ASST CIT CIR 2, THANE V. KISHOR B SHAH(HUF), THANE

ITA 1764/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9878 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Keywords: Bogus purchase; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO . 1764 /MUM. /2017 ( ASSESSMENT YEAR : 2010 11 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 2, THANE . APPELLANT V/S KISHORE B. SHAH (HUF) PROP. BALAJI CONSTRUCTION 403, RIDDHI SIDDHI TOWER 60, FT. ROAD, BHAYANDER (W) THANE 401 101 PAN AAGHK9718C . RESPONDENT ASSESSE E BY : SHRI VIPUL JOSH I REVENUE BY : SHR I PURSHOTTAM KUMAR DATE OF HEARING 24.08.2017 DATE OF ORDER 06.09.2017 O R D E R PER SAKTIJIT DEY, J.M. A FORESAID APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 2 8 TH DECEMBER 201 6 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 2 , NASHIK , PERTAINING TO ASSESSMENT YEAR 20 10 11 . 2 . REVENUE HAS FILED THE PRESENT APPEAL BEING AGGRIEVED WITH THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE ADDITION TO 10% OF THE BOGUS PURCHASES. 2 KISHORE B. SHAH (HUF) 3 . BRIEF FACTS ARE, THE ASSESSEE A HUF IS C ARRYING ON BUSINESS OF CIVIL CONTRACTOR THROUGH ITS PROPRIETORSHIP CONCERN BALAJI CONSTRUCTION. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF ` 60,16,180. DURING THE ASSESSMENT PROCEEDINGS, THE ASS ESSING OFFICER ON VERIFYING THE PURCHASE S MADE BY THE ASSESSEE FOUND THAT PURCHASES AMOUNTING TO ` 57,32,017, FROM FIVE PARTIES ARE NOT GENUINE AS THOSE PARTIES ARE ONLY PROVIDING ACCOMMODATION BILLS. THEREFORE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE CONCERNED PARTIES SHOULD NOT BE DISALLOWED AND ADDED BACK AS INCOME. AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEE WITHOUT FURNISHING ANY SUPPORTING EVIDENCE TO PROVE THE GENUINE NESS OF THE PURCHASES SIMPLY STATED THAT THE GOODS WERE PURCHASED AND USED IN THE CONSTRUCTION WORK. THE ASSESSING OFFICER REJECTING THE SUBMISSION S OF THE ASSESSEE ADDED BACK THE AMOUNT OF ` 57,34,017. BEING AGGRIEVED OF THE ADDITION, ASSESSEE PREFERRED A PPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS). 4 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , THOUGH , WAS OF THE VIEW THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE PURCHASES FULLY, HOWEVER, HE HELD T HAT THE ENTIRE PURCHASES CANNOT BE TREATED AS INCOME OF THE ASSESSEE CONSIDERING THE FACT THAT THE CORRESPONDING 3 KISHORE B. SHAH (HUF) SALES MADE BY THE ASSESSEE HAS NOT BEEN DISPUTED. ACCORDINGLY, HE RESTRICTED THE DISALLOWANCE TO 10% OF THE ALLEGED BOGUS PURCHASES. 5 . WE HAVE H EARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EVIDENT, MERELY ON THE BASIS OF INFORMATION AVAILABLE ON RECORD THAT CERTAIN PURCHASES MADE BY THE ASSESSEE ARE NOT GENUINE, THE ASSESSING OFFICER HAS ADDED THE AMOUNT OF ` 57,34,01 7. HOWEVER, AS COULD BE SEEN FROM THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS FURNISHED QUANTITATIVE TALLY OF PURCHASE AND SALES WHICH HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. IN THE AFORESAID CIRCUMSTANCES, WE ARE IN AGREEMENT WITH THE LEARNED COMMISSIONER (APPEALS) THAT ENTIRE PURCHASES CANNOT BE DISALLOWED AND TREATED AS INCOME OF THE ASSESSEE , BUT , ONLY THE PROFIT ELEMENT EMBEDDED THEREIN CAN BE CONSIDERED FOR ADDITION. IN THE PECULIAR FACTS OF THE PRESENT CASE, WE ARE OF TH E VIEW THAT 10% OF DISALLOWANCE OUT OF BOGUS PURCHASES MADE BY THE LEARNED COMMISSIONER (A PPEALS) IS REASONABLE, HENCE, DESERVES TO BE UPHELD. GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.09.2017 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 06.09.2017 4 KISHORE B. SHAH (HUF) COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI .