Appeal details
Counselvise Citation
[2018] 121 COUNSELVISE.COM (IT) 8921 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-10-2018
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2010-2011
Appeal Filed On
27-02-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI PAWAN SINGH, JM I.T.A. NO. 1131/MUM/2018 ( ASSESSMENT YEAR: 2010 - 11 ) MITALAL B. JAIN 102/133/144 RIDDHI APARTMENT, 10 TH KHETWADI BACK ROAD, GIRGAUM, MUMBAI - 4 00 004 VS. ITO - 19(2)(3) 1 ST & 2 ND FLOOOR, MATRU MANDIR, TARDEO NANA CHOWK, GRANT ROAD, MUMBAI - 400 007 PAN/GIR NO. ADMPJ 5673 P ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI ASHOK MEHTA RESPONDENT BY : SHRI S. K. BEPARI DATE OF HEARING : 01.10.2018 DATE OF PRONOUNCEMENT : 05.10 . 2018 O R D E R PER S HAMIM YAHYA, A. M.: THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 53, MUMBAI (LD.CIT(A) FOR SHORT) DATED 28.12.2017 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2010 - 11. 2. TH E ASSESSEE IS AGGRIEVED THAT THE L D. CIT(A) HAS ERRED IN SUSTAINING 12.5% DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES AND ALSO IN UPHOLDING THE VALIDITY OF REOPENING. 3. BRIEF FACTS OF THE CASE ARE A S UNDER: 2 ITA NO. 1131/MUM/2018 THE ASSESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING ABOUT VITAL INFORMATION RECEIVED FROM SALES TAX DEPARTMENT REGARDING PARTIES INDULGING IN ISSUING BOGUS BILLS WITHOUT SUPPLY OF ANY MATERIAL. THE ASSESSEE WAS BENEFICIARY OF SEVEN TEEN SUCH PARTIES FROM WHOM PURCHASES OF RS.1,43,41,683/ - WAS CLAIMED AS TABULATED BELOW: - SR. NO. NAME OF THE HAWALAPARTY F.Y. AMOUNT (RS.) 1 VIJAY INDUSTRIES 2009 - 10 3,05,505 2 DIPESH METAL PVT. LTD. 2009 - 10 20,92,778 3 KAILASH METAL PVT. LTD. 2009 - 10 15,43,158 4 DEV DEEP STEEL 2009 - 10 2,54,575 5 MOKSHA METALS PVT. LTD. 2009 - 10 1,30,395 6 KANAK STEEL (INDIA) 2009 - 10 24,93,698 7 BOHRA METAL INDUSTRIES 2009 - 10 6,97,327 8 BHANDAR STEEL INDUSTRIES 2009 - 10 2,69,007 9 RAJ IMPEX 2009 - 10 4,51,483 10 RAT ANDEEPLMPEX 2009 - 10 5,08,662 11 SHUBHLABH METAL AND ALLOYS 2009 - 10 16,00,807 12 STELCO STEEL INDUSTRIES 2009 - 10 10,45,435 13 ROLEX TRADING CO. 2009 - 10 9,79,158 14 SHREE KESHARLMPEX METALS PVT. LTD. 2009 - 10 2,97,820 15 VISHAL PIPE FITTINGS 2 009 - 10 3,17,895 16 PRIYA STEEL CORPORATION 2009 - 10 10,42,145 17 WEL STEEL (INDIA) 2009 - 10 3,11,835 TOTAL 1,43,41,683 B ASED ON THIS, NOTICE U/S.148 OF THE ACT WAS ISSUED ON 18.09.2014. IN RESPONSE TO THE SAID NOTICE, THE AR OF THE APPELLANT REQUESTED TO TREAT THE RETURN OF INCOME ORIGINALLY FILED AS RETURN FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. 3 ITA NO. 1131/MUM/2018 4. IN THE ASSESSMENT ORDER, THE A.O. OBSERVED T H AT TH E ASSESSEE IS AN INDIVIDUAL RUNNING PROPRIETARY FIRM BY THE NAME M/S. ARISTO PIPE & FITTINGS . THE AO ISSUED NOTICES U/S. 133(6) OF THE ACT BY REGISTERED POST AT THE ADDRESS PROVIDED BY THE ASSESSEE IN RESPECT OF THE IMPUGNED PARTIES. THESE NOTICES COULD NOT BE SERVED. THIS WAS INFORMED TO THE APPELLANT WHO WAS REQUESTED TO PRODUCE THE PARTIES AND FURNISH EVIDENCE TO SUPPORT THE GENUINENESS OF THE PURCHASES CLAIMED. DETAILS SUCH AS INVOICES, COPIES OF LEDGER ACCOUNT AND DETAILS OF TRANSACTIONS OF GOODS WERE CALLED. THE ASSESSEE FURNISHED PURCHASE INVOICES, COPY OF ITS OWN BANK STATEMENTS SHOWING PA YMENTS BEING MADE. QUANTITATIVE TALLY IN RESPECT OF ENTIRE PURCHASES FROM THE TWO PARTIES AND THE CORRESPONDING SALES. THE AO NOTED THAT THE PARTIES WERE NOT PRODUCED. INWARD REGISTER, STOCK REGISTER WERE NOT PRODUCED. RELYING ON VARIOUS CASE LAWS, THE A.O . REJECTED THE BOOKS OF ACCOUNTS AND DISALLOWED 12.5% OF THE IMPUGNED PURCHASES. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) CHALLENGING BOTH THE VALIDITY OF REOPENING AS WELL AS MERITS OF THE ADDITION. 5 . AS REGARDS THE CHALLEN GE TO REOPENING, THE LD. CIT(A) CONFIRMED THE A.OS ACTION BY HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS CAREFULLY. I AM UNABLE TO ACCEPT THIS ARGUMENT OF THE APPELLANT. IT IS SEEN THAT THE ASSESSING OFFICER HAD RECEIVED CREDIBLE INFORMATION AB OUT PARTIES ISSUING BOGUS BILLS WITHOUT SUPPLYING ANY MATERIAL. THE APPELLANT WAS A BENEFICIARY OF SUCH BOGUS BILLS. IT IS A TRITE LAW THAT FOR REOPENING OF ASSESSMENT, THERE MUST BE ONLY A PRIMA FACIE BASIS FOR FORMATION OF REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT. THE ESCAPEMENT OF INCOME NEED NOT 4 ITA NO. 1131/MUM/2018 BE PROVED AT THIS STAGE. THE INFORMATION RECEIVED CLEARLY INDICATED THAT BOGUS PURCHASES WERE CLAIMED AS EXPENSES AND THEREFORE INCOME HAD ESCAPED ASSESSMENT. IMPUGNED PARTIES HAD ADMITTED TO NOT SUP PLYING ANY GOODS AND ONLY ISSUING BOGUS BILLS. THIS FACT WAS NOT DISCLOSED BY THE APPELLANT. THE APPELLANT HAS NOT SHOWN HOW HE CAN SAY THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND FORMED HIS OPINION OF THE INCOME ESCAPING ASSESSMENT. THE REASON S RECORDED CLEARLY SHOWS THE APPLICATION OF MIND BY THE ASSESSING OFFICER. THE RETURN WAS ONLY PROCESSED U/S 143(1) EARLIER AND NO ORDER U/S 143(3) OF THE ACT WAS PASSED EARLIER.HENCE, IT IS HELD THAT THERE IS NO INFIRMITY IN REOPENING OF THE ASSESSMENT AN D THE GROUNDS CHALLENGING THE REOPENING OF ASSESSMENT ARE DISMISSED/ IN THE RESULT, GROUND OF APPEAL NO. L IS DISMISSED. 6 . AS REGARDS THE MERITS HE CONFIRMED THE A.O.S ACTION BY HOLDING AS UNDER: 6.4. IT IS AN UNDISPUTED FACT THAT THE ASSESSING OFFICER IDENTIFIED PARTIES BASED ON INFORMATION RECEIVED FROM INVESTIGATION WING. ON HIS PART, THE AO HAS ALSO GONE INTO THE ISSUE BY SENDING 133(6) NOTICES. AND DEPUTING AN INSPECTOR TO SERVE THE NOTICES AND MAKE INQUIRIES. HOWEVER, AS FAR AS THE EVIDENCE SUBMIT TED BY THE APPELLANT IS ALSO CONCERNED, THE APPELLANT HAS FILED HIS OWN BOOKS, PURCHASE BILLS/CHALLANS, LEDGER ACCOUNTS AND HAS ITS OWN BANK STATEMENT TO FURTHER HIS ARGUMENT. THE FACT THAT THE PAYMENTS ARE BEING MADE THROUGH CHEQUES IS NOT SOMETHING THAT IS BEING DOUBTED. IN FACT, THE CONTENTIOUS ISSUE IS THAT THESE PARTIES WHICH ARE INDICATED BY THE SALES TAX DEPARTMENT THROUGH A PROCEDURE WHICH APPEARS TO BE TECHNICALLY CORRECT ON PAPER, ARE IN FACT ENGAGED IN FALSE BILLING FOR A FEE/COMMISSION. THE ONUS OF PROVING THE ENTIRE TRANSACTIONS TO BE GENUINE IS DEFINITELY ON THE TAX PAYER, WHEN IT IS MAKING THE CLAIM OF PURCHASE AND ESPECIALLY IN LIGHT OF THE DOUBT THAT HAS BEEN RAISED BY THE ENQUIRIES CONDUCTED BY THE SALES TAX DEPARTMENT, THE ONUS IS EVEN MOR E ON THE TAX PAYER TO SHOW THAT AS FAR AS HE IS CONCERNED, HE HAS DISCHARGED HIS TAX RELATED LIABILITIES IN AN ACCURATE MANNER.RSO THEREFORE, WHILE ON ONE HAND THE AO MAY NOT HAVE A CLINCHING PROOF BUT THE PRIMARY RESPONSIBILITY WHICH IS ENSUED ON THE TAX PAYER HAS ALSO NOT BEEN DISCHARGED IN TERMS OF ESTABLISHING THE GENUINENESS OF THE TRANSACTION. MERELY FILING COPIES OF HIS OWN LEDGER ACCOUNTS AND BANK ACCOUNTS DOES IN NO WAY ESTABLISH THAT THE PARTIES ACTUALLY EXISTED AND GENUINELY SUPPLIED MATERIAL, BU T THEN CONSIDERING THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN DISPUTED, PURCHASES HAVE NOT BEEN PROVED AS BOGUS AND NEITHER CHEQUES HAVE BEEN SHOWN TO BE RECEIVED BACK AS CASH BY THE APPELLANT, I AM OF THE CONSIDERED VIEW THAT IN THE CONTEXT OF THE SITUATION , THE CAUSE OF JUSTICE WOULD BE SERVED BY LOOKING AT THE GROSS PROFIT MARGINS BEING DECLARED BY THE APPELLANT. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHOLANATHPOLYFAB PVT LTD. (2013) 355 ITR 290 AND THEREAFTER IN THE CASE OF CIT VS. SIMIT P. SHETH ( 2013) 219 TAXMAN 85 (GUJ) HAS HELD THAT IN SUCH FACTS AND CIRCUMSTANCES, NOT ENTIRE PURCHASE PRICE BUT ONLY PROFIT ELEMENT 5 ITA NO. 1131/MUM/2018 EMBEDDED IN SUCH PURCHASES CAN BE ADDED. THE FINDING OF THE HON'BLE GUJARAT HIGH COURT IN TH E CASE OF CIT VS. SIMIT P. SETH. 7 . AGAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 8 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AS REGARDS THE REOPENING OF THE ASSESSEE, ON A CAREFUL CONSIDERATION, WE NOTE THAT IN THIS CASE INFORMATION WAS RECEIVED B Y THE ASSESSING OFFICER FROM DGIT INVESTIGATION (MUMBAI) THERE ARE SOME PARTIES WHO ARE ENGAGED IN THE HAWALA TRANSACTIONS AND ARE ALSO INVOLVED IN ISSUING BOGUS PURCHASE BILLS FOR SALE OF MATERIAL WITHOUT DELIVERY OF GOODS, WHICH INFORMATION WAS BASED ON INFORMATION RECEIVED BY REVENUE FROM MAHARASHTRA SALES TAX AUTHORITY. INFORMATION WAS RECEIVED THAT THE ASSESSEE WAS BENEFICIARY OF HAWALA ACCOMMODATION ENTRIES FROM ENTRY PROVIDERS BY WAY OF BOGUS PURCHASE. THE ACCOMMODATION ENTRY PROVIDER HAS DEPOSED AND ADMITTED BEFORE THE MAHARASHTRA SALES TAX AUTHORITY VIDE STATEMENT/ AFFIDAVIT THAT THEY WERE ENGAGED IN PROVIDING BOGUS ACCOMMODATION ENTRIES WHEREIN BOGUS SALE BILLS WERE ISSUED WITHOUT DELIVERY OF GOODS, I N CONSIDERATION FOR COMMISSION. THESE, ACCOMMODA TION ENTRY PROVIDERS, ON RECEIPT OF CHEQUES FROM PARTIES AGAINST BOGUS BILLS FOR SALE OF MATERIAL, LATER ON WITHDREW CASH FROM THEIR BANK ACCOUNTS, WHICH WAS RETURNED TO BENEFICIARIES OF BOGUS BILLS AFTER DEDUCTION OF THEIR AGREED COMMISSION. THE ASSESSEE WAS STATED TO BE ONE OF THE BENEFICIARIES OF THESE BOGUS ENTRIES OF SALE OF MATERIAL FROM HAWALA ENTRY OPERATORS IN FAVOUR OF THE ASSESSEE WHEREIN THE ASSESSEE MADE ALLEGED BOGUS PURCHASES THROUGH THESE BOGUS BILLS ISSUED BY HAWALA ENTRY PROVIDERS IN FAVOU R OF THE ASSESSEE. 6 ITA NO. 1131/MUM/2018 THESE DEALERS WERE SURVEYED BY THE SALES TAX INVESTIGATION DEPARTMENT WHEREBY THE DIRECTORS OF THESE DEALERS HAVE ADMITTED IN A DEPOSITION VIDE STATEMENTS/AFFIDAVIT MADE BEFORE THE SALES TAX DEPARTMENT THAT THEY WERE INVOLVED IN. ISSUING BOGUS PURCHASE BILLS WITHOUT DELIVERY OF ANY MATERIAL. THERE IS A LIST OF SUCH PARTIES WHEREIN THE ASSESSEE IS STATED TO BE BENEFICIARY OF BOGUS PURCHASE BILLS. 9 . FROM THE ABOVE, WE FIND THAT TANGIBLE AND COGENT INCRIMINATING MATERIAL WERE RECEIVED BY THE AO WHICH CLEARLY SHOWED THAT THE ASSESSEE WAS BENEFICIARY OF BOGUS PURCHASE ENTRIES FROM BOGUS ENTRY PROVIDERS WHICH FORMED THE REASON TO BELIEVE BY THE AO THAT INCOME HAS ESCAPED ASSESSMENT. THE INFORMATION SO RECEIVED BY THE AO HAS LIVE LINK WITH REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. ON THESE INCRIMINATING TANGIBLE MATERIAL INFORMATION, ASSESSMENT WAS REOPENED. AT THIS STAGE THERE HAS TO BE PRIMA FACIE BELIEF BASED ON SOME TANGIBLE AND MATERIAL INFORMATION ABOUT ESCAPEMENT OF INCOME AND THE SAME IS NOT REQUIRED TO BE PROVED TO THE GUILT. IN THIS REGARD, WE REFER TO THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT(A) VS. RAJESH JHAVERI STOCK BROKERS P. LTD, 291 ITR 500: - 'SECTION 147 AUTHORISES AND PERMITS THE ASSESSING OFFIC ER TO ASSESS OR REASSESS INCOME CHARGEABLE TO LAX IF HE HAS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD 'REASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE AO HAS CAUSE OR JUSTIFIC ATION TO KNOW OR SUPPOSE (HAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL STATUTE WITH SO LICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. AS OBSERVED BY THE SUPREME COURT IN CENTRAL PROVINCES MANAGNESE ORE CO, LTD. V. ITO(1991) 191 ITR 662, FOR INITIATION OF ACTION UNDER SECTION 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TIME) 7 ITA NO. 1131/MUM/2018 FULFILLMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STAGE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE E STABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPEME NT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE AO IS WITHIN THE REALM OF SUBJECTIVE SATISFACTION ITO V. SELECTED DALURBAND COAL CO, (P.) LTD. (1996) 217 ITR 597 (SUPREME COURT): RAYMOND WOOLLEN MILLS LTD. V. ITO (199 9) 236 ITR 34 (SUPREME COURT). 1 0 . THE ABOVE DISCUSSION AND PRECEDENT FROM APEX COURT FULLY JUSTIFY THE VALIDITY OF REOPENING IN THIS CASE. FURTHER WE FIND THAT THE LD. CIT(A) HAS CAREFULLY EXAMINED THE ISSUE AND HAS PROPERLY APPRECIATED THE ISSUE. HENC E, WE DO NOT FIND ANY INFIRMITY IN THE SAME. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUE OF REOPENING. SINCE, THE ISSUE HAS BEEN DECIDED ON THE BASIS OF THE HONBLE APEX COURT DECISION, THE OTHER CASE LAWS REFERRED BY ASSESSEE ARE NOT S UPPORTING THE ASSESSEES CASE. 1 1 . AS REGARDS THE MERITS OF ADDITION, WE FIND THAT CREDIBLE AND COGENT INFORMATION WAS RECEIVED IN THIS CASE BY THE ASSESSING OFFICER THAT CERTAIN ACCOMMODATION ENTRY PROVIDER/BOGUS SUPPLIERS WERE BEING USED BY CERTAIN PAR TIES TO OBTAINED BOGUS BILLS. THE ASSESSEE WAS FOUND TO HAVE TAKEN ACCOMMODATION ENTRY/BOGUS PURCHASE BILLS DURING THE CONCERNED ASSESSMENT YEAR FROM DIFFERENT PARTIES. BASED UPON THIS INFORMATION ASSESSMENT WAS REOPENED. I N SUCH FACTUAL SCENARIO ASSESSIN G OFFICER HAS MADE THE NECESSARY ENQUIRY. THE ISSUE OF NOTICE TO ALL THE PARTIES HAVE RETURNED UNSERVED. ASSESSEE HAS NOT BEEN ABLE TO PROVIDE ANY CONFIRMATION FROM ANY OF THE PARTY. ASSESSEE HAS ALSO 8 ITA NO. 1131/MUM/2018 NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. THE NECESS ARY EVIDENCE FOR TRANSPORTATION OF GOODS HAVE NOT BEEN PROVIDED BY THE ASSESSEE. IN THIS FACTUAL SCENARIO IT IS AMPLY THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION OF DOCUMENTS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS ARE BOGUS AND NON - EXISTENT AND THERE IS NO COGENT EVIDENCE OF TRANSPORTATION OF GOODS. 12. THE S ALES T AX DEPARTMENT IN ITS ENQUIRY HAVE FOUND THE PARTIES TO BE PROVIDING BOGUS ACCOMMODATION ENTRIES. THE ASSESSING OFFICER ALSO ISSUED NOTICES TO THESE PARTIES AT THE ADDRESSES PROVIDED BY THE ASSESSEE. ALL THESE NOTICES HAVE RETURNED UNSERVED. ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. THE ASSESSING OFFICER HAS NOTED THAT THERE IS NO COGENT EVIDENCE OF THE PROVISION OF GOODS. NEITHER THE ASSESSEE HAS BEEN ABLE TO PRODUCE ANY CONFIRMATION FROM THESE PARTIES. IN SUCH CIRCUMSTANCES, THERE IS NO DOUBT THAT THESE PARTIES ARE NON - EXISTENT. WE FIND IT FURTHER STRANGE THAT ASSESSEE WANTS THE REVENUE TO PRODUCE THE ASSESSEES OWN VENDORS, WHOM THE ASSESSEE COULD NOT PRODUCE. HENCE PURCHASE BILLS FROM THESE NON - EXISTENT THE/BOGUS PARTIES CANNOT BE TAKEN AS COGENT EVIDENCE OF PURCHASES . I N LIGHT OF THE OVERWHELMING EVIDENCE THE REVENUE AUTHORITIES CANNOT PUT UPON BLINKERS AND AC CEPT THESE PURCHASES AS GENUINE. THIS PROPOSITION IS DULY SUPPORTED BY HONBLE APEX COURT DECISION IN THE CASE OF SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC) AND CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) . IN THE PRESENT CASE THE ASSESSEE WANTS THA T THE UNASSAILABLE FACT THAT THE SUPPLIERS ARE NON - EXISTENT AND THUS BOGUS SHOULD BE IGNORED AND ONLY THE DOCUMENTS BEING PRODUCED SHOULD 9 ITA NO. 1131/MUM/2018 BE CONSIDERED. THIS PROPOSITION IS TOTALLY UNSUSTAINABLE IN LIGHT OF ABOVE APEX COURT DECISIONS. 13. WE FURTHER FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT. 18.6.2014) HAS UPHELD 100% ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN THE SALES HAVE NOT BEEN DOUBTED. HOWEVER, THE FACTS OF THAT CA SE WERE DIFFERENT. FURTHERMORE, THE SALES IN THAT CASE WERE BASICALLY TO GOVERNMENT DEPARTMENTS. HENCE, THE RATIO FROM THIS DECISION IS NOT FULLY APPLICABLE ON THE FACTS OF THE CASE. 14. IN THESE CIRCUMSTANCES, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF TAX APPEAL NO. 240 OF 2003 IN THE CASE OF N K INDUSTRIES VS. DY. CIT VIDE ORDER DATED 20.06.2016, WHEREIN 100% OF THE BOGUS PURCHASES WAS HELD TO BE ADDED IN THE HANDS OF THE ASSESSEE AND TRIBU NALS RESTRICTION OF THE ADDITION TO 25% OF THE BOGUS PURCHASES WAS SET ASIDE. IT WAS EXPOUNDED THAT WHEN PURCHASE BILLS HAVE BEEN FOUND TO BE BOGUS, 100% DISALLOWANCE WAS REQUIRED. THE SPECIAL LEAVE PETITION AGAINST THIS ORDER ALONG WITH OTHERS HAS BEEN DI SMISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 16.1.2017. 15. HOWEVER, WE NOTE THAT THIS IS NOT AN APPEAL BY THE REVENUE. HENCE, IT WILL NOT BE APPROPRIATE TO CONSIDER AND TAKE AWAY THE RELIEF ALREADY GRANTED BY THE ASSESSING OFFICER AND LD. COMMISSI ONER OF INCOME TAX (APPEALS) TO THE ASSESSEE. HENCE, WE CONFIRM THE ORDER OF LD. CIT(A). 10 ITA NO. 1131/MUM/2018 16. SINCE THE ABOVE ORDER HAS BEEN PASSED FOLLOWING THE HONBLE APEX COURT AND HONBLE HIGH COURT DECISION, THE DECISIONS OF TRIBUNAL REFERRED BY THE LD. COUNSEL OF T HE ASSESSEE ARE NOT RELEVANT. 17. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.10.2018 SD/ - SD/ - ( PAWAN SINGH ) (S HAMIM YAHYA) J UDICIAL M EMBER A CCOUNTANT MEMBER MUMBAI ; DATED : 05.10.2018 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI
