DHOLAN KUKREJA (HUF), ULHASNAGAR V. ITO WD 2(1), KALYAN

ITA 1276/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0351 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Assessee Lawyers: VIRAG M SHAH
• Keywords: Bogus purchase; Non passing of speaking order

Judgement Text

1 DOLAN KUKREJA (HUF) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) ITA NO.1274/MUM /2016 - AY 2010-11 ITA NO.1275/MUM /2016 - AY 2009-10 ITA NO.1276/MUM /2016 - AY 2011-12 DHOLAN KUKREJA (HUF) BEHIND BK NO.1965, O.T. STATION, ULHASNAGAR 421 005 PAN : AADHD7163C VS ITO, W D .2(1), KALYAN APPELLANT RESPONDENT APPELLANT BY SHRI VIRAG M SHAH RESPONDENT BY SHRI B SATYANARAYANA RAJU DATE OF HEARING 17-05-2017 DATE OF PRONOUNCEMENT 07- 06-2017 O R D E R THESE ARE THE APPEALS BY THE ASSESSEE AGAINST RESPE CTIVE ORDERS OF LD.CIT(A). THE ISSUES ARE COMMON AND ALL THE APPEA LS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE SOLITARY ISSUE RAISED PERTAINS TO 100% DISALLOW ANCE OF BOGUS PURCHASES AS UNDER:- A.Y. AMOUNT 2009-10 RS. 26,936 2010-11 RS.7,16,068 2011-12 RS.1,70,625 IN THIS CASE, AO MADE ENQUIRY PURSUANT TO INFORMATI ON RECEIVED FROM SALES-TAX DEPARTMENT THAT ASSESSEE HAD OBTAINED BOGUS PURCHAS E BILLS. CONSEQUENT UPON THE ENQUIRY, AO HELD THAT THE IMPUGNED PURCHASES WERE B OGUS AND HE MADE 100% ADDITION OF THE SAME. 3. UPON ASSESSEES APPEALS, LD.CIT(A) CONFIRMED THE AD DITION. AGAINST THOSE 2 DOLAN KUKREJA (HUF) ORDERS, ASSESSEE IS IN APPEALS BEFORE THE ITAT. 4. I HAVE HEARD THE LD.DR AND PERUSED THE RECORDS. AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE ON THE GROUND OF CO UNSEL BEING UNWELL. HOWEVER, SINCE THE ISSUE PERTAINS TO BOGUS PURCHASES AND HAS BEEN ADJUDICATED BY THE MUMBAI TRIBUNAL, THE PETITION IS REJECTED. 5. UPON CAREFUL CONSIDERATION I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED HUNDRED PERCENT DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE D ONE. THIS PROPOSITION IS SUPPORTED FROM HONOURABLE JURISDICTI ONAL HIGH COURT DECISION IN THE CASE OF NIKUNJ EXIM ENTERPRISES. HO WEVER THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PU RCHASE FROM THE GREY MARKET. MAKING PURCHASE THROUGH THE GREY MARKE T GIVES THE ASSEESSEE SAVINGS ON ACCOUNT OF NON PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SIMILAR SITUATION ON T HE FACTS AND CIRCUMSTANCES OF THE CASE A DISALLOWANCE OF 12.5% O F THE BOGUS PURCHASE HAS BEEN CONSIDERED TO MEET THE END OF JUS TICE IN A NUMBER OF CASES AT THE MUMBAI TRIBUNAL. ACCORDINGLY I HOLD TH AT THE DISALLOWANCE IN THIS CASE SHOULD BE RESTRICTED TO 12.5% OF THE BOGU S PURCHASE. LEARNED COUNSEL OF THE ASSESSEE HAS FAIRLY AGREED TO THIS P ROPOSITION. 6. 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 SLI D 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. ACCORINGLY, I DIRECT THAT THE DISALLOWANCE BE RESTR ICTED IN THIS CASE TO 12.5% OF THE BOGUS PURCHASE. 3 DOLAN KUKREJA (HUF) 7. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-06-2017 SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DT : 07 TH JUNE, 2017 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI