STULZ CHSPL (INDIA) P.LTD, MUMBAI V. DCIT 7(2), MUMBAI

ITA 1514/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0871 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2015
• Court: TRIBUNAL
• Department Lawyers: VISHWAS MUNDHE
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1514/M/2015 (AY 2009 - 2010) ITA NO.1515/M/2015 (AY 2010 - 2011) STULZ CHSPL (INDIA) PVT LTD., 006, JAGRUTI INDUSTRIAL ESTATE, MOGUL LANE, MAHIM, MUMBAI 400 016. / VS. DY. COMMISSIONER OF INCOME TAX - 7(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCC5320P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BHUPENDRA SHAH / RESPONDENT BY : SHRI VISHWAS MUNDHE, DR / DATE OF HEARING : 19.04.2017 / DATE OF PRONOUNCEMENT : 26 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION FOR AYS 2009 - 2010 AND 2010 - 2011 AGAINST TWO DIFFERENT ORDERS OF THE CIT (A). THE ISSUE RAISED IN BOTH THE APPEALS IS COMMON AND IT RELATES TO BOGUS PURCHASES AND ITS TAXATION. 2. AT THE OUTSET, LD AR FOR THE ASSESSEE SUBMITTED THAT THE AO MADE ENTIRE BOGUS PURCHASES AS ADDITION. IT INVOLVES THREE SUPPLIERS IN THE CASE OF AY 2009 - 2010 AMOUNTING TO RS. 11,76,576/ - AND RS. 13,77,869/ - FOR AY 2010 - 2011. FURTHER, ON APPEAL, FAA CONFIRMED THE ENTIRE ADDITION IN BOTH THE AYS. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL FOR BOTH THE YEARS. ASSESSEE ALSO RAISED THE LEGAL ISSUE RELATING TO THE VALIDITY OF THE REASSESSMENT PROCEEDINGS FOR AY 200 9 - 2010 ONLY. 3. DEVIATING FROM THE GROUNDS IN BOTH THE APPEALS, LD AR FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WILL BE CONTENT IF A DIRECTION IS GIVEN TO THE AO SETTING ASIDE THE ORDER OF THE CIT (A) IN BOTH THE AYS TO RESTRICT THE ADDITION TO 12.5% OF THE BOGUS PURCHASES AS BEING CONSISTENTLY DONE BY THE TRIBUNAL. 2 4. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED PRECEDENTS AND THE RELEVANT MATERIAL PLACED BEFORE US, WE APPROVE THE ABOVE ARGUMENT OF THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO RECOMPUTED THE ADDITION RELYING ON THE BOMBAY HIGH COURT JUDGMENT IN THE CASE OF NIKUNJ EXIMP ENTERPRIES P LTD (372 ITR 619) (BOM) AND GUJRATH HIGH COURT JUDGMENT IN THE CASE OF CIT VS. SIMIT P SHETH [201 3] (356 ITR 451) (GUJ.). 5. FURTHER, LD AR SUBMITTED F U R T H E R REDUCTION FROM THE SAID 12.5% TO THE EXTENT OF THE VAT PAID BY THE ASSESSEE SECOND TIME. IN OUR OPINION, THE ASSESSEE SHOULD NOT BE PUT TO LOSS ON THIS ACCOUNT. AO IS DIRECTED TO DO THE NEEDFUL. IN THIS REGARD, WE DIRECT THE AO TO EXAMINE THE CLAIM AND DECIDE THIS PART OF THE SUBMISSION AFRESH AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY WE DECIDE. THUS, THE GROUN DS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE PARTLY ALLOWED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUN CE D IN THE OPEN COURT ON 2 6 T H APRIL, 2017. S D / - S D / - ( RAM LAL NEGI) (D. KARU NAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 26.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// 3 / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI