ITO-27(2)(1), Mumbai V. SHRI. KAMAL RAMESH BHAI DOSHI , Mumbai

ITA 1937/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8194 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Corroborative evidences
• Section: 13

Judgement Text

ITA NO.1937/MUM/2019 ASSESSMENT Y EAR: 2011 - 12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC - I BENCH, MUMBAI [CORAM: PRAMOD KUMAR (VICE PRESIDENT)] ITA NO. 1937 /MUM/2019 ASSESSMENT YEAR: 2011 - 12 INCOME TAX OFFICER 27 (2)(1 ) .APPELLANT MUMBAI VS SHRI KAMAL RAMESH BHAI DOSHI ..........RESPONDENT 15 PLATINUM NEAR BMC OFFICE, JAWAHAR ROAD OPP GHATKOPAR STATION, CHATKOPAR EAST, MUMBAI 400 077 [PAN: AAB PD5831H ] APPEARANCES BY SAMATHA MULLAMUDI FOR THE APPELLANT NONE FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 10 TH , 2020 DATE OF PRONOUNCEMENT : JULY 13 TH , 2020 ORDER PER PRAMOD KUMAR, VP: BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 7 TH JANUARY 2019, PASSED BY THE LEARNED CIT(A) - 26 , MU MBAI FOR THE ASSESSMENT YEAR 2011 - 12 . 2. GRIEVANCES RAISED BY THE ASSESSING OFFICER ARE AS FOLLOWS: 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE THE LD. CIT (A) ERRED IN DIRECTING THE AO TO RESTRICT THE ADDITION TO 6% OF RS. 1,01,72,5 53/ - AS AGAINST ADDITION @12.5% OF RS. 1,01,72,553/ - MADE BY THE ASSESSING OFFICER ACCOUNT OF BOGUS PURCHASES, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS TO ESTABLISH THE GENUINES OF THE TRANSACTIONS AND ALSO FAILED TO FURNISHCORROBORATIVE EVIDENCES IN SUPPORT OF THE CLAIM. ITA NO.1937/MUM/2019 ASSESSMENT Y EAR: 2011 - 12 PAGE 2 OF 3 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ESTIMATING THE PROFIT FROM HAWAL A PURCHASES BY DISALLOWING ONLY RS. 6,10,353/ - BEING 6% OF THE BOGUS P URCHASES AS EVEN THE BASIC ONUS OF PRODUCING DELIVERY CHALLANS, TRANSPORT ATION DETAILS ETC WERE NOT FULL FILLED BY THE ASSESSEE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BEREVERSED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE , BUT WE HAVE HEARD THE LD. DR AND DULY CONSIDERED THE FACTS AVAILABLE ON RECORD IN LIGHT OF THE APPLICABLE POSITION. 4. EVEN T HOUGH THE ISSUES RAISED IN THIS APPEAL ARE ADMITTEDLY COVERED BY THE DECISION OF COORDINATE BENCH DATED 13 TH APRIL 2018 , IN ASSESSEES OWN CASES IN ITA NO. 3378/M UM /2015 AND ITA NO. 3601/MUM/2015 FOR THE ASSESSMENT YEAR 2010 - 11. WE HOWEVER SEE NO REASONS TO TAKE ANY VIEW OF THE MATTER T HEN THE VIEW TAKEN BY THE COORDINATE BENCH IN THE AFORESAID DECISION WHEREIN THE COORDINATE BENCH HAS INTER ALIA OBSERVED AS FOLLOWS: - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE IS UNDOUBTE DLY A BENEFICIARY OF BOGUS PURCHASES AS HAS BEEN OBSERVED BY AO AND LD. CIT(A). THE UNDISPUTED FACTS ARE THAT ASSESSEE PURCHASED THE GOODS FROM THESE SEVEN HAWALA PARTIES, MADE THE PAYMENTS BY CHEQUES AND RECORDED THE PURCHASES IN THE BOOKS OF ACCOUNTS AS WELL AS THE CORRESPONDING SALES. AS A MATTER OF FACT THE HAWALA OPERATORS ARE VERY COMMON IN THE MARKET AND THERE IS EVERY LIKELIHOOD THAT ASSESSEE HAS RESORTED TO THE TAKING OF HAWALA ENTRIES FROM THE SAID PARTIES. BUT WHEN THE SALES OF THE ASSESSEE ARE N OT DISPUTED, THE ANOTHER THEORY WHICH COMES INTO PLAY IS THAT THE ASSESSEE PURCHASED GOODS FROM THE GREY MARKET AND THUS IN ORDER TO MAKE UP THE NON DELIVERY OF GOODS IN THE HAWALA PURCHASES, IN THE WHOLE PROCESS THE ASSESSEE IS LIKELY TO MAKE A SAVING BY WAY OF NON PAYMENT OF VAT AND OTHER INCIDENTAL LEVIES. THEREFORE, UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAS TO BROUGHT TO TAX ON A REASONABLE BASIS CONSIDERING THE GROSS PROFIT RATES AND OTHER ATTENDANT FACTORS IN THE PAST. IN THE PRESENT CASE, THE GP OF THE ASSESSEE RANGED BETWEEN 2.85% TO 1.89% FROM 2007 - 08 TO 2010 - 11. SO UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE DISALLOWANCE AS SUSTAINED BY LD. CIT(A) IS EXCESSIVE AND NEEDS TO BE REDUCED FURTHER. CONSIDERING THE GROSS PROFIT RATE OF PAST T HREE YEARS, WE ARE OF THE OPINION THAT RESTRICTION OF ADDITION TO 6% OF THE TOTAL PURCHASES IN ORDER TO BRING THE SAID PURCHASES TO TAX WHICH WOULD BE SUFFICE TO COVER ANY POSSIBLE LEAKAGE OF REVENUE. THE AO IS DIRECTED ACCORDINGLY 7. IN THE RESULT, APPEA L OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.3601/M/2015 (REVENUES APPEAL) 8. SINCE WE HAVE ALREADY DECIDED THE ISSUE IN APPEAL NO.3378/M/2015, THEREFORE, THE CROSS APPEAL OF THE REVENUE STANDS DISMISSED. ITA NO.1937/MUM/2019 ASSESSMENT Y EAR: 2011 - 12 PAGE 3 OF 3 5. LEARNED DEPARTMENTAL R EPRESENTATIVE HAS ALSO FAIRLY AGREED THAT THE ISSUES RAISED ON THIS APPEAL ARE SQUARELY COVERED BY THE AFORESAID DECISION. I SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THEN THE VIEW SO TAKEN BY THE COORDINATE BENCH. RESPECTFULLY FOLLOWING THE COOR DINATE BENCH ORDER, I CONFIRM ACTION OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACIN G THE DETAILS ON THE NOTICE BOARD. SD/ - PRAMOD KUMAR (VICE PRESIDENT) MUMBAI, DATED THE 13 TH DAY OF JULY, 2020 NISHANT VERMA, SR. SP COPIES TO: (1) THE APPLICANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI