SCRUBEX ABRASIVES, MUMBAI V. ITO 24(3)(4), MUMBAI

ITA 2086/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0597 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 31-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-03-2017
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER ITA NO. 2086/MUM/2017 (ASSESSMENT YEAR: 20 0 9 - 1 0 ) M/S. SCRUBEX ABRASIVES 34, SIDHPURA CO - OP INDUSTRIAL ESTATE, GAIWADI ROAD, GOREGAON (W) MUMBAI 400 062 PAN: ABIFS5047C . APPELLANT V/S ITO 24 (3)(4), IT OFFICES, C - 11, PRATYAKHSKAR BHAVAN BKC, BANDRA (E) MUMBAI 400 051 . RESPONDENT ASSESSEE BY : MS. NEHA PARANJPE REVENUE BY : SHRI. SUMIT KUMAR DATE OF HEARING 31 . 05 . 2017 DATE OF ORDER - 01 .0 6 .2017 O R D E R PER: SHAMIM YAHYA IN THIS APPEAL BY THE ASSESSEE, ASSESSEE IS AGGRIEVED FOR THE 100% DISALLOWANCE OF BOGUS PURCHASE OF RS.4,63,190/ - . 2. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT HUNDRED PERCENT DISALLOWANCE OF BOGUS PURCHASE HAS BEEN MADE IN THIS CASE ON ACCOUNT OF INFORMATION THAT THE SUPPLIERS WERE PROVIDING BOGUS PURCHASE BILLS. I NOTE THAT THE SALES HAVE NOT BE EN DOUBTED. IT IS SETTLED LAW THAT WHEN THE SALES HAVE NOT BEEN DOUBTED THE ITA NO. 2086/MUM/2017 M/S. SCRUBEX ABRASIVES 2 CORRESPONDING PURCHASE CANNOT BE HELD TO BE IN ENTIRELY BOGUS. SUCH PRACTICES INDICATE PURCHASING THROUGH THE GREY MARKET WHICH ENTAILS SAVINGS TO THE ASSESSEE ON ACCOUNT OF SAVING IN TAXES AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SIMILAR CIRCUMSTANCES HONOURABLE GUJARAT HIGH COURT IN THE CASE OF SUMIT P SHETH HAS UPHELD DISALLOWANCE OF 12.5% OF THE BOGUS PURCHASES. LEARNED COUNSEL OF THE ASSESSEE FAIRLY AGREED FOR A DISALLOWA NCE OF 12.5% OF THE BOGUS PURCHASES. 3. ACCORDINGLY IN THE BACKGROUND OF AFORESAID DISCUSSION I MODIFY THE ORDER OF LEARNED CIT - A. I HOLD THAT 12.5% DISALLOWANCE FROM THE BOGUS PURCHASES WOULD MEET THE END OF JUSTICE. 4. IN THE RESULT THESE APPEAL BY THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 .0 6 .2017 S D / - SHAMIM YAHYA ACCOUNTANT MEMBER MUMBAI, DATED: 0 1 .0 6 .2017 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. BY ORDER KARUNA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI