NITIN NANDKISHOR BANGAD, MUMBAI V. ITO 17 (2)(4), MUMBAI

CO 254/MUM/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1745 (ITAT-MUMBAI)
• Duration Of Justice: 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Keywords: Bogus purchase; Accommodation entries; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM ITA NO. 6250/MUM/2018 ( ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 17(2)(4), MUMBAI. VS. SHRI NITIN NANDKISHOR BANGAD, 59, GAYA BUILDING, 109 Y.M. ROAD, MASJID BUNDER, MUMBAI-400003. PAN/GIR NO.ABAPB 4356 P (APPELLANT ) .. (RESPONDENT ) C.O. NO. 254/MUM/2019 (ARISING OUT OF ITA NO. 6250/MUM/2018) ( ASSESSMENT YEAR: 2009-10) SHRI NITIN NANDKISHOR BANGAD, 59, GAYA BUILDING, 109 Y.M. ROAD, MASJID BUNDER, MUMBAI-400003. VS. INCOME TAX OFFICER 17(2)(4), MUMBAI. PAN/GIR NO. ABAPB 4356 P (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI KUMAR PADMAPANI BORA (DR) ASSESSEE BY SHRI VIMAL PUNMIYA (AR) DATE OF HEARING 02/12/2019 DATE OF PRONOUNCEMENT 09/12/2019 / O R D E R PER: R.C. SHARMA, A.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-58, MUMBAI DATED 10/08/2018 FOR THE A.Y. 2009-10 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN S HORT, THE ACT). ITA NO. 6250/MUM/2018 & CO 254/MUM/2019 ITO VS NITIN NANDKISHOR BANGAD 2 2. THE GRIEVANCE OF THE ASSESSEE AND THE REVENUE RE LATE TO THE ADDITION MADE BY THE A.O. AND PARTLY DELETED BY THE LD. CIT(A) IN RESPECT OF ALLEGED BOGUS PURCHASES. THE A.O. HAS COMPUTED P ROFIT AT 15.10% ON THE ALLEGED BOGUS PURCHASES AND BY THE IMPUGNED ORD ER, THE LD. CIT(A) CONFIRMED THE ADDITION BY ESTIMATING INCOME @ 5.25% OF ALLEGED BOGUS PURCHASES. THE PRECISE FINDING OF THE LD. CIT(A) IS AT PAGE NO. 2 TO 7 OF HIS APPELLATE ORDER. 3. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE TAX EFFECT OF THE REVENUE APPEAL IS LESS THAN RS. 50.00 LACS, THE REFORE, IN TERMS OF CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. 4. WITH REGARD TO MERIT OF THE ADDITION SUSTAINED B Y THE LD. CIT(A) TO THE EXTENT OF 5.25% ON ALLEGED BOGUS PURCHASES, IT WAS CONTENTION OF THE LD AR THAT THE ASSESSEE HAS ALL THE BILLS OF PU RCHASES, ALL PAYMENTS MADE THROUGH ACCOUNT PAYEE CHEQUE, SUPPLIER PROVIDE D ALL IDENTITY TO BANK FOLLOWING KYC NORMS AND ALL SALES OF ASSESSEE WERE ACCEPTED. HE ALSO CONTENDED THAT THE ASSESSEE EARNED GP RATIO AS DETAILED HEREUNDER FOR LAST THREE YEARS: ASSESSMENT YEAR %GP 2006-07 11.99 2007-08 16.57 2008-09 16.76 2009-10 14.23 ITA NO. 6250/MUM/2018 & CO 254/MUM/2019 ITO VS NITIN NANDKISHOR BANGAD 3 5. THE LD AR HAS FURTHER ARGUED THAT THE ASSESSEES BOOKS OF ACCOUNT WERE NOT REJECTED U/S 145(3) OF THE ACT BY THE LD. CIT(A). IN THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 200 8-09, THE ASSESSEE EARNED GP RATIO OF 16.76% ON TOTAL TURNOVER, WHILE FOR THE YEAR UNDER CONSIDERATION GP RATIO EARNED WAS 14.23%. END OF JU STICE WILL BE MET IN THIS CASE IF GP RATIO OF 5.25% ON ALLEGED BOGUS PUR CHASES IS ADDED TO INCOME OF THE ASSESSEE AGAINST WHICH CREDIT FOR THE DECLARED GP RATIO SHOULD BE GRANTED. 6. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDER OF THE A.O. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA DING IN HARDWARE, ELECTRIC GOODS AND TOOL KIT. THE ASSESSEES CASE WA S REOPENED ON THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT REGARDING ASSESSEE OBTAINED ACCOMMODATION ENTRIES. AFTER MAKING ENQUIR Y, THE A.O. MADE ADDITION BY ESTIMATING INCOME AT 15.10% ON ALLEGED BOGUS PURCHASES. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS DEALT WIT H THE ISSUE THREADBARE AND AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE UPHOLD ADDITION TO THE EXTENT OF 5.25% OF THE ALLEGED BOGUS PURCHASES. NEITHER THE LD. AR NOR THE LD DR COULD P ERSUADE US TO DEVIATE FROM THE FINDING AND CONCLUSION OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD ITA NO. 6250/MUM/2018 & CO 254/MUM/2019 ITO VS NITIN NANDKISHOR BANGAD 4 THE ORDER OF THE LD. CIT(A) FOR CONFIRMING THE ADDI TION TO THE EXTENT OF 5.25% ON ALLEGED BOGUS PURCHASES. 8. IN THE RESULT, BOTH I.E. APPEAL OF THE REVENUE A ND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH DECEMBER, 2019. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 09/12/2019 *RANJAN 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//