ITO, 27(3)(5), MUMBAI V. VIPUL PREMCHAND SHAH, MUMBAI

ITA 1067/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4557 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI SR
• Keywords: Bogus purchase
• Section: 133(6); 143(1); 145(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1067/M/2019 ASSESSMENT YEAR: 2009-10 ITO 27(3)(5), R.NO.428, 4 TH FLOOR, TOWER NO.06, VASHI, NAVI MUMBAI-400 703 VS. SHRI VIPUL PREMCHAND SHAH, 1/5, KANDHARI COLONY, 2 ND FLOOR, CHEMBUR, MUMBAI 400 071 PAN: AACPS 6641P (APPELLANT) (RE SPONDENT) ITA NO.1068/M/2019 ASSESSMENT YEAR: 2009-10 ITO 27(3)(5), R.NO.428, 4 TH FLOOR, TOWER NO.06, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI-400 703 VS. VINIT P. SHAH (HUF), 2/4, KANDHARI COLONY, 2 ND FLOOR, CHEMBUR, MUMBAI 400 071 PAN: AAAHV4423J (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI R. BHOOPATHI, SR. A.R. DATE OF HEARING : 10.02.2020 DATE OF PRONOUNCEMENT : 18.02.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY TH E REVENUE AGAINST THE COMMON ORDER DATED 19.12.2018 O F THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. ITA NO.1067/M/2019 & ITA NO.1068/M/2019 SHRI VIPUL PREMCHAND SHAH & VINIT P. SHAH (HUF) 2 2. DURING THE COURSE OF HEARING, NEITHER ASSESSEE N OR HIS AUTHORIZED REPRESENTATIVE APPEARED TO ATTEND THE HE ARING NOR ANY APPLICATION SEEKING ADJOURNMENT WAS FILED. THER EFORE , WE ARE DISPOSING OFF THE APPEAL AFTER HEARING THE LD. D.R. AND GOING THROUGH THE FACTS OF THE CASE. 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE ADDITION TO 12.5% OF THE ALLEGED BOGUS PURCHASES OF RS.43,15,874/- AS AGAINST 15% ADDITION ON BOGUS PURCHASES MADE BY THE AO. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED T HE RETURN OF INCOME ON 26.09.2009 DECLARING A TOTAL INCOME OF RS .3,68,490/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THEREAFTER, THE AO RECEIVED INFORMATION FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA AS WELL AS DG IT, MUMBAI THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENT RIES FROM SUSPICIOUS HAWALA DEALERS. ACCORDINGLY, THE CASE O F THE ASSESSEE IS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 DATED 24.03.2014 WHICH WAS DULY SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS THE AO OBSERVED FROM THE DETAILS FILED BY THE ASSESSEE THA T ASSESSEE HAS MADE A TOTAL PURCHASE OF RS.43,15,874/- FROM 12 PAR TIES DETAILS WHEREOF ARE GIVEN IN PARA 4.2. OF THE ASSESSMENT OR DER. THE ASSESSEE WAS CALLED UPON TO PROVE THE GENUINENESS O F THE PURCHASES BY FILING THE NECESSARY EVIDENCES. THE A O ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO VARIOUS S UPPLIERS TO VERIFY THE GENUINENESS OF THE PURCHASES, HOWEVER, T HESE NOTICES COULD NOT BE SERVED ON THE ASSESSEE. THE ASSESSEE FILED ITA NO.1067/M/2019 & ITA NO.1068/M/2019 SHRI VIPUL PREMCHAND SHAH & VINIT P. SHAH (HUF) 3 EVIDENCES IN THE FORM OF PURCHASE BILLS, INVOICES, SALES BILL, PAYMENT DETAILS ETC. HOWEVER, THE AO WAS NOT SATIS FIED WITH THE GENUINENESS OF THE PURCHASES FOR THE REASON THAT S AME REMAINED UNVERIFIED. THE AO FINALLY REJECTED THE B OOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT AND ESTIMA TED THE INCOME OF BOGUS PURCHASES BY APPLYING 15% ON THE AL LEGED BOGUS PURCHASES BY FOLLOWING THE DECISION OF HONBL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH (2 013) 356 ITR 451 (GUJ). THE LD. CIT(A) IN THE APPELLATE PROCEED INGS REDUCED THE ADDITION TO 12.5% OF THE ARISEN BOGUS PURCHASES BY FOLLOWING THE DECISION OF CIT VS. SIMIT P. SHETH (SUPRA) AND ALSO THE CASE CIT VS. BHOLANATH POLY FAB PVT. LTD. ITA NO.63 OF 2 012 DATED 23.10.2012 OF HONBLE GUJARAT HIGH COURT. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) AFT ER CONSIDERING THE CONTENTIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITION A T 12.50% BY HOLDING THAT 15% IS UNREASONABLE AND EXCESSIVE. 6. AFTER HEARING THE LD. DR AND PERUSING THE RECORD S AS PLACED BEFORE US, WE NOTE THAT ASSESSEE IS WHOLESALERS AND SEMI WHOLESALERS OF CHEMICALS. UNDOUBTEDLY, THE ASSESSEE WAS BENEFICIARY OF HAWALA PURCHASES AND THEREFORE THE A O APPLIED A RATE OF 15% ON THE BOGUS PURCHASES TO ASSESS THE PR OFIT EMBEDDED THEREIN WHICH WAS REDUCED BY LD. CIT(A) TO 12.50% . IN OUR OPINION THE RATE DIRECTED BY LD CIT(A) IS M OST REASONABLE KEEPING IN VIEW THE FACTS OF THE PRESENT CASE. ACCO RDINGLY WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING THE AP PEAL OF THE REVENUE. ITA NO.1067/M/2019 & ITA NO.1068/M/2019 SHRI VIPUL PREMCHAND SHAH & VINIT P. SHAH (HUF) 4 ITA NO.1068/M/2019 7. THE ISSUE RAISED IN THIS APPEAL IS IDENTICAL TO ONE AS DECIDED BY US IN ITA NO. 1067/MUM/2019. THEREFORE O UR DECISION IN ITA NO/ 1067/MUM/2019 WOULD, MUTATIS MU TANDIS, APPLY TO THIS APPEAL AS WELL. ACCORDINGLY THE REVEN UES APPEAL IS DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.02.2020. SD/- SD/- (C.N. PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 .02.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.