ITO WD 1(1), KALYAN V. ALPESH SURESH JAIN, BHIWANDI

ITA 1063/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0348 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATYANARAYANA RAJU
• Keywords: Bogus purchase; Non passing of speaking order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.1063/MUM/2017 ASSESSMENT YEAR : 2011-12 ITO WARD 1(1) KALYAN VS. ALPESH SURESH JAIN 431, CHAFA APARTMENTS KASAR ALI AJAY NAGAR, BHIWANDI 421 302 PAN AENPJ8257P (APPELLANT) RESPONDENT) APPELLANT BY : SHRI SATYANARAYANA RAJU RESPONDENT BY : NONE DATE OF HEARING : 16 .0 5 .201 7 DATE OF PRONOUNCEMENT : 07 .0 6 . 201 7 O R D E R THIS IS AN APPEAL BY THE REVENUE, WHEREIN THE REVEN UE IS AGGRIEVED THAT THE LEARNED CIT-A HAS NOT SUSTAINED HUNDRED PE RCENT DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES. 2. THE ASSESSING OFFICER IN THIS CASE HAS MADE HUND RED PERCENT ADDITION ON ACCOUNT OF BOGUS PURCHASE AMOUNTING TO ` . 37,30,424/-. UPON ASSESSEE'S APPEAL, LEARNED CIT(A) HAS NOTED THAT THE SALES HAV E NOT BEEN DOUBTED. ACCORDINGLY, PLACING RELIANCE UPON SEVERAL CASE LAW S AND UPON THE FACTS OF THE CASE HE SUSTAINED 15% DISALLOWANCE OUT OF THE BOGUS PURCHASES. ITA NO.1063/MUM/2017 SHRI ALPESH SURESH JAIN 2 3. AGAINST ABOVE ORDER, ASSESSEE IS IN APPEAL BEFOR E THE ITAT. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND P ERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOT ICE. 4. I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED, HUNDRED PERCENT DI SALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THIS PROPOSITION IS SUPPOR TED FROM HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF N IKUNJ EXIMP ENTERPRISES. HOWEVER, THE FACTS OF THE PRESENT CASE INDICATE THA T ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MAKING PURCHASES THR OUGH THE GREY MARKET GIVES THE ASSESSEE SAILINGS ON ACCOUNT OF NON-PAYME NT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SUCH SITUATION IN MY CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 15% DIS ALLOWANCE OUT OF THE BOGUS PURCHASES SUSTAINED BY THE LEARNED CIT(A )MEE TS THE ENDS OF JUSTICE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE HAS PLACED RELI ANCE UPON A HONBLE GUJARAT HIGH COURT DECISION WHEREIN, HUNDRE D PERCENT DISALLOWANCE OF BOGUS PURCHASE HAS BEEN UPHELD. SPECIAL LEAVE PE TITION AGAINST THIS ORDER HAS BEEN DISMISSED BY THE HONBLE APEX COURT. I FIN D THAT DISMISSAL OF SLP BY A NON SPEAKING ORDER BY THE HONBLE APEX COURT DOES N'T MERGE THE ORDER OF THE HONBLE HIGH COURT WITH THAT OF THE APEX COURT. MOREOVER SUCH DISALLOWANCES DEPEND UPON THE FACTS AND CIRCUMSTANC ES OF THE CASE AS EXPOUNDED BY HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF NIKUNJ EXIMP ENTERPRISES. ACCORDINGLY, I UPHOLD THE ORDER OF THE LEARNED CIT(A). ITA NO.1063/MUM/2017 SHRI ALPESH SURESH JAIN 3 6. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 7 TH JUNE 2017. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DATED : 7 TH JUNE, 2017. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI