BILLION WISE GLOBAL PVT LTD, MUMBAI V. ITO, W-15(1)(2), MUMBAI

ITA 1037/MUM/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3176 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 21-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 13

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL “SMC” Bench, Mumbai Shri Shamim Yahya (AM) I.T.A. No. 1037/Mum/2019 (A.Y. 2014-15) Billion Wise Global Pvt. Ltd. Flat No. 303, Millenium Plaza at Plot No. 13 Near Hotel Wanton House Sector-26A, Vashi Navi Mumbai-400 703. PAN : AAECB8013B Vs. ITO, Ward-15(1)(2) Aayakar Bhavan M.K. Road Mumbai-400 020. (Appellant) (Respondent) Assessee by None Department by Ms. Usha Gaikwad Date of Hearing 25.04.2022 Date of Pronouncement 02.05.2022 O R D E R This is an appeal by the assessee wherein the assessee is aggrieved that the learned CIT(A) has sustained the addition for bogus purchase of Rs 34,85,795/- done @ 12.5% by Assessing Officer for the AY 2014-15 vide order dated 30.11.2018. 2. The assessee in this case is engaged into trading business. The assessment was reopened upon information from sales tax department that assessee has made Rs. 2,78,86,358/- purchases from bogus entry operator. The AO made 12.5% addition of the bogus purchase. 3. Up on assessee's appeal learned CIT(A) has noted that the sales has not been doubted. Accordingly placing reliance upon several case laws and upon the facts of the case he sustained 12.5% disallowance out of the bogus purchases. Billion Wise Global Pvt. Ltd. 2 4. Against above order revenue is in appeal before the ITAT. I have heard Id Learned Departmental Representative and perused the record. I find that in this case the sales have not been doubted it is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from Honourable Jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (in writ petition no 2860, order dt 18.6.2014). In this case the Honourable High Court has held that hundred percent allowance for the purchases said to be bogus cannot be done, when sales are not doubted. However the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of nonpayment of tax and others at the expense of the exchequer. In such situation in our considered opinion on the facts and circumstances of the case the 12.5% disallowance out of the bogus purchases done by learned CIT(A) meets the end of justice. Accordingly I uphold the order of learned CIT(A). 5. In the result, appeal filed by the assessee stands dismissed. Order pronounced in the open court on 02.05.2022. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai; Dated : 02/05/2022 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai Billion Wise Global Pvt. Ltd. 3 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai