Shri Dhondiram Narayan Limbhore, Raigad V. Deputy Commissioner of Income-tax, Panvel Circle, Panvel

CO 43/PUN/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4164 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBODH RATNAPARKHI
• Assessee Lawyers: MRS SHWETA MISHRA
• Keywords: Bogus purchase; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS. 1956 & 1957/PUN/2016 $ $ / ASSESSMENT YEARS : 2010-11 & 2011-12 DY. COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, NEW PANVEL ....... / APPELLANT / V/S. SHRI DHONDIRAM NARAYAN LIMBHORE, PROP. M/S. TRIMURTI CONTRACTORS, TRIMUTRI COMPLEX, DHATAV, TALUKA URAN, DIST. RAIGAD 402 116 PAN : AAFPL0276L / RESPONDENT C.O. NOS. 43 & 44/PUN/2018 (ARISING OUT OF ITA NOS. 1956 & 1957/PUN/2016 $ $ / ASSESSMENT YEARS : 2010-11 & 2011-12 SHRI DHONDIRAM NARAYAN LIMBHORE, PROP. M/S. TRIMURTI CONTRACTORS, TRIMUTRI COMPLEX, DHATAV, TALUKA URAN, DIST. RAIGAD 402 116 PAN : AAFPL0276L .......CROSS OBJECTOR / V/S. DY. COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, NEW PANVEL APPELLANT IN THE APPEAL APPELLANT BY : MRS. SHWETA MISHRA RESPONDENT BY : SHRI SUBODH RATNAPARKHI / DATE OF HEARING : 30.07.2018 / DATE OF PRONOUNCEMENT : 03.08.2018 / ORDER 2 ITA NOS.1956 & 1957/PUN/2016 & CO NOS. 43 AND 44/PUN/2018 SHRI DHONDIRAM NARAYAN LIMBHORE PER D. KARUNAKARA RAO, AM THERE ARE TOTAL FOUR APPEALS UNDER CONSIDERATION FILED BY T HE ASSESSEE AND THE REVENUE INVOLVING A.YRS. 2010-10 AND 2011-12. IT A NOS. 1956 & 1957/PUN/2016 ARE FILED BY THE REVENUE AND CO NOS. 43 & 44/PUN/2018 ARE FILED BY THE ASSESSEE. THEY ARE FILED AGAINST THE CON SOLIDATED ORDER OF CIT(A)-2, THANE. THEREFORE, THESE APPEALS/CROSS OBJECTION S ARE CLUBBED TOGETHER AND BEING ADJUDICATED IN THIS COMPOSITE ORDER. 2. WE SHALL FIRST TAKE UP THE APPEALS OF THE REVENUE. RE VENUE RAISED SIMILAR GROUNDS IN BOTH THE ASSESSMENT YEARS AND THEREFO RE, THE GROUNDS OF APPEAL IN ITA NO.1956/PUN/2016 FOR A.Y. 2010-11 ARE EXTRACTED HERE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN RELYING ON THE DECISION OF SUPREME COURT I N THE CASE OF KANCHWALA GEMS VS. JCIT 288 ITR 10 (SC) AND HONBLE HIGH COUR TS DECISION IN THE CASE OF VIJAY PROTEIN, SANJAY OIL CAKE INDUSTRIES, ETC. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE HONBLE CIT(A) ERRED IN NOT FOLLOWING THE ORDER OF ITAT, PUNE IN ITA NO.1411- 1415 DATED 20-02-2015 IN THE CASE OF M/S. KOLTE PAT IL DEVELOPERS LTD., WHEREIN 100% ADDITION OF BOGUS PURCHASES WERE CONFI RMED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN GIVING RELIEF TO THE ASSESSEE TO THE EXTEN T OF SUPPRESSED G.P. OUT OF TOTAL BOGUS PURCHASES EVEN THOUGH (I) THE ASSESSEE COULD NOT PRODUCE PRIMARY EVIDENCES LI KE OCTROL RECEIPTS, DELIVERY CHALLAN ETC. EVIDENCE TO PROVE T HE GENUINENESS OF THE PURCHASES BEFORE THE AO AND BEFORE CIT(A). (II) THE AFFIDAVITS FILED BY THE ENTRY PROVIDERS BEFORE SALES TAX AUTHORITIES CANNOT BE IGNORED HAVING EVIDENTIARY VA LUE. 4. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY GROUND OF APPEAL. 3 ITA NOS.1956 & 1957/PUN/2016 & CO NOS. 43 AND 44/PUN/2018 SHRI DHONDIRAM NARAYAN LIMBHORE 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUDE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF ENGINEERING AND LABOUR CONTRACTOR. ASSESSEE FILED THE RETURN OF INCOME ON 07-10 -2010 DECLARING TOTAL INCOME OF RS.47,72,670/- THIS IS A CASE WHERE ASSESS EE MADE CERTAIN PURCHASES AND THE SUPPLIERS FROM WHOM THE PURCHASES AR E MADE ARE IN THE SUSPECTED LIST OF THE SALES TAX DEPARTMENT OF MAHARASHTR A GOVT. AO ALLEGED THAT THE PURCHASES MADE FROM 4 SUPPLIERS (PARA NO.4.3 OF T HE ASSESSMENT ORDER) AMOUNTING TO RS.38,36,129/- ARE BOGUS ONES. EVENT UALLY, THE AO DISALLOWED THE SAID SUM OF RS.38,36,129/-. SIMILARLY, THE AO MA DE ADDITION OF RS.48,91,615/- FOR THE A.Y. 2011-12. CIT(A) RESTRICTED THE DISALLOWANCE TO RS.9,59,032/- AND RS.12,22,905/- FOR THE A.YRS. 2010-11 AND 2011-12 RESPECTIVELY. 4. BEFORE US, AT THE OUTSET, LD. AR FOR THE ASSESSEE BROU GHT OUR ATTENTION TO THE COMPUTATION SHEET PREPARED BY HIM SHOWING THAT THE TAX EFFECT IN BOTH THE APPEALS FILED BY THE REVENUE IS BELOW RS.20 LAKHS. THE SAID CHART IS REPRODUCED HERE BELOW : PARTICULARS A.Y. 2010-11 2011-12 TOTAL DISPUTED PURCHASES RS.38,36,129/- RS.48,91,615/- ADDITION CONFIRMED BY HON.CIT(A) RS.9,59,032/- RS.12,22,905/- RELIEF GRANTED BY HON.CIT(A) RS.28,77,097/- RS.36,68,710/- % OF DISPUTED PURCHASES CONFIRMED BY HON.CIT(A) 25% 25% HE SUBMITTED THAT THE APPEALS FILED BY THE DEPARTMENT A RE LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. THE LD. AR POINTED T HAT AS PER CBDT CIRCULAR NO.3/2018 DATED 11 TH JULY, 2018, THE MONETARY LIMIT FOR FILING OF 4 ITA NOS.1956 & 1957/PUN/2016 & CO NOS. 43 AND 44/PUN/2018 SHRI DHONDIRAM NARAYAN LIMBHORE APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL IS RS.20 L AKHS, THEREFORE, THE APPEALS FILED BY THE DEPARTMENT ARE NOT MAINTAINABLE. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE DEFENDE D THE ASSESSMENT ORDERS AND PRAYED FOR REVERSING THE FINDINGS OF THE CIT(A) IN THE APPEALS. HOWEVER, THE LD. DR FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESENT APPEALS FILED BY THE DEPARTMENT IS LESS THAN RS.20 LAKHS. 6. BOTH SIDES HEARD. ON PERUSAL OF THE FACTS IN BOTH THE APPEALS FILED BY THE DEPARTMENT AND THE CHART (SUPRA) DEPICTING THE TAX EFFECT, WE FIND UNDISPUTEDLY THE TOTAL TAX EFFECT INVOLVED IN THE PRESENT APPEALS IS BELOW RS.20 LAKHS. THE CBDT CIRCULAR NO.3/2018 DATED 11 TH JULY, 2018 RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF APPEAL BY THE DEPART MENT BEFORE THE TRIBUNAL TO RS.20 LAKHS. THE CIRCULAR APPLIES TO THE PENDIN G APPEALS OF THE DEPARTMENT BEFORE THE TRIBUNAL TOO. THUS, IN VIEW OF THE C BDT CIRCULAR, WE ARE OF THE OPINION THAT THE PRESENT APPEALS OF THE REVE NUE ARE LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT WITHOUT GOING INTO TH E MERITS OF THE CASE. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. WE SHALL NOW TAKE UP THE CROSS OBJECTIONS FILED BY THE ASSESSEE. CO NOS. 43 AND 44/PUN/2018 A.YRS. 2010-11 AND 2011-12 8. SINCE BOTH THE APPEALS OF THE REVENUE ARE DISMISSED AS NOT- MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT, THE CROSS OBJECT IONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. AS SUCH, THE CROSS O BJECTIONS OF THE 5 ITA NOS.1956 & 1957/PUN/2016 & CO NOS. 43 AND 44/PUN/2018 SHRI DHONDIRAM NARAYAN LIMBHORE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED A S ACADEMIC OR INFRUCTUOUS. 9. IN THE RESULT, BOTH THE CROSS OBJECTIONS OF THE ASSESSEE ARE DIS MISSED. 10. TO SUM UP, THE APPEALS OF THE REVENUE AND CROSS OB JECTIONS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED. ORDER PRONOUNCED ON 03 RD DAY OF AUGUST, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 03 RD AUGUST, 2018. SATISH ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, THANE 4. THE PR.CIT-2, THANE 5. , , ' , / DR, ITAT, B BENCH, PUNE. 6. % / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.