ITO 27(2) (1) , MUMBAI V. M/S. PADMA INDUSTRIES , MUMBAI

ITA 2364/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1528 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI SHRI AMIT SHUKLA, JM आयकरअपीलसं./ I.T.A. No. 2364/Mum/2021 (ननधधारणवर्ा / Assessment Year: 2010-11) & आयकरअपीलसं./ I.T.A. No. 2365/Mum/2021 (ननधधारणवर्ा / Assessment Year: 2011-12) ITO-27(2)91), R. No. 633, 4 th floor, Tower No. 6, Vashi Railway Station Complex, Vashi, Navi Mumbai-400 703 बनाम/ Vs. M/s Padma Industries A/18, Muni Suvrat Darshan, Navroji Lane, (Cama Lane), Ghatkopar(W), Mumbai-400 086 स्थधयीलेखधसं./जीआइआरसं./PAN No. AAIFP9236D (अपीलधथी/Appellant) : (प्रत्यथी / Respondent) अपीलधथीकीओरसे/ Appellant by : Ms. Neeta Jeph, Ld. DR प्रत्यथीकीओरसे/Respondent by : None सुनवधईकीतधरीख/ Date of Hearing : 29.08.2022 घोर्णधकीतधरीख / Date of Pronouncement : 29.08.2022 आदेश / O R D E R Per Amit Shukla, Judicial Member: The aforesaid appeals have been filed by the revenue against the separate impugned order of even date 17.10.2021, passed by National Faceless Appeal Centre, Delhi for the quantum appeal of 2 I.T.A. No. 2364 & 2365/Mum/2021 M/s Padma Industries assessment passed u/s 143(3) r.w.s. 147 for AY 2010-11 and 2011- 12. 2. In both the appeals, common issue has been recorded on deletion of addition of Rs. 7,62,123/- as against addition of Rs. 8,70,998/- made by AO on account of bogus purchases for AY 2010-11 and deletion of addition of Rs. 36,73,687/- as against addition of Rs. 41,98,499/- on account of bogus purchases for AY 2011-12. 3. Ld. CIT(A) has sustained the addition only on account of gross profit @ 12.5% of the bogus purchases. 4. The facts in brief are that AO on the basis of information received from Investigation Wing that assessee has accommodation bill for purchase through third party declaration as hawala operator. At the threshold, the tax effect on the disputed issue in revenue’s appeal is much less than 50 lakhs as prescribed in the CBDT Circular No. 17 of 2019 dated 08.08.2019. 5. Here it is not a case where information has been received that the assessment has been made on the basis of information received 3 I.T.A. No. 2364 & 2365/Mum/2021 M/s Padma Industries from external agency. As per exception provided in para 10(e) of the CBDT circular no. 3 of 2018 dated 11.07.2018, addition based on information from external sources falls in that exception, which reads as under:- (e) Where addition is based on information received from external sources in the nature of law enforcement agencies as CBI /ED /DRI /SFIO /Directorate General of GST Intelligence (DGGI). However, in the present case, from the perusal of the assessment order, it is seen that the information is not based on any external source but from DGIT Investigation, Mumbai, therefore it does not falls within the aforesaid exception. 6. In any case, Ld. CIT(A) while applying GP rate on bogus purchase had followed various ITAT decision which now is full covered by the decision of Hon’ble Bombay High Court in the case of PCIT vs. Md. Haji Adam & Co. (ITA No. 1044/2016) order dated 11 th February 2019, wherein it has been held that application of GP rate at 12.5%. Accordingly, the grounds raised by the revenue in both the appeals are dismissed. 4 I.T.A. No. 2364 & 2365/Mum/2021 M/s Padma Industries 7. In the result, both the appeals filed by the revenue stands dismissed. Orders pronounced in the open court on 29 th August, 2022. Sd/- (Amit Shukla) Judicial Member मुंबई Mumbai;नदनधंक Dated : 29/08/2022 Sr.PS. Dhananjay आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपीलधथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. नवभधगीयप्रनतनननध, आयकरअपीलीयअनधकरण, मुंबई/ DR, ITAT, Mumbai 6. गधर्ाफधईल / Guard File आदेशानुसार/ BY ORDER, .उि/सहायकिंजीकार (Dy./Asstt.Registrar) आयकरअिीिीयअतिकरण, मुंबई/ ITAT, Mumbai