Shri Manishbhai Champaklal Reperelia, Ahmedabad V. The Income Tax Officer, Ward-7(2), Ahmedabad

ITA 1983/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8302 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 20-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: T P HEMANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1983/AHD/2014 (ASSESSMENT YEAR: 2009-10) MANISHBHAI CHAMPAKLAL RUPERELIA C-202, VRAJ VIHAR-5, OPP. TEJDHARA BUNGLOWS, B/H. RAHUL TOWER, JODHPUR SATELLITE, AHMEDABAD-380015 V/S INCOME TAX OFFICER, WARD- 7 (2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABNPR2763D APPELLANT BY : SHRI T.P. HEMANI, AR RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. ( )/ ORDER DATE OF HEARING : 12 -10-201 7 DATE OF PRONOUNCEMENT : 17-10-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- XXI, AHMEDABAD DATED 27.02.2014 PERTAINING TO A.Y. 2009-10. ITA NO. 1983 /AHD/2014 . A.Y. 2009-10 2 2. THE APPEAL IS LATE BY 57 DAYS. THE ASSESSEE HAS REQ UESTED FOR THE CONDONATION OF THE APPEAL BY EXPLAINING FACTS FOR CAUSING THE D ELAY IN FILING THE APPEAL SUPPORTED BY AN AFFIDAVIT. WE ARE CONVINCED WITH TH E CAUSE OF DELAY AND THE SAME IS CONDONED. 3. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 13.80 LACS. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE IS TRADING IN MEDICAL SURGICAL EQUIPMENT. THE RETURN FOR THE YEAR WAS FIL ED ON 25.09.2009 DECLARING TOTAL INCOME OF RS. 5,02,528/-. THE RETURN WAS SELE CTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY STATUTORY NOTICES WERE ISSUED AND S ERVED UPON THE ASSESSEE. 5. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. FOUND THAT THE ASSESSEE HAS SHOWN CREDITORS OF RS. 1,07,94,642 /-. THE A.O. FURTHER FOUND THAT ONE OF THE CREDITORS NAMELY SIMPLEX INDUSTRIES WAS NOT TRACEABLE AT THE GIVEN ADDRESS WHICH WAS CONFIRMED BY THE I.T. INSPE CTOR. THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE AFOREMENTIONE D CREDITOR. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE SAID CREDITOR FOR VER IFICATION. IN RESPONSE THE ASSESSEE COULD FURNISH ONLY THE LEDGER ACCOUNT OF S IMPLEX INDUSTRIES. NEITHER ANY NEW ADDRESS WAS GIVEN NOR THE PARTY WAS PRODUCE D. THE A.O. CONCLUDED BY TREATING THE PURCHASES OF RS. 13.80 LACS AS BOGUS A ND MADE THE ADDITION OF THE SAME. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. ITA NO. 1983 /AHD/2014 . A.Y. 2009-10 3 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE ONCE AG AIN DREW ATTENTION TO THE COPY OF THE LEDGER ACCOUNT OF SIMPLEX INDUSTRIES. I T IS THE SAY OF THE LD. COUNSEL THAT THE PURCHASES ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS WHICH WERE SUBJECT TO AUDIT AND THE AUDITORS HAVE NOT DRAWN AN Y ADVERSE INFERENCE IN SUPPORT OF THE SAID PURCHASES. THE LD. COUNSEL FURT HER STATED THAT THE GOODS PURCHASED FROM SIMPLEX INDUSTRIES WERE SUBSEQUENTLY SOLD TO VARIOUS PARTIES AND THE ASSESSING OFFICER HAS ACCEPTED SALES MADE T O VARIOUS PARTIES. THEREFORE, THERE IS NO QUESTION OF TREATING THE PUR CHASES AS BOGUS. 8. REBUTTING TO THE SUBMISSIONS MADE BY THE LD. COUNSE L, THE LD. D.R. VEHEMENTLY STATED THAT THE ASSESSEE HAS FAILED TO ESTABLISH TH E IDENTITY OF SIMPLEX INDUSTRIES AND HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THE GENUINENESS OF THE PURCHASES. THE LD. D.R. STRONGLY RELIED UPON THE FI NDINGS OF THE LOWER AUTHORITIES. 9. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. THERE IS NO DISPUTE THAT THE ASSESSEE HAS ONLY FURNISHED THE CO PY OF LEDGER ACCOUNT OF SIMPLEX INDUSTRIES. THERE IS ALSO NO DISPUTE THAT ON PHYSICAL VERIFICATION, THE SAID FIRM WAS NOT FOUND AT THE GIVEN ADDRESS. IT IS ALSO TRUE THAT THE ASSESSEE HAS NOT FURNISHED ANY NEW ADDRESS OF SIMPLEX INDUSTRIES . IN OUR CONSIDERED OPINION, IT APPEARS THAT THE ASSESSEE MUST HAVE PUR CHASED GOODS FROM THE GREY MARKET AT A MUCH LESSER VALUE AND HAS TAKEN ACCOMMO DATION INVOICES FROM SIMPLEX INDUSTRIES. OUR VIEW IS FORTIFIED BY THE F ACT THAT THE ASSESSEE COULD DEMONSTRATE THE SALE OF GOODS PURCHASED FROM SIMPLE X INDUSTRIES AND THE SAME CAN BE UNDERSTOOD FROM THE FOLLOWING CHART:- P.F.C. SIGMA T.K.R. IMPLANTS S ET ITEM REGISTER ITA NO. 1983 /AHD/2014 . A.Y. 2009-10 4 1-APR-2008 TO 31-MAR-2009 DATE PARTICULARS VCH T YPE VCH NO. INWARDS QUANTITY OUTWARDS QUANTITY CLOSING QUANTITY 9 - 2 - 2009 SIMPLEX INDUSTRIES PURCHASE 00329/08 - 09 2 SET MRS. SARLA JAIN RETAIL INVOICE RI/0120 1 SET MRS. CHANDRAMANI KASLIWAL RETAIL INVOICE RI/0121 1 SET OSET 22 - 2 - 2009 SIMPLEX INDUSTRIES PURCHASE 00343/08 - 09 5 SET 5 SET 23 - 2 - 2009 SATISHKUMARI VASISTHA RETAIL INVOICE RI/0135 1 SET SUMITRADEVI BARAYA RETAIL INVOICE RI/0136 1 SET MRS. SARLA HALWAI RETAIL INVOICE RI/0137 1 SET SAVITRIDEVI RETAIL INVOICE RI/0138 1 SET MRS. M.S. BAXI RETAIL INVOICE RI/0139 1 SET OSET 5 - 3 - 2009 SIMPLEX INDUSTRIES PURCHASE 00356/08 - 09 3 SET 3 SET 6 - 3 - 2009 MRS. VIMLA DEVI RETAIL INVOICE R I/175 2 SET MRS. NIRMALADEVI RETAIL INVOICE RI/176 1 SET OSET 4 - 3 - 2009 SIMPLEX INDUSTRIES PURCHASE 00367/08 - 09 2 SET 2 SET 5 - 3 - 2009 SUMEDHA DURLABHJI MRS. NIRMALA CHATURVEDI RETAIL INVOICE RL / 202 RETAIL INVOICE RL / 203 1 SET 1 SET OSET TOTALS : 12 SET 12 SET OS ET 10. IT IS EQUALLY TRUE THAT THE REVENUE HAS NOT DRAWN A NY ADVERSE INFERENCE ORDERS SALES OF SUCH ITEMS ARE CONCERNED. ITA NO. 1983 /AHD/2014 . A.Y. 2009-10 5 11. IN OUR UNDERSTANDING OF THE FACT AND AS MENTIONED E LSEWHERE, THE GOODS MUST HAVE BEEN PURCHASED FROM THE GREY MARKET AT A MUCH LESSER VALUE. THEREFORE, THE ASSESSEE MUST HAVE MADE SUBSTANTIAL PROFIT IN A DDITION TO WHAT IS SHOWN IN ITS BOOKS OF ACCOUNTS. THEREFORE, WE ARE OF THE OPI NION THAT A MARGIN OF 25% ON GOODS OF RS. 13.80 LACS SHOULD BE ADDED TO THE T OTAL INCOME OF THE ASSESSEE WHICH MEANS THAT AN ADDITION OF RS. 3.45 LACS SHOUL D MEET THE ENDS OF JUSTICE. HOWEVER, WE MAKE IT CLEAR THAT THIS MARGIN OF 25% I S APPLIED ONLY FOR THE YEAR UNDER CONSIDERATION BECAUSE OF THE CLANDESTINE ACTI VITIES OF THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 10- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 17 /10/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD