ITO 27 (1)(4), Mumbai V. M/S INKA ENGINEERS, Mumbai

ITA 1434/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5121 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 11-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH K MISHRA
• Keywords: Bogus purchase
• Section: 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1434/M/2019 ASSESSMENT YEAR: 2010-11 ITO 27(1)(4), ROOM NO.409, 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 VS. M/S. INKA ENGINEERS, UNIT NO.A 15A, GHATKOPAR INDL. ESTATE, LBS MARG, GHATKOPAR (W), MUMBAI 400 086 PAN: AAAF12286A (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI RAJESH K. MISHRA, D.R. DATE OF HEARING : 05.03.2020 DATE OF PRONOUNCEMENT : 27.05.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 14.12.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.7,02,989/- BY LD. CIT(A) AS MADE BY THE AO TOWARDS BOGUS PURCHASES. 3. THE FACTS IN BRIEF ARE THAT THE AO RECEIVED INFO RMATION FROM INVESTIGATION WING THAT THE ASSESSEE HAS TAKEN ACCO MMODATION PURCHASE BILLS FROM VARIOUS PARTIES AND ACCORDINGLY THE CASE OF ITA NO.1434/M/2019 M/S. INKA ENGINEERS 2 THE ASSESSEE WAS REOPENED BY ISSUING NOTICE UNDER S ECTION 148 OF THE ACT ON 19.03.2015 WHICH WAS COMPLIED WITH BY THE ASSESSEE BY SUBMITTING THAT RETURN FILED ORIGINALLY ON 17.09.2010 MAY KINDLY BE TREATED AS HAVING BEEN FILED IN RESPO NSE TO NOTICE UNDER SECTION 148 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT ASSESSEE HAS CLAIMED TOTAL PURCHASES OF RS.24,74,590/- OUT OF WHICH RS.8,03,41 6/- WERE MADE FROM FOUR HAWALA PARTIES AND HENCE CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE SAME BY FI LING BILLS, VOUCHERS AND OTHER EVIDENCES. THE ASSESSEE FILED T HE EVIDENCES BEFORE THE AO WHICH DID NOT FIND FAVOUR WITH THE AO AND FINALLY HE TREATED THE ENTIRE PURCHASES AS BOGUS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIR ECTED THE AO TO APPLY A GP OF 12.5% BY FOLLOWING THE HONBLE GUJ ARAT HIGH COURT DECISION IN THE CASE OF CIT VS. SIMIT P. SHET H (2013) 356 ITR 451 (GUJ) AND THUS PARTLY ALLOWED THE APPEAL. AND NOW THE REVENUE AGGRIEVED BY THE LD. CIT(A)S ORDER IS IN A PPEAL BEFORE US. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE UNDOUBTEDLY, T HE ASSESSEE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES FROM FOUR PA RTIES AGGREGATING TO RS.8,03,416/-. THE ASSESSEE HAS FUR NISHED BILLS, VOUCHERS AND PAYMENT DETAILS BEFORE THE AO IN SUPPO RT OF THE PURCHASES. THE NOTICES ISSUED UNDER SECTION 133(6) TO THE SUPPLIER WERE NOT SERVED UPON THE PARTIES AND RETUR NED WITH THE REMARK LEFT. WE NOTE THAT THE ASSESSEE FILED DEL IVERY CHALLANS, TRANSPORT DETAILS ALONG WITH BANK STATEMENT AND TRI ED TO PROVE ITA NO.1434/M/2019 M/S. INKA ENGINEERS 3 THE PURCHASES. HOWEVER, AO DID NOT ACCEPT THE SAME AND MADE 100% ADDITION. IN THE APPELLATE PROCEEDINGS, THE L D. CIT(A) REDUCED THE ADDITION TO 12.5% BY FOLLOWING THE DECI SION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. S IMIT P. SHETH (SUPRA) WHEREIN THE HIGH COURT HAS HELD THAT IT WOU LD BE REASONABLE, IF THE PROFIT MARGIN ON THE BOGUS PURCH ASES ARE BROUGHT TO TAX AND DIRECTED AT 12.5% OF THE BOGUS P URCHASES. WE HAVE EXAMINED IN DEPTH THE RECORDS AS PLACED BEF ORE US AND THE ORDER OF LD. CIT(A) AND FOUND THAT THE ORDER PA SSED BY LD. CIT(A) IS QUITE REASONED AND SPEAKING ONE AND DOES NOT NEED TO BE INTERFERED WITH. ACCORDINGLY, WE ARE INCLINED T O UPHOLD THE SAME BY DISMISSING THE APPEAL OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 27.05.2020. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 27.05.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.