DCIT CIRCLE-3, Thane V. P S AUTO PRIVATE LIMITED, Thane

ITA 1008/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6110 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Assessee Lawyers: SANJIV BRAHME ARS
• Keywords: Bogus purchase
• Section: 69C; 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. 1008/MUM/2019 ( ASSESSMENT YEAR: 2010-11) D.C.I.T., CIRCLE-3,THANE, ROOM NO. 02, 6 TH FLOOR, AASHAR IT PARK, B-WING, WAGLE INDUSTRIAL ESTATE, ROAD NO. 16Z, THANE (W)-400604. VS. M/S P S AUTO PRIVATE LIMITED, A/57, MINIATURE BULB INDUSTRIES LIMITED, OPP PCP CHEMICALS, WAGLE INDUSTRIAL ESTATE, THANE(W)-400605.. PAN/GIR NO.AABCP 6521 B (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI AMIT PRATAP SINGH (DR) ASSESSEE BY SHRI JAYANT BHATT & SHRI SANJIV BRAHME (ARS) DATE OF HEARING 10/02/2020 DATE OF PRONOUNCEMENT 10/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS IS THE APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LD. CIT(A)-2, THANE DATED 12/12/2018 FOR THE A.Y. 2 010-11 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO UPH OLDING ADDITION TO THE EXTENT OF 12.5% IN RESPECT OF BOGUS PURCHASE S WHICH WAS MADE BY THE A.O. AT 100%. ITA NO. 1008/MUM/2019 DCIT VS M/S PS AUTO PVT. LTD. 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN MANUFACTU RING AND TRADING OF AUTOMOBILE PRODUCTS. THE A.O. GOT INFORMATION FROM THE SALES TAX DEPARTMENT REGARDING THE ASSESSEE TAKING ACCOMMODAT ION BILL WITH REGARD TO PURCHASES WITHOUT TAKING ACTUAL DELIVERY OF GOODS, ACCORDINGLY, THE A.O. REOPENED THE ASSESSMENT AND T HEREAFTER ENTIRE ALLEGED BOGUS PURCHASES TO THE TUNE OF RS. 12,43,20 8/- WAS ADDED IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS RESTR ICTED THE ADDITION TO THE EXTENT OF 12.5% AFTER OBSERVING AS UNDER: 9. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION OF THE APPELLANT. THE HON'BLE ITAT, MUMBAI, IN APPELLANT'S OWN CASE FOR AY 2009-10, IN ITA NO. 1244/MUM/2018 HAD RESTRICTED TH E DISALLOWANCE TO THE EXTENT OF 12.5% OF BOGUS PURCHASES, INTER-AL IA STATING THAT:- .. IF THE RATIO LAID DOWN BY HON'BLE JURISDICTION AL HIGH COURT IN THE AFORESAID CASE OF MIS NIKUNJ EXIMP ENTERPRISES PVT. LTD ((SUPRA)) IS ANALYZED WITH THE FACTS OF THE PRESENT APPEAL, IT IS NOTED THAT THE LD ASSESSING OFFICER RECEIVED FROM T HE SALES TAX DEPARTMENT WITH RESPECT TO BOGUS PURCHASES MADE FRO M VARIOUS PARTIES THROUGH BOGUS BILLS, THE ASSESSEE IS ONE OF THE BENEFICIARY OF SUCH PURCHASES. THE ASSESSEE SHOWED GROSS PROFIT AND NET PROFIT OF RS. 1,02,30,977/- AND RS. 15,30,192/-, RE SPECTIVELY, ON THE GROSS PURCHASES OF RS, 2.55 CRORES. THE ASSE SSEE IN SPITE OF ASKING BY THE ID. ASSESSING OFFICER DID NO T PRODUCE THE NECESSARY DETAILS AND THUS THE ID. ASSESSING OF FICER MADE ADDITION UNDER SECTION 69C OF THE ACT OF THE TOTAL PURCHASES. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (A PPEAL), CONFIRMED THE ADDITION. IF THE TOTALITY OF FACTS AN D THE ITA NO. 1008/MUM/2019 DCIT VS M/S PS AUTO PVT. LTD. 3 MATERIAL AVAILABLE ON RECORD, IN SUCH TYPE OF CASES , THERE IS NO OPTION BUT TO ADOPT THE GROSS PROFIT EMBEDDED TH EREIN, WHICH CAN BE ADDED. THE ASSESSEE HAS ALREADY DECLAR ED GP @ 40% AND NP @ 7.53%, THUS, TO PLUG THE LEAKAGE OF REVENUE, I DIRECT THE LD. ASSESSING OFFICER TO MAKE THE ADDITI ON @ 12.5% OF SUCH BOGUS PURCHASES.' 9.1 CONSIDERING THE FACTS OF CASE AND IN VIEW OF T HE DECISION OF HON'BLE ITAT, SMC BENCH, MUMBAI, FOLLOWING THE SAME PARITY OF REASONING, THE DISALLOWANCE TO THE EXTENT OF 12. 5% OF BOGUS PURCHASES, I.E. RS. 1,55,401/- (12.5% OF RS. 12,43, 208/-), IS HEREBY SUSTAINED AND BALANCE DISALLOWANCE OF RS. 10 ,87,807/- (RS. 12,43,208 RS. 1,55,401) IS DELETED. THE GROUN D OF APPEAL, RAISED AS ABOVE, IS PARTLY ALLOWED. 5. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), THE R EVENUE IS IN APPEAL BEFORE THE ITAT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT IN ASSESSEES OWN CASE FOR THE IMMEDIATE PRECE DING YEAR I.E. A.Y. 2009-10 IN IRA NO. 1244/MUM/2018, THE TRIBUNAL UNDE R THE SIMILAR FACTS AND CIRCUMSTANCES HAS RESTRICTED THE ADDITION TO THE EXTENT OF 12.5%. WHILE DECIDING THE ISSUE, THE LD. CIT(A) HAS FOLLOWED THE ORDER OF THE TRIBUNAL AND REDUCED THE ADDITION TO THE EXT ENT OF 12.5% AGAINST THE 100% MADE BY THE A.O. AS FACTS AND CIRC UMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME AND NOTHING W AS POINTED OUT BY THE LD DR SO AS TO PERSUADE US TO DEVIATE FROM T HE DECISION OF THE TRIBUNAL FOR THE A.Y. 2009-10, WE DO NOT FIND ANY R EASON TO INTERFERE ITA NO. 1008/MUM/2019 DCIT VS M/S PS AUTO PVT. LTD. 4 IN THE ORDER OF THE LD. CIT(A) FOR RESTRICTING ADDI TION TO THE EXTENT OF 12.5%. HENCE, WE UPHOLD THE SAME. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2020. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 10/02/2020 *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//