Smt. Ramibai Harish Rohida, Kolhapur V. Income-tax Officer, Ward - 1 (1), Kolhapur

ITA 1737/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4179 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-02-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.1737/PUN/2019 / ASSESSMENT YEAR : 2009-10 RAMIBAI HARISH ROHIDA, PROP. SUSHIL PACKAGING INDUSTRIES, 1916, C WARD, LAXMI ROAD, KOLHAPUR PAN : AAXPR5194F VS. ITO, WARD-1(1), KOLHAPUR APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DA TED 05-08-2019 PASSED BY THE COMMISSIONER OF INCOME-TAX (AP PEALS)- 1, KOLHAPUR IN RELATION TO THE ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED IN THIS APPEAL THROUGH VARIOUS GR OUNDS IS AGAINST THE CONFIRMATION OF ADDITION OF RS.2,62,080/- MADE ON ACCOUNT OF BOGUS PURCHASES AT 100% OF THE AMOUNT OF PUR CHASES. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF PLASTIC BAGS/ROLLS UNDER THE NAME AND STYLE SUSHIL PACKAGING INDUSTRIE S. ASSESSEE BY SHRI M.K. KULKARNI REVENUE BY SHRI B.Y. CHAVAN DATE OF HEARING 29-10-2020 DATE OF PRONOUNCEMENT 29-10-2020 ITA NO.1737/PUN/2019 RAMIBAI HARISH ROHIDA 2 HE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.91,51,708/-. NOTICE U/S.148 OF THE ACT WAS ISSUED ON 20-06-2013 BY THE ASSESSING OFFICER (AO) ON RECEIVING INFORMATION ABOUT THE ASSESSEE HAVING RECEIVED BOGUS BILLS WITH OUT EFFECTING DELIVERY OF GOODS. ASSESSEE MADE PURCHASES F ROM M/S. SARVESH ENTERPRISES, PROP. MEENAKSHI RHISHIKESH LADDA, SA NGLI TO THE TUNE OF RS.2,62,080/- WHICH IS FOUND TO BE ONE OF THE HAWALA DEALERS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSE E WAS ASKED TO PRODUCE VARIOUS DETAILS IN RELATION TO THE PURCHASES MADE FROM M/S. SARVESH ENTERPRISES. IN THE ABSENCE OF FURNIS HING OF DETAILS FROM THE ASSESSEES END, THE AO MADE ADDITION @100% OF PURCHASES, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 4. I HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GO NE THROUGH THE RELEVANT MATERIAL ON RECORD. THE ISSUE OF BOG US PURCHASES HAS COME UP FOR CONSIDERATION BEFORE THE HO NBLE BOMBAY HIGH COURT IN PR. CIT & ORS. VS. MOHAMMAD HAJI ADAM & CO. & ORS. (2019) 104 CCH 0391 MUMHC. THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD IN THIS CASE THAT NO AD HOC ADDITION OF BOGUS PURCHASES IS WARRANTED. RATHER THE ADDITIO N SHOULD BE MADE TO THE EXTENT OF DIFFERENCE BETWEEN THE GRO SS PROFIT ITA NO.1737/PUN/2019 RAMIBAI HARISH ROHIDA 3 RATE ON GENUINE PURCHASES AND GROSS PROFIT RATE OF HAWALA PURCHASES. 5. THERE IS NO DISPUTE THAT THE ASSESSEE HAD PROPERLY ACCOUNTED FOR THE PURCHASES SO MADE AGAINST HAWALA TRANSACTIONS. IN OTHER WORDS, THE ACTUAL PURCHASES MADE AGAINST THE HAWALA PURCHA SES HAVE BEEN EITHER CONSUMED OR AVAILABLE IN THE CLOSING STOCK. IN THIS HUE, THERE CANNOT BE ANY QUESTION OF MAKING ADDITION AT 100% OF THE PURCHASES. THE QUANTUM OF ADDITION TOWARDS BOGUS PURCHASES, BEING THE EXCESS AMOUNT OF PURCHASES DEBITED BY THE ASSESSEE TO THE TRADING ACCOUNT FOR AVAILING TAX BENEFIT, NE EDS TO BE WORKED OUT BY CONSIDERING SIMILAR PURCHASES MADE BY THE ASSESSEE THROUGH GENUINE TRANSACTIONS AND THEREAFTER FIND OUT THE EX CESS AMOUNT OF PURCHASES RECORDED THROUGH HAWALA TRANSACTIONS. THE DIFFERENTIAL PERCENTAGE BETWEEN THE TWO PRICES IS DIRECTED TO BE APPLIED TO THE AMOUNT OF HAWALA PURCHASES FOR MAKING ADDITION ON THIS SCORE. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER A ND REMIT THE MATTER TO THE FILE OF THE AO FOR WORKING OUT THE CORRECT AMOU NT OF ADDITION IN TERMS OF ABOVE OBSERVATIONS AFTER ALLOWING A REASO NABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.1737/PUN/2019 RAMIBAI HARISH ROHIDA 4 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2020. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 29 TH OCTOBER, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-1, KOLHAPUR 4. THE PR. CIT-1, KOLHAPUR 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1737/PUN/2019 RAMIBAI HARISH ROHIDA 5 DATE 1. DRAFT DICTATED ON 29-10-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29-10-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *