUE IN APPEAL HAS ASSAILED THE FINDINGS OF CIT(A) IN HOLDING REOPENIN G OF ASSESSMENT AS BAD IN LAW. A PERUSAL OF DOCUMENTS ON RECORD REVEAL THAT WHILE RE CORDING REASONS FOR REOPENING THE ASSESSING OFFICER HAS RECORDED THAT THE ASSES SEE HAD MADE BOGUS PURCHASES FROM M/S.STARWOOD MERCANTILE CO. PVT. LTD. WHER EAS WHILE PASSING ASSESSMENT UNDER 143(3) R.W.S. 147 OF THE ACT THE ASSESSING O FFICER HAS MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES BY ASSESSEE FROM M/S. WOODLAND MERCANTILE CO. PVT. LTD. . THE REASON FOR MAKING ADDITION MAY COINC IDE WITH REASONS FOR REOPENING BUT THE PARTY QUA WHICH SATISFACTION WAS RECORDED FOR REOPENING THE ASSESSMENTS IS DISTINCT AND DIFFERENT. M/S.STARWOOD MERCANTILE CO . PVT. LTD. AND M/S. WOODLAND MERCANTILE CO. PVT. LTD. ARE TWO DISTINCT SEPAR ATE ENTITIES HAVING SEPARATE PAN. ERRONEOUS RECORDING OF NAME OF THE ENTITY IN THE RE ASONS FOR REOPENING VITIATES THE ENTIRE REASSESSMENT PROCEEDINGS. THE REASONS FOR R EOPENING ARE RECORDED BY THE ASSESSING OFFICER AFTER HAVING SATISFACTION THAT TH E ASSESSEE HAS ENTERED INTO A TRANSACTION WITH A PARTICULAR/DEFINITE ENTITY. T HE ASSESSING OFFICER CANNOT RECORD A SATISFACTION ON THE BASIS OF A ROVING ENQUIRY N AMING ENTITY A IN THE REASONS FOR REOPENING AND MAKING ADDITION IN THE REASSESSMENT PROCEEDINGS ON THE BASIS OF TRANSACTIONS WITH ENTITY B. THE REASONS FOR REOP ENING ARE SOUL OF REASSESSMENT PROCEEDINGS. IF ANY ERROR IS COMMITTED IN RECORDIN G OF SUCH REASONS IT LEADS TO AN INESCAPABLE CONCLUSION THAT ASSESSING OFFICERS SA TISFACTION WAS FLAWED. 4 . 5234/ / 2019 (. . 2009-10 ) ITA NO.5234/MUM/2019(A.Y.2009-10) RECORDING OF REASONS FOR REOPENING BASED ON IMPAIRE D SATISFACTION WOULD FAIL THE TEST AND JUDICIAL SCRUTINY. THUS IN VIEW OF THE FACT T HAT THE NAME OF THE ENTITY IN REASONS FOR REOPENING AND IN REASSESSMENT PROCEEDINGS DO NO T COINCIDE WE HOLD THAT THE REASSESSMENT PROCEEDINGS ARE BAD IN LAW AND ARE L IABLE TO BE QUASHED. WE CONCUR WITH THE ORDER PASSED BY CIT(A) AND UPHOLD THE SAME . 5. IN THE RESULT APPEAL BY THE REVENUE IS DISMISSE D BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY THE 16 TH DAY OF MARCH 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI 0/ DATED 16/03/2021 VM SR. PS (O/S) !*12'.* COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT 2. !* / THE RESPONDENT. 3. 3* ( )/ THE CIT(A)- 4. 3* CIT 5. 45!* . . . / DR ITAT MUMBAI 6. 56789 / GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI