SIGMA PRINTERS P.LTD, MUMBAI V. ITO 8(2)(2), MUMBAI

ITA 1143/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0588 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Keywords: Bogus purchase; Non passing of speaking order

Judgement Text

1 M/S SIGMA PRINTERS PVT LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) ITA NO.1143/MUM /2017 (ASSESSMENT YEAR 2009-10) M/S SIGMA PRINTERS PVT LTD A-12, C-40, ROYAL INDUSTRIAL ESTATE, NAIGAON CROSS ROAD, WADALA, MUMBAI-31 PAN AABCS4549L VS ITO 8(2(2), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI VIMAL PUNMIYA RESPONDENT BY SHRI B SATYANARAYANA RAJU DATE OF HEARING 17-05-2017 DATE OF PRONOUNCEMENT 06- 06-2017 O R D E R THIS IS AN APPEAL BY THE ASSESSEE WHEREIN THE ASSE SSEE IS AGGRIEVED BY THE ORDER OF THE LEARNED CIT-A WHEREIN HUNDRED P ERCENT DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE HAS BEEN SUSTAINED AMOUNT ING TO RS.12,41,102. 2. I HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECO RDS. I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED HUNDRED PERCENT DISALLOW ANCE FOR BOGUS PURCHASE CANNOT BE DONE. THIS PROPOSITION IS SUPPOR TED FROM HONOURABLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF NIKUNJ EXIMP ENTERPRISES. HOWEVER THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MA KING PURCHASE THROUGH THE GREY MARKET GIVES THE ASSEESSEE SAVINGS ON ACCOUNT OF NON PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXC HEQUER. IN SIMILAR SITUATION ON THE FACTS AND CIRCUMSTANCES OF THE CAS E A DISALLOWANCE OF 2 M/S SIGMA PRINTERS PVT LTD 12.5% OF THE BOGUS PURCHASE HAS BEEN CONSIDERED TO MEET THE END OF JUSTICE IN A NUMBER OF CASES AT THE MUMBAI TRIBUNAL . ACCORDINGLY I HOLD THAT THE DISALLOWANCE IN THIS CASE SHOULD BE RESTRICTED TO 12.5% OF THE BOGUS PURCHASE. LEARNED COUNSEL OF THE ASSESSEE HAS FAIRLY AGREED TO THIS PROPOSITION. 3. LEARNED DEPARTMENTAL REPRESENTATIVE HAS PLACED RELI ANCE UPON A HONOURABLE GUJARAT HIGH COURT DECISION WHEREIN HUND RED PERCENT DISALLOWANCE OF BOGUS PURCHASE HAS BEEN UPHELD. SPE CIAL LEAVE PETITION AGAINST THIS ORDER HAS BEEN DISMISSED BY THE HONOUR ABLE APEX COURT. I FIND THAT DISMISSAL OF SLP BY A NON SPEAKING ORDER BY THE HONOURABLE APEX COURT DOESN'T MERGE THE ORDER OF THE HONOURABL E HIGH COURT WITH THAT OF THE APEX COURT. MOREOVER SUCH DISALLOW ANCES DEPEND UPON THE FACTS AND CIRCUMSTANCES OF THE CASE AS EXPOUNDE D BY HONOURABLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXI MP ENTERPRISES. ACCORDINGLY I DIRECT THAT THE DISALLOWANCE BE RESTR ICTED IN THIS CASE TO 12.5% OF THE BOGUS PURCHASE. 4. IN THE RESULT THIS APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/06/2017. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DT : 06 TH JUNE, 2017 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT BY ORDER 5. DR /TRUE COPY/ ASSTT. REGISTRAR, ITAT, MUMBAI