Shri Sahil M. Shah,L/H of Late Shri Mahendrabhai Himmatbhai Shah HUF, Surat V. Income Tax Officer Ward 1(3)(3), Surat

ITA 143/SRT/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5813 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Search and seizure; Accommodation entries
• Section: 143(3); 147

Judgement Text

SHRI MAHENDRA HIMMATBHAI SHAH (HUF) VS. ITO, WARD-1(3)(3), SURAT /ITA NO.143/SRT/2017 FOR A.Y. 2008-09 PAGE 1 OF 4 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SANDEEP GOSAIN, HON'BLE JUDICIAL MEMBER AND SHRI O.P.MEENA, HON'BLE ACCOUNTANT MEMBER . . ./ I.T.A NO.143/SRT/2017 [ [ / ASSESSMENT YEAR: 2008-09 SHRI MAHENDRA HIMMATBHAI SHAH (HUF), 7 TH SWASHRAYA SOCIETY, ATHWAGATE, NANPURA, SURAT. [PAN: AACHM 3666 C] V S . THE INCOME TAX OFFICER, WARD-1(3)(3), SURAT. / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI RASESH SHAH CA /REVENUE BY MRS. ANUPAM SINGLA SR.DR / DATE OF HEARING: 10.02.2020 /PRONOUNCEMENT ON: 12.02.2020 /O R D E R PER SANDEEP GOSAIN, JM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-2, SURAT DATED 31.07.2017 FOR THE ASSESSMENT YEAR 2008-09. 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN REOPENING ASSESSMENT U/S. 147 OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN MAKING ADDITION OF RS.8,40,015/- FOR ALLEGED BOGUS PURCHASES. 3. IT IS THEREFORE PRAYED THAT ASSESSMENT FRAMED U/S 143(3) R.W.S. 147 OF THE ACT MAY KINDLY BE QUASHED AND/OR ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) MAY PLEASE BE DELETED. 4. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. SHRI MAHENDRA HIMMATBHAI SHAH (HUF) VS. ITO, WARD-1(3)(3), SURAT /ITA NO.143/SRT/2017 FOR A.Y. 2008-09 PAGE 2 OF 4 3. GROUND NO.1 RAISED BY THE ASSESSEE HAS NOT BEEN PRESSED BEFORE US, THEREFORE THESE GROUND NO.1 OF APPEAL STANDS DISMISSED AS NOT PRESSED. 4. GROUND NO.2 RAISED BY THE ASSESSEE RELATES TO LD.CIT(A) IN CONFIRMING THE ADDITION MADE BY THE LD.ASSESSING OFFICER(AO) OF RS.8,40,015/- FOR ALLEGED BOGUS PURCHASES. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 13.03.2009 BY DECLARING TOTAL INCOME OF RS.1,83,630/-. A SEARCH AND SEIZURE ACTION WAS CARRIED OUT BY THE INVESTIGATION WING, MUMBAI IN SHRI RAJENDRA JAIN, SHRI SANJAY CHOUDHARY & SHRI DHARMICHAND JAIN GROUP OF CASES ON 03.10.2013 WHICH RESULTED IN COLLECTION OF EVIDENCES AND OTHER FINDINGS, WHICH CONCLUSIVELY PROVED THAT THE SAID SHRI RAJENDRA JAIN AND OTHERS HAD GIVEN ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS OF RS.8,40,0158/- DURING A.Y. 2008-09 TO THE ASSESSEE, SHRI MAHENDRA HIMMATLAL SHAH, HUF. SUBSEQUENTLY, THE LD.AO UPHELD THE BOGUS PURCHASES OF RS.8,40,015/- FROM M/S.AVI EXPORTS, A BENAMI CONCERN RUN BY SHRI RAJENDRA JAIN & OTHER GROUP IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 6. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A), WHEREIN THE LD.CIT(A) SUBMITTED THAT THE VERY CIRCUMSTANTIAL EVIDENCES ITSELF SHOW THE PURCHASES WERE NOT GENUINE AND UPHELD THE ADDITION MADE BY THE LD.AO OF RS.8,40,015/-. SHRI MAHENDRA HIMMATBHAI SHAH (HUF) VS. ITO, WARD-1(3)(3), SURAT /ITA NO.143/SRT/2017 FOR A.Y. 2008-09 PAGE 3 OF 4 7. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL ON THE GROUNDS MENTIONED HEREIN ABOVE. THE LD.COUNSEL SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE OF SHRI MAHENDRA HIMMATLAL SHAH,(HUF) V. ITO WARD-1(3)(3), SURAT IN I.T.A.NO.2273/AHD/2016 A.Y. 2007-08 DATED 15.07.2019 ( COPY FILED ) PASSED BY SURAT BENCH OF ITAT. 8. ON THE OTHER HAND, THE LD.CIT-D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE COUNSELS OF BOTH THE PARTIES AND WE ALSO PERUSED THE MATERIAL PLACED ON RECORD AND ORDERS PASSED BY THE REVENUE AUTHORITY AS WELL AS THE JUDGMENTS CITED BY THE PARTIES. FROM THE RECORDS, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION CO-ORDINATE BENCH OF ITAT IN SHRI MAHENDRA HIMMATLAL SHAH,(HUF) V. ITO WARD-1(3)(3), SURAT IN I.T.A.NO.2273/AHD/2016 A.Y. 2007-08 IN WHICH PARA 12 TO 14 HELD AS UNDER: 12. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNED ORDER. ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, MUMBAI, THE A.O. FOUND THAT THE APPELLANT HAD TAKEN ACCOMMODATION ENTRY OF BOGUS PURCHASE BILLS FROM M/S.AVI EXPORTS OF RS.9,95,265/-. BUT ASSESSEE REFUSED FOR BOGUS ALLEGATION AND IN ORDER TO AVOID THE FURTHER LITIGATION. LD.A.R. CITED AN ORDER OF THE BENCH IN ITA NO.1396/AHD/2017 FOR ASSESSMENT YEAR 2007-08 WHEREIN SIMILAR CIRCUMSTANCES, MATTER WAS PARTLY ALLOWED BY THE TRIBUNAL. 13. THEREFORE, IN PARITY WITH THE ABOVE SAID ORDER, WE RESTRICT THE ADDITION OF 5% OF TOTAL SO CALLED BOGUS PURCHASE OF RS.9,95,625/-. AND ASSESSING OFFICER IS DIRECTED TO DISALLOW 5% OF TOTAL BOGUS PURCHASE OF RS.9,95,625/-. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 10. THEREFORE, KEEPING IN VIEW THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE THE HON'BLE ITAT SURAT BENCH IN SHRI SHRI MAHENDRA HIMMATBHAI SHAH (HUF) VS. ITO, WARD-1(3)(3), SURAT /ITA NO.143/SRT/2017 FOR A.Y. 2008-09 PAGE 4 OF 4 MAHENDRA HIMMATLAL SHAH,(HUF) V. ITO WARD-1(3)(3), SURAT IN I.T.A.NO.2273/AHD/2016 A.Y. 2007-08 HAS PARTLY ALLOWED THE APPEAL BY DIRECTING THE LD.AO TO DISALLOW 5% OF TOTAL BOGUS PURCHASES. THEREFORE, IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY AND JUDICIAL DISCIPLINE, WE ALSO DEEM IT APPROPRIATE TO ALLOW THE APPEAL AND DISALLOW THE 5% ADDITION MADE BY THE LD.AO AND UPHELD BY THE LD.CIT(A), ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. 12. ORDER PRONOUNCED IN THE OPEN COURT ON 12-02-2020. SD/- SD/- (O.P.MEENA) (SANDEEP GOSAIN) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 12 TH FEBRUARY , 2020/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT