Income-tax Officer, Ward - 1, Jalna V. Rochandas Kimatram Kawarani, Jalna

ITA 1871/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1761 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K KULKARI
• Assessee Lawyers: RAJESH GAWLI
• Keywords: Bogus purchase; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.1871/PUN/2018 / ASSESSMENT YEAR : 2010-11 ITO, WARD-1, JALNA VS. SHRI ROCHANDAS KIMATRAM KAWARANI, 2-3-79, BADA SAAB, SUBHASH ROAD, NEAR MOTI MASJIT, JALNA PAN : ABGPK0538G (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-1, AURANGABAD ON 05-09-2018 IN RELATION TO THE ASSESSMENT YEAR 2010-11. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT SOME INFORMATION WAS RECEIVED FROM SALES TAX DEPARTMENT WHICH UNEARTHED RACKET OF HAWALA DEALERS WHO ISSUED FAKE PURCH ASE APPELLANT BY SHRI RAJESH GAWLI RESPONDENT BY SHRI M.K. KULKARNI DATE OF HEARING 20-03-2019 DATE OF PRONOUNCEMENT 20-03-2019 ITA NO.1871/PUN/2018 SHRI ROCHANDAS KIMATRAM KAWARANI 2 BILLS TO VARIOUS TRADERS. ON VERIFICATION OF SUCH INFORMATION, IT WAS FOUND THAT THE ASSESSEE WAS ONE OF THE BENEFICIARIES WHO HAD TAKEN FAKE PURCHASES. SUCH AMOUNT OF PURCHASES AT RS.40,688/- WAS ADDED BY THE ASSESSING OFFICER. THE LD . CIT(A) RESTRICTED THE ADDITION TO 10% OF THE HAWALA BILLS, AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 3. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE R ELEVANT MATERIAL ON RECORD. IT IS SEEN THAT ASSESSEE HAD OBTAINED BOGUS PURCHASES FROM HAWALA PARTIES. THE PUNE BENCHES OF THE TRIBUNAL HAS DISPOSED OFF A GROUP OF SIMILAR CASES. VID E THE LEAD ORDER IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. AN D OTHERS VS. DCIT DATED 28-04-2017 IN ITA NO.795/PUN/2014 AND OTHERS, THE TRIBUNAL HAS MADE CERTAIN CATEGORIES. FINDING IN RESPECT OF CATEGORY NO. IV OF THE SAID ORDER, WHICH IS GERMANE TO THE INSTANT APPEAL, IS AS UNDER : IV. THE NEXT INSTANCE IS THE CASE OF GOODS WHICH H AVE BEEN ADMITTEDLY SOLD BY THE HAWALA DEALER AND HAS BEEN RECE IVED BY THE ASSESSEE, WHO IN TURN HAD MAINTAINED QUANTITATI VE DETAILS AND ALSO EVIDENCE OF ITS MOVEMENT I.E. TRANSPORT ATION DETAILS AND QUALITY CONTROL DETAILS OF CONSUMPTION OF T HE SAID MATERIAL OR EXACT DETAILS OF SALE OF THE SAME CONSIGNME NT THROUGH SAME TRANSPORTER DIRECTLY TO THE PARTY, THEN THE TOTAL PURCHASES CANNOT BE ADDED IN THE HANDS OF ASSESSEE. HOWEVER, SINCE THE PURCHASES ARE MADE FROM THE GREY MARKET, SOME ESTIMATION NEEDS TO BE MADE IN THE HANDS OF ASS ESSEE. THE TRIBUNAL IN M/S. CHETAN ENTERPRISES VS. ACIT (SUPRA) HAS ITA NO.1871/PUN/2018 SHRI ROCHANDAS KIMATRAM KAWARANI 3 ALREADY HELD THAT THE ADDITION BE MADE BY ESTIMATING TH E SAME @ 10% OF THE ALLEGED HAWALA PURCHASES, OVER AND AB OVE THE GP SHOWN BY THE RESPECTIVE ASSESSEE. 4. GOING BY THE RATIO LAID DOWN IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. AND OTHERS (SUPRA), WHICH HAS BEEN FOLLOWED IN INNUMERABLE CASES, I HOLD THAT THE ADDITION SHOULD HAVE BEEN SUSTAINED ON THE AMOUNT OF HAWALA PURCHASES @10% PLUS THE NORMAL GP RATE SHOWN BY THE ASSESSEE FOR THE YEAR. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR RE-COMPUTING THE AMOUNT OF ADDITION @10% PLUS THE NORMAL GROSS PROFIT RATE SHOWN BY THE ASSESSEE FOR THIS YEAR ON THE BOGUS PURCHASES, AS AGAIN ST 10% SUSTAINED BY THE LD. FIRST APPELLATE AUTHORITY. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2019. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 20 TH MARCH, 2019 ITA NO.1871/PUN/2018 SHRI ROCHANDAS KIMATRAM KAWARANI 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-1, AURANGABAD 4. THE PR. CIT-1, AURANGABAD 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 20-03-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 20-03-2019 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. *