Prashant Sharadchandra Pande, Pune V. Income-tax Officer,

ITA 1564/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2506 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-08-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 18-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK BABU
• Keywords: Bogus purchase
• Section: 143(3); 10; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO S . 1 5 62 TO 1564 /P U N/201 6 / ASSESSMENT YEAR S : 20 0 9 - 1 0 TO 2011 - 12 PRASHANT S PANDE, FLAT NO.20, SITA RAMA PARK, 408, SOMWAR PETH, PUNE 4110 11 . / APPELLANT PAN: A GZPP5955G VS. THE INCOME TAX OFFICER , WAR D 2, MALEGAON . / RESPONDENT . / ITA NO S . 1 650 & 1651 /P U N/201 6 / ASSESSMENT YEAR S : 20 1 0 - 11 & 2011 - 12 THE INCOME TAX OFFICER, WARD 2, MALEGAON . / APPELLANT VS. PRASHANT S PANDE, FLAT NO.20 , SITA RAMA PARK, 408, SOMWAR PETH, PUNE 411011 . / RESPONDENT PAN: AGZPP5955G ASSESSEE BY : SHRI BHARAT SHAH REVENUE BY : SHRI ASHOK BABU, JCIT / DATE OF HEARING : 0 9 . 0 8 .201 8 / DATE OF PRONOUNCEMENT: 23 . 0 8 .201 8 ITA NO S . 1 5 62 TO 15 64 /P U N/20 1 6 ITA NOS.1650 & 1651/PUN/2016 SHRI PRASHANT S PANDE 2 / ORDER PER SUSHMA CHOWLA, J M : OUT OF T H IS BUNCH OF FIVE APPEAL S , TWO CROSS APPEALS F ILED BY ASSESSEE AND REVENUE ARE AGAINST CONSOLIDATED ORDER OF CIT (A) - 1 , NASHIK , DATED 19 . 0 5 .20 1 6 RELATING TO ASSESSMENT YEAR S 2010 - 11 & 2011 - 12 AGAINST RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . THE ASSESSEE ALSO FILED AN APPEAL AGAINST ORDER OF CIT (A) - 1, NASHIK, DATED 19 . 05 .201 6 RELATING TO ASSESSMENT YEAR 2009 - 10 AGAIN ST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. 2. THIS BUNCH OF APPEALS RELATING TO SAME ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, IN ORDER TO ADJ UDICATE THE ISSUE, WE MAKE REFERENCE TO THE FACTS IN ITA NO.1562/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10. 3. THE ASSESSEE IN ITA NO.1562/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10 HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 1) THE HON. CIT APPEAL S HAS ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN TREATING THE GENUINE PURCHASES AS INFLATED PURCHASES THEREBY SUSTAINING AN ADDITION TO THE EXTENT OF 25% ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE ADDITION SUSTAINED BY HON. CIT APPEALS BE DELETED AND JUST AND PROPER RELIEF BE GRANTED TO THE ASSESSEE IN THIS RESPECT. 4 . THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION MADE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. ITA NO S . 1 5 62 TO 15 64 /P U N/20 1 6 ITA NOS.1650 & 1651/PUN/2016 SHRI PRASHANT S PANDE 3 5 . BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THAT THE ASSESSEE WAS THE RECIPIENT FROM HAWALA TRANSACTION PARTIES OF 10 , 60 , 886 / - . THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS PRODUCED COPIES OF AUDIT REPORT ALONG WITH PROFIT AND LOSS ACCOUNT, BALANCE SHEET, LEDGER EXTRACT OF RAW MATERIAL CONSUMED, LEDGER OF PACK ING CHARGES, LEDGER OF LOADING & UNLOADING CHARGES ( PURCHASE S) AND ALSO EXPLAINED THAT THE PURCHASES WERE GENUINE. HOWEVER, THE ASSESSING OFFICER MADE ADDITION OF 10 , 60 , 886 / - ON ACCOUNT OF PURCHASES MADE FROM PUSHPA HARI, TARA ENTERPRISES AND RAMANI STE EL . 6 . THE CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 25% , AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 7 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD MAINTAINED COMPLETE DETAILS WHICH WERE FILED BE FORE THE ASSESSING OFFICER. 8 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRONGLY PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING T HE YEAR UNDER CONSIDERATION HAS MADE LIMITED TRANSACTIONS. IN RESPECT OF PURCHASES FROM ALLEGED HAWALA PARTIES PUSHPA HARI, TARA ENTERPRISES AND RAMANI STEEL , T HE ASSESSEE HAD ALSO TRIED TO ESTABLISH THE TRAIL OF GOODS ALONG WITH COPIES OF PURCHASE BILL S. ITA NO S . 1 5 62 TO 15 64 /P U N/20 1 6 ITA NOS.1650 & 1651/PUN/2016 SHRI PRASHANT S PANDE 4 10 . WE FIND THAT SIMILAR ISSUE OF BOGUS PURCHASES HAS BEEN DECIDED BY US IN SERIES OF DECISIONS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN BUNCH OF APPEALS WITH L EAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 28.04.2017 AND POINTED OUT THAT AT BEST 10% OF GP RATE MAY BE APPLIED ON ALLEGED BOGUS PURCHASES. WE FIND THAT WHERE THE ASSES SEE HAS ESTABLISHED THE TRAIL OF GOODS, THEN THE CASE OF ASSESSEE SO FAR AS PURCHASE OF GOODS STANDS ESTABLISHED. HOWEVER, IN ORDER TO BLOCK ANY LEAKAGE OF GROSS PROFIT, WHERE THE GOODS MAY HAVE BEEN PURCHASED FROM OPEN MARKET, WE DIRECT THE ASSESSING OFF ICER TO MAKE ADDITION IN THE HANDS OF ASSESSEE BY ADOPTING GP RATE AT 10% OF BOGUS PURCHASES OVER AND ABOVE GP RATE DECLARED BY THE ASSESSEE. HENCE, THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 11. NOW, COMING TO THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE RELATING TO ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 . 12. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN RESTRICTING THE ADDITION TO THE EXTENT OF 25%, WHEREAS THE REVENUE IS AGGRIEVED BY THE SAID DECISION OF CIT(A) AND SUPPORTS THE ORDER OF ASSESSING OFFICER IN MAKING ADDITION AT 100% OF PURCHASES MADE FROM ALLEGED HAWALA PARTIES. THE ISSUE RAISED IN THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE FOR ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 IS SIMILAR TO THE ISSUE RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2009 - 10. FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO MAKE ADDITION IN THE HANDS OF ASSESSEE BY ADOPTING GP RATE AT 10% OF BOGUS PURCHASES OVER AND ABOVE GP RATE DECLARED BY THE ITA NO S . 1 5 62 TO 15 64 /P U N/20 1 6 ITA NOS.1650 & 1651/PUN/2016 SHRI PRASHANT S PANDE 5 ASSES SEE. HENCE, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE PARTLY ALLOWED AND THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 1 3 . IN THE RESULT, APPEALS OF ASSESSEE ARE PARTLY ALLOWED AND APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF AUGUST , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD AUGUST , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE AP PELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , NASHIK ; 4. THE PR. CIT - 1 , NASHIK ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE