DCIT-CC3(2), MUMBAI V. DOSHI MEDICAL SERVICE , MUMBAI

ITA 11/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7803 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 01-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Bogus purchase; Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ) , D BENCH MUMBAI BEFORE SHRI RAJESH KUMAR , AM & SHRI AMARJIT SINGH, JM ITA NO. 11 /MUM/ 20 19 ( ASSESSMENT YEAR : 2011 - 12 ) DEPUTY COMMISSIONER OF INCOME TAX, CC 3(2) CENTRAL RANGE - 3, ROOM NO.1913, AIR INDIA BUILDING, NARIMAN POINT MUMBAI VS. M/S.DOSHI MEDICAL SERVICES 19, 5 TH KHETWADI LANE, LEHRI BUILDING SVP ROAD, KHETWADI MUMBAI 400 004 PAN/GIR NO. AAAFD0236F (APPELLANT ) .. (RESPONDENT ) REVENUE BY MS. ASHIMA GUPTA ASSESSEE BY NONE DA TE OF HEARING 06 / 01 /202 1 DATE OF PRONOUNCEMENT 19 / 01 /202 1 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 09/10/2018, PASSED BY THE CIT (A) - 51 , MUMBAI, FOR THE ASSESSMENT YEAR 2011 - 12. ITA NO . 11/MUM/2019 M/S. DOSHI MEDICAL SERVICES 2 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE ADDITION TO THE EXTENT OF 12.5% OF BOGUS PURCHASES AS AGAINST 100% ADDED BY THE AO. 3. THE FACTS IN BRIEF ARE THAT THE SEARCH ACTION U/S.132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF THE M/S. SHRIGUN PHARMACHEM PVT. LTD., ON 26/11/2015 AND CONSEQUENT TO SEARCH AND SEIZURE ACTION, A NOTICE U/S.153C OF THE ACT WAS ISSUED AND DULY SERVED ON THE ASSESSEE WHICH WAS COMPLIED WITH VIDE LETTER DATED 21/12/2017 STATING THEREIN THAT RETURN FILED ORIGINALLY U/S.139 MAY KINDLY BE TREATED AS RETURN IN RESPONSE TO THIS NOTICE. 4. DURING THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSESSEE HAS MADE PURCHASES FROM ARCH MARKET ING AND M/S. OVERSEAS IMPEX WHICH WERE NON - EXISTENT HAWALA ENTITIES. THE AO HELD THAT T HE ASSESSEE HAS TAKEN ONLY ENTRIES OF BOGUS BILLS WITHOUT MAKING ACTUAL PURCHASES. ACCORDINGLY, THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS CALLED UPON THE ASS ESSEE TO PROVE THE GENUINENESS OF THE PURCHASES. ASSESSEE REPLIED TO THE NOTICE OF THE AO BY FILING THE NECESSARY DOCUMENTS. HOWEVER, AO WAS NOT CONVINCED WITH THE GENUINENESS OF THE PURCHASES AND ADDED THE ENTIRE AMOUNT OF PURCHASES TO THE INCOME OF THE A SSESSEE AGGREGATING TO OF RS.78,24,815/ - . 4. IN THE APPELLATE PROCEEDINGS, LD CIT(A) DELETED THE ADDITION PARTLY TO THE EXTENT OF 87.5% AND SUSTAINED TO THE EXTENT OF 12.5% OF THE SAID BOGUS PURCHASES BY FOLLOWING THE DECISIONS OF THE HONBLE GUJARAT HIG H COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED IN ITA NO.3238 & 3293/AHD/2009 WHEREIN IT HAS BEEN HELD THAT ONLY THE PROFIT EMBEDDED IN ITA NO . 11/MUM/2019 M/S. DOSHI MEDICAL SERVICES 3 THE BOGUS PURCHASE COULD BE BROUGHT TO TAX AND NOT THE ENTIRE AMOUNT OF PURCHASES. 5. AT THE OUTSET, WE WOULD L IKE TO STATE THAT AT THE TIME OF HEARING NEITHER ASSESSEE NOR AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE BENCH WHEN THE CASE WAS CALLED FOR HEARING NOR ANY ADJOURNMENT PETITION WAS FILED BEFORE THE BENCH , THEREFORE, WE ARE DISPOSING THE APPEAL AFTER HEA RING THE LD. DR AND PERUSING THE MATERIAL ON RECORD. 6. AFTER HEARING THE LD. DR AND PERUSING THE MATERIALS ON RECORD, WE OBSERVE THAT IN THIS CASE, THE ASSESSEE UNDISPUTEDLY WAS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE TUNE OF RS.78,24,8 15 / - . THE A O ADDED THE ENTIRE AMOUNT OF PURCHASES ON THE GROUND THAT GENUINENESS OF THE PURCHASES WAS NOT PRO ED WHERE AS LD. CIT(A) REDUCED THE ADDITION OF 12.5% BY FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REFERRED TO SUPRA. AFTER PERUSING THE ORDER OF LD. CIT(A) AND THE FACTS ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS PASSED A BALANCED AND REASONED ORDER BY FOLLOWING THE DEC ISION OF THE GUJARAT HIGH COURT AND THEREFORE WE ARE INCLINED TO UP HOL D THE ORDER OF THE LD. CIT(A) AND CONSEQUENTLY APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 19 / 01 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. ITA NO . 11/MUM/2019 M/S. DOSHI MEDICAL SERVICES 4 SD/ - ( AMARJIT SINGH ) SD/ - ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 19 / 01 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT , M U M B A I 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4 . CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//