R.S.CASTOR TRADING PRIVATE LIMITED, Mumbai V. INCOME TAX OFFICER-2(2), Thane

ITA 1602/MUM/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0366 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 12-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 1602 / MUM/20 18 & 1603/MUM/2018 ( ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 ) M/S. R.S.CASTOR TRADING PVT. LTD., 306, B - WING, MAHAVIR NAGAR - 2 JAI AMBE MATA ROAD BHAYANDER 401 105 VS. ITO 2(2), WAGLE INDUSTRIAL ESTATE THANE 400 604 PAN/GIR NO. AACCR9048N ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI AJAY SINGH REVENUE BY SHRI CHAITANYA ANJARIA DATE OF HEARING 10 / 09 /201 8 DATE O F PRONOUNCEMENT 12 / 09 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 31/01/2018 FOR THE A.Y.2010 - 11 & 2011 - 12 IN THE MATTER OF ORDER PASSED U/S.143(3) R. W.S. 147 OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. IN BOTH THESE APPEALS, ASSESSEE IS AGGRIEVED FOR UPHOLDING ADDITION OF 12.5% IN RESPECT OF ALLEGED BOGUS PURCHASES. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUS E D. 5. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT IN THESE CASES THE RETURNS OF INCOME, DECLARING TOTAL INCOME OF RS 2,94,2007 - (A.Y. 2010 - 11) ITA NO. 1602/MUM/2018 & 1603/MUM/2018 M.S. R.S.CASTOR TRADING PVT. LTD., 2 & RS. 64,920 / - (A. Y. 11 - 12), WERE FILED ON 2.10.2010 & 19.9.2011, RESPECTIVELY. THE ASSESSEE IS A PVT. LTD. COMP ANY, ENGAGED IN THE BUSINESS OF TRADING IN CASTOR OIL & ITS PR ODUCTS. THE ASSESSMENT ORDERS U/ S 143(3) R.W.S 147 OF THE ACT, FOR BOTH THESE YEARS I.E. A.Y. 2010 - 11 & 2011 - 12, WERE FINALIZED ON 31.03.2016, AT TOTAL INCOME OF RS. 78,44,820 / - & RS. 38,97,850 / - , AFTER MAKING THE ADDITIONS OF RS. 75,50,187 - & RS . 38,32,926 / - , RESPECTIVELY, ON ACCOUNT OF BOGUS PURCHASES. AGGRIEVED WITH THE ORDERS OF THE AO, THE A SSESSEE PREFERRED APPEALS BEFORE CIT(A). 6. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTI ON OF THE AO AFTER FOLLOWING THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH. 7. IT WAS ARGUED BY LEARNED AR THAT ASSESSEE IS DEALING IN TRADING OF CASTER OIL. THE GP RATE SHOWN DURING THE ASSESSMENT YEAR 2008 - 09 WAS 1.84% WHEREAS IN 2011 - 1 2, 2.77%. IT WAS FURTHER CONTENDED BY LEARNED AR THAT NEITHER AO NOR THE CIT(A) HAS PROVIDED COPY OF STATEMENT RECORDED OF THE CONCERNED PERSONS NOR GIVEN OPPORTUNITY O F CROSS EXAMINATION. OUR ATTENTION WAS ALSO INVITED TO THE QUANTITATIVE STATEMENT FILED WITH RESPECT TO THE GOODS PURCHASED AND SOLD, WHEREIN NO FAULT WAS FOUND BY AO NOR BY CIT(A). HE FURTHER CONTENDED THAT THE FACTS IN THE CASE OF SIMIT P SHETH WERE QUITE DISTINGUISHABLE FROM THE FACTS OF THE ASSESSEES CASE. 8. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. ITA NO. 1602/MUM/2018 & 1603/MUM/2018 M.S. R.S.CASTOR TRADING PVT. LTD., 3 9. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIV E ORDERS AS WELL AS CITED BY LEARNED AR AND DR DURING THE COURSE OF HEARING BEFORE US. 10. FROM THE RECORD WE FOUND THAT THE AO FINALIZED THE ASSESSMENT ORDERS U/S.143(3) R.W.S. 147 OF THE ACT, ON 31.3.2016, FOR BOTH THE YEARS, BY DISALLOWING 12.5% OF THE PURCHASES FROM ABOVE REFERRED PARTY, BEING INFLATED AND ADDED RS.75,50,618/ - & RS.38,32,926/ - RESPECTIVELY. THE CIT(A) CONFIRMED THE ACTION OF THE AO MERELY BY RELYING ON THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH, WHERE THE FACTS ARE DISTINGUISHABLE. CONSIDERING THE FACT THAT QUANTATIVE STATEMENT FILED BY THE ASSESSEE HAS NOT BEEN REJECTED AND THE RATE OF GROSS PROFIT DECLARED BY THE ASSESSEE IN RESPECTIVE YEARS WE DEEM IT APPROPRIATE TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF 3 % IN THE A.Y.2010 - 11 AND 2% IN THE A.Y.2011 - 12. WE DIRECT ACCORDINGLY. 11. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 09 /201 8 SD/ - ( RAM LAL NEGI ) SD/ - (R.C.SH ARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 09 /201 8 KARUNA SR. PS ITA NO. 1602/MUM/2018 & 1603/MUM/2018 M.S. R.S.CASTOR TRADING PVT. LTD., 4 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT , MUMBAI 6. GUARD FILE. //TRUE COPY//