KANTABEN CHANDULAL VOHERA, MUMBAI V. ITO 32(1)(2),

ITA 2383/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0361 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2017
• Court: TRIBUNAL
• Department Lawyers: KUMAR SANJAY
• Assessee Lawyers: JITENDRA V SOMAIYA
• Keywords: Bogus purchase; Rejection of books of accounts

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 2383 /MUM/ 20 17 (ASSESSMENT YEAR 20 09 - 1 0 ) KANTABEN CHANDULAL VOHERA C - 36, BENHUR APARTMENT CHANDAVARKAR ROAD BORIVALI WEST MUMBAI - 400092. VS. ITO 32(1)(2) MU MBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AACPV7453L ASSESSEE BY SHRI JITENDRA V. SOMAIYA DEPARTMENT BY SHRI KUMAR SANJAY DATE OF HEARING 7.6 . 201 7 DATE OF PRONOUNCEMENT 7.6 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 29.02.2016 PASSED BY LD CIT(A) - 44, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN NOT GRANTING FULL RELIEF IN RESPECT OF ADDITION RELATING TO ALLEGED BOGUS PURCHASES. 2 . I HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN COPPER SHEETS, TUBES, C.I SHEETS, S S SHEETS ETC. THE AO RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THAT SOME OF THE DEALERS WERE PROVIDING ACC OMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIALS. THE AO NOTICED THAT THE ASSESSEE HAS PURCHASED MATERIALS TO THE TUNE OF RS.31,52,860/ - FROM THE PARTIES SO IDENTIFIED BY THE SALES TAX DEPARTMENT. THE AO DISALLOWED THE ENTIRE AMOUNT OF PURCHASES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. THE LD CIT(A) RESTRICTED THE ADDITION TO 3.36% OF THE KANTABEN CHANDULAL VOHERA 2 ABOVE SAID AMOUNT. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 3. I NOTICE THAT THE LD CIT(A) HAS GRANTED PARTIAL R ELIEF TO THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: - 3.4 THE APPELLANT IS A TRADER. THE AO IN HIS ORDER HAS DEALT EXCLUSIVELY WITH THE PURCHASE OF THE APPELLANT. HOWEVER, IN THE CASE OF A TRADER, IF THERE ARE NO PURCHASES OF MATERIAL, THERE CANNOT BE A NY SALES ALSO. AS MENTIONED ABOVE, THE AO HAD DISALLOWED A PART OF PURCHASES WITHOUT AT THE SAME TIME QUESTIONING THE SALES FIGURE OF THE ASSESSEE. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THERE IS SUPPRESSION OF SALES ALSO BY THE APPELLA NT. THE AO HAS ALSO NOT REJECTED THE BOOKS OF ACCOUNTS. AS FAR AS THE ISSUE OF PRODUCING THE SUPPLIERS B EFORE THE AO IS CONCERNED, THE A SSESSEE CANNOT BE REASONABLY EXPECTED TO FORCE THE SUPPLIERS TO REPLY TO THE AO OR TO APPEAR BEFORE THE AO. 4. THE MAIN CONTENTION OF THE ASSESSEE IS THAT THERE IS NO MATERIAL AVAILABLE WITH THE AO TO COME TO THE CONCLUSION THAT THE IMPUGNED PURCHASES ARE BOGUS, EXCEPT THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT. THE LD D.R STRONGLY DEFENDED THE ORDER PASSE D BY LD CIT(A) BY SUBMITTING THAT THE LD CIT(A) HAS BEEN VERY MUCH REASONABLE IN RESTRICTING THE ADDITION TO 3.5% OF THE BOGUS PURCHASES. 5. HAVING HEARD RIVAL CONTENTIONS, I AM OF THE VIEW THAT THE DECISION TAKEN BY LD CIT(A) DOES NOT CALL FOR ANY IN TERFERENCE. IN THE INSTANT CASE, THE AO HAS NOT PROVED THAT THE IMPUGNED PURCHASES HAVE NOT BEEN SOLD. AS SUBMITTED BY LD A.R, AN ITEM CANNOT BE SOLD WITHOUT PURCHASING THE SAME. HENCE I AM OF THE VIEW THAT THERE IS NO REASON TO DISALLOW ENTIRE AMOUNT O F PURCHASES. I FURTHER NOTICE THAT THE ASSESSEE HAS NOT FURNISHED BOOKS OF ACCOUNTS OR OTHER MATERIALS TO PROVE THE GENUINENESS OF PURCHASES. HENCE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN RESTRICT ING THE KANTABEN CHANDULAL VOHERA 3 DISALLOWANCE TO 3.5% OF THE ALLEGED BOGUS PURCHASES. ACCORDINGLY I UPHOLD THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 7.6 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 7 / 6 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT( A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI