JABARSINGH B. DAIYA, MUMBAI V. ITO 19(2)(1), MUMBAI

ITA 1864/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9707 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 1864 /MUM/ 2017 (ASSESSMENT YEAR 20 11 - 12 ) SHRI JABARSINGH B. DAIYA ROOM NO. 16, 1 ST FLOOR MULJI MADHAVJI BUILDING 160, C.P. TANK ROAD MUMBAI - 400 004. PAN AHY PD4454E VS. ITO 19(2)(1) ROOM NO. 218 MATRU MANDIR 2 ND FLOOR TARDEO ROAD MUMBAI - 400007 ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI NEELKANTH KHANDELWAL DEPARTMENT BY SHRI S.K. BEPARI DATE OF HEARING 1 2 .9. 201 7 DATE OF PRONOUNCEMENT 12 . 9 . 201 7 O R D E R THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 20.01.2017 PASSED BY LD CIT(A) - 29, MUMBAI IN CONFIRMING THE ADDITION RELATING TO ALLEGED BOGUS PURCHASES MADE IN AY 2011 - 12. 2. I HEARD THE PARTIES AND PERUSED THE RECOR D. THE ASSESSEE IS A TRADER IN FERROUS AND NON - FERROUS METALS. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, IT CAME TO THE NOTICE OF THE REVENUE THAT THE ASSESSEE HAS MADE PURCHASES TO THE TUNE OF RS.2,04,01,2712/ - DURING THE YEA R UNDER CONSIDERATION FROM THE PARTIES, WHO WERE LISTED OUT BY THE SALES TAX DEPARTMENT AS HAWALA DEALERS, I.E., THEY HAVE PROVIDED ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL. THE AO NOTICED THAT THE ASSESSEE HAS MAINTAINED STOCK REG ISTER AND ACCORDINGLY CAME TO THE CONCLUSION THAT THE ASSESSEE HAS PURCHASED GOODS FROM OPEN MARKETS, BUT OBTAINED BILLS FROM THE HAWALA DEALERS. ACCORDINGLY HE TOOK THE VIEW THAT THE ASSESSEE WOULD HAVE MADE PROFIT IN THE PURCHASE TRANSACTIONS AND THE AO ESTIMATED THE PROFIT SHRI JABARSINGH B. DAIYA 2 ELEMENT AT 12.50% OF THE VALUE OF PURCHASES. ACCORDINGLY THE AO ADDED A SUM OF RS.25.50 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. THE LD CIT(A) SUSTAINED THE RATE OF 12.50%, BUT THE DIRECTED THE AO TO REDUCE THE GP ALREADY DECLARED BY THE ASSESSEE ON THE IMPUGNED PURCHASES. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. 3. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE AO HAD MADE IDENTICAL ADDITION IN AY 2009 - 10. WHEN THE MATTER TRAVELLED TO THE ITAT, THE DIVISION BENCH OF THE TRIBUNAL, VIDE ITS ORDER DATED 05.5.2017 PASSED IN ITA NO.4917/MUM/2016, RESTRICTED THE ADDITION TO 2% OF THE VALUE OF ALLEGED BOGUS PURCHASES. 4. I HEARD LD D.R AND PERUSED THE ORDER PASSED BY THE DIVISION BENCH IN THE ASSESSEES OWN CASE FOR AY 2009 - 10. SINCE THE FACTS ARE IDENTICAL, CONSISTENT WITH THE VIEW TAKEN THEREIN, I MODIFY THE ORDER PASSED BY LD CIT(A) AND DIRECT THE AO TO RESTRICT THE ADDITION TO 2% OF THE VALUE OF ALLEGED BOGUS PURCHASES. 5. IN THE RESULT, THE APPEAL FILE D BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 12 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 12 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI SHRI JABARSINGH B. DAIYA 3 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI