Siraj Ahmed Shamshuddin Dalvi, Panvel V. Income-tax Officer, Ward - 1, Panvel

ITA 1071/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6305 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 148; 11

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO S . 1070 & 1071 /P U N/201 8 / ASSESSMENT YEAR S : 201 0 - 1 1 & 20 1 1 - 12 SIRAJ AHMED SHAMSHUDDIN DALVI 102/A - 1, GULISTAN APARTMENT, 270/2, MULLA A HAMID ROAD, PANVEL - 410206 . / APPELLANT PAN: A AA PD 4151H VS. THE INCOME TAX OFFICER, WAD 1, PANVEL . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 14 . 0 1 .201 9 / DATE OF PRONOUNCEMENT: 25 . 0 1 .201 9 / ORDER PER SUSHMA CHO WLA, J M : BOTH T HE APPEAL S FILED BY ASSESSEE ARE AGAINST CONSOLIDATED ORDER OF CIT (A) - 2 , THANE , DATED 27 . 0 2 .201 8 RELATING TO ASSESSMENT YEAR S 201 0 - 1 1 AND 20 1 1 - 1 2 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO S . 1070 & 1071 /P U N/201 8 2 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE ON ESTIMATION OF PROFIT ON BOGUS PURCHASES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, IN ORDER TO ADJUDICATE THE I SSUE, REFERENCE IS BEING MADE TO THE FACTS AND ISSUE IN ITA NO. 1070 /PUN/2018, RELATING TO ASSESSMENT YEAR 201 0 - 1 1 . 3. THE ASSESSEE IN ITA NO. 1070 /PUN/2018, RELATING TO ASSESSMENT YEAR 201 0 - 1 1 HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - I AM NOT AGRE EING WITH THE ESTIMATE OF GROSS PROFIT @ 25% ON RS.6,98,906/ - RESPECTIVELY FOR ASSESSMENT YEAR 2010 - 11 ON ACCOUNT OF PURCHASE TRANSACTION WITH PARTIES AS LISTED IN THE ANNEXURE ARE DEFAULTER PARTIES. DURING THE ASSESSMENT WE WERE AGREEING WILLFULLY TO OFF ER A GROSS PROFIT OF 12.50% ON THE PURCHASE TRANSACTION WITH THE PARTIES AS LISTED IN ANNEXURE BY THE SALES TAX DEPARTMENT WITH A VIEW TO NOT TO OPT FOR PROTECTED LITIGATION AND TO BUY PEACE WITH THE DEPARTMENT. DEMAND CALCULATED BY THE A.O. IS PREJUDICIA L TO ME AND IF APPEAL IS NOT ALLOWED TO BE PROCEEDED IT AMOUNTING TO AGAINST THE LAW. I HAVE VALID REASON BEHIND INCAPABILITY TO PRODUCE THE PARTIES AS MENTIONED IN THE STATEMENT OF FACTS, WHICH HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. I AM GENU INE IN THE EYE OF LAW AND HAVE TAKEN ALL REASONABLE STEPS PRODUCE THE PARTIES. 4. DESPITE SERVICE, NONE APPEARED ON BEHALF OF ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. BUT IN VIEW OF THE ISSUE BEING COVERED BY VARIOUS ORDERS OF TRIBUNAL WIT H SPECIAL REFERENCE TO BUNCH OF APPEALS WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 28.04.2017 , I PROCEED TO DECIDE THE APPEALS AFTER HEARING THE LEARNED DEPARTMENTA L REPRESENTATIVE FOR THE REVENUE. 5. THE ASSESSEE IS IN APPEAL ON THE ESTIMATION OF PROFITS ON ALLEGED BOGUS PURCHASES MADE FROM TWO DIFFERENT PARTIES. ITA NO S . 1070 & 1071 /P U N/201 8 3 6. THE CASE OF ASSESSEE WAS REOPENED UNDER SECTION 148 OF THE ACT ON THE GROUND OF INFORMATION RECEIV ED OF THE SAID PERSONS HAVING ISSUED BOGUS PURCHASE BILLS TO LARGE NUMBER OF TAX PAYERS. THE TOTAL BOGUS PURCHASES RELATING TO THE ASSESSEE WERE 6,98,906/ - . THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SHOWN PROFIT AT 21.15% AND THE ASSESSING OFFICER ESTIMATED THE GP RATE AT 25% AND MADE ADDITION OF 1,74,727/ - . 7. THE CIT(A) CONFIRMED THE ABOVE SAID ADDITION IN THE HANDS OF ASSESSEE B UT REJECTED THE PLEA OF ASSESSEE TO RESTRICT DISALLOWANCE @ 12.5% AND UPHELD THE ORDER OF ASSESSING OFFICER IN MAKING DISALLOWANCE BY APPLYING THE RATE OF 25%. 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) AND POINTED OUT THAT HE HAD AGREED TO OFFER GP RATE @ 12.50% ON BOGUS TRANSACTIONS WITH THE PARTIES AS ENLISTED WITH SALES TAX DEPARTMENT I.E. HAWALA PARTIES. 9. THE ISSUE OF HAWALA PURCHASES AND ESTIMATION OF PROFIT ON THE HAWALA PURCHASES HAS BEEN ADDRESSED IN VARIOUS DECISIONS BY THE PUN E BENCH OF TRIBUNAL WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT (SUPRA) . BOTH THE ASSESSING OFFICER AND CIT(A) HAVE APPLIED THE RATE OF 25% TO ESTIMATE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE. THE PLEA OF ASSESSEE IS THAT DISALLOWANC E BE RESTRICTED TO 12.5%. IN SERIES OF DECISIONS, DIRECTIONS HAVE BEEN GIVEN TO APPLY GP RATE OF 10% OVER AND ABOVE THE GP RATE DECLARED BY ASSESSEE. IN THE YEARS UNDER APPEAL, THE ASSESSEE HAS ALREADY DECLARED GP RATE OF 21. 1 5% IN ASSESSMENT YEAR 2010 - 1 1 AND 17.49% IN ASSESSMENT YEAR 2011 - 12. THE ASSESSEE POINTS OUT THAT THE ADDITION BE RESTRICTED @ 12.50%. THE ASSESSING OFFICER HAS IN ALL FAIRNESS, APPLIED GP RATE OF 25% ON TOTAL ITA NO S . 1070 & 1071 /P U N/201 8 4 PURCHASES AS AGAINST GP RATE OF 21.15% . HOWEVER, THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE ADDITION TO GP RATE OF 10% OVER AND ABOVE GP RATE DECLARED BY ASSESSEE. THERE IS NO MERIT IN THE PLEA OF ASSESSEE THAT DISALLOWANCE BE RESTRICTED TO 12.50% OF TOTAL VALUE OF PURCHASES. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, PARTLY ALLOWED. 10. THE FACTS AND ISSUE IN ITA NO. 1071 /PUN/2018 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO. 1070 /PUN/2018 AND THE DECISION IN ITA NO. 1070 /PUN/2018 SHALL APPLY MUTATIS MUTANDIS TO ITA NO. 1071 /PUN/2018. 11. IN THE RESULT, BOTH THE APPEAL S OF ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 25 TH DAY OF JANUARY , 201 9 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 25 TH JANUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESP ONDENT; 3. ( ) / THE CIT(A) - 2, THANE ; 4. THE PR. CIT - 2 , THANE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COP Y // / SR. PRIVATE SECRETARY , / ITAT, PUNE