RANJANBEN K. DODIA, MUMBAI V. ITO 24(3)(5), MUMBAI

CO 168/MUM/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2643 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 06-10-2016
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: S D CHHEDA
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3902 / MUM/20 1 6 ( ASSESSMENT YEAR : 2011 - 12 ) ITO 24(3)(5), MUMBAI VS. SMT. RANJANBEN K DODIA, DODIA COMPOUND, PARSI PANCHAYAT CROSS ROAD, R.K.SINGH MARG, AMBAV ADI ANDHERI (E) PAN/GIR NO. ACXPD3141N APPELLANT ) .. RESPONDENT ) CO NO. 168/ MUM/20 16 ( ASSESSMENT YEAR : 2011 - 12 ) SMT. RANJANBEN K DODIA, DODIA COMPOUND, PARSI PANCHAYAT CROSS ROAD, R.K.SINGH MARG, AMBAVADI ANDHERI (E) VS. ITO 24(3 )(5), MUMBAI PAN/GIR NO. ACXPD3141N APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI S.R.KIRTANE ASSESSEE BY SHRI S.D.CHHEDA DATE OF HEARING 20 / 12 /2016 DATE OF PRONOUNCEME NT 23 / 12 /2016 / O R D E R PER R.C.SHARM A (A.M) : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2011 - 12. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. FACTS IN BRIEF ARE THAT DURING THE COURSE OF SCRUTINY ASSESSME NT, AO OBSERVED THAT ASSESSEE HAS MADE THE PURCHASE OF RS.37,11,186/ - FROM ITA NO. 3902/MUM/2016 & CO 168/MUM/2016 SMR. RANJANBEN K DADIA 2 BOGUS SUPPLIERS. AO ASKED THE ASSESSEE TO PRODUCE THESE PARTIES WITH ALL PURCHASE BILLS, SALES BILLS, PURCHASE REGISTER, SALES REGISTER, STOCK REGISTER ETC., THE ASSESSEE FILED THE DETAILS AS ASKED BY THE AO. THE AO OBSERVED THAT U/S.133(6) WERE ISSUED TO THE BOGUS PURCHASE PARTIES FOR VERIFICATION, BUT THE SAME WAS RETURNED UNSERVED. BY OBSERVING THAT ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE P URCHASE FROM THE ABOVE MENTIONED PARTIES HAVE ACT UALLY BEEN MADE BY THE ASSESSEE, T HE AO ADDED ENTIRE AMOUNT IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER CIT(A) UPHELD THE ADDITION OF 12.5% OF SUCH BOGUS PURCHASES BY CONSIDERING ADDITIONAL G.P. EMBEDDED IN SUCH PURCHASES. 5. AGAINST THE ABOVE ORDER OF CIT(A) BOTH ASSESSEE AND REVENUE ARE IN FURTHER APPEAL BEFORE US. 6. IT WAS CONTENDED BY LEARNED AR THAT ASSESSEE HAS BEEN ABLE TO RECONCILE THE DETAIL S OF PURCHASES AND SALES, THEREFORE, NO ADDITIONS TO BE MADE ON ACCOUNT OF PURCHASES. OUR ATTENTION WAS ALSO INVITED TO THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS WELL AS IN THE EARLIER YEARS SO AS TO CONTEND THAT HIGHER GP RATE WAS DISCLOSED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, WARRANTING NO EXTRA ADDITION BY ASSUMING EXTRA PROFIT ON SUCH PURCHASES. ITA NO. 3902/MUM/2016 & CO 168/MUM/2016 SMR. RANJANBEN K DADIA 3 7. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. FROM THE RECORD I FOUND THAT ASSESSEE HAS FILED THE F OLLOWING DETAILS IN CONNECTION WITH ABOVE PARTIES TO ESTABLISH GENUINENESS OF ABOVE PURCHASES. 1. COPY OF THE PURCHASE INVOICE CUM DELIVERY CHALLANS 2. BANK STATEMENTS SHOWING THAT ALL PARTIES HAVE BEEN EFFECTED PAYMENTS WITH A/ C PAYEE CHEQUES WHICH ARE DULY REFLECTED IN BANK STATEMENT. 3. THE LEDGER COPY IN OUR BOOKS DULY CERTIFIED A) GP RATIO FOR LAST 3 YEARS. 2008 - 2009 G.P. 3.30% 2009 - 2010 - G.P. 2.59% 2010 - 2011 G.P. 315% 4. I ALSO FOUND THAT THE ASSESSES IS MANUFACTURER OF LIFT PARTS MAD E OF MILD STEEL AND SALES TO OTIS ELEVATOR INDIA LTD. AFTER MANUFACTURING OF ABOVE ITEM. THE SAME HAVE BEEN EVIDENCE BY SALES BILLS. THE SALES COULD NOT HAVE BEEN AFFECTED WITHOUT PURCHASES OF RAW MATERIAL. 5. IT IS CLEAR FROM THE GP CHART THAT GP SHOWN B Y THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS BETTER THAN GP OF IMMEDIATE PRECEDING YEAR. KEEPING IN VIEW THE TOTALITY IN FACTS AND CIRCUMSTANCES OF TH E CASE, VIS - - VIS ADVERSE OBSERVATION OF LOWER AUTHORITIES, I DIRECT THE AO TO UPHO LD THE ADDITIO N OF 5% OF SUCH BOGUS PURCHASES TO FULFIL SHORTAGE OF REVENUE IF ANY. I DIRECT ACCORDINGLY. ITA NO. 3902/MUM/2016 & CO 168/MUM/2016 SMR. RANJANBEN K DADIA 4 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED WHEREAS APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 12 /2016 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 23 /12 /201 6 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5 . DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//