INDRAYANI SALES P.LTD, MUMBAI V. DCIT 10(1)(1), MUMBAI

ITA 2402/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8338 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: R MURTHY
• Keywords: Bogus purchase; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 2402 / MUM/20 1 7 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. INDRAYANI SALES PVT. LTD., 3/128, RAHUL MITTAL INDUSTRIAL ESTATE, ANDHERI KURLA ROA D MUMBAI 400 059 VS. DCIT 10(1)(2), MUMBAI - 400 013 PAN/GIR NO. AABCI3891F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI R. MURTHY REVENUE BY SHRI V. JUSTIN DATE OF HEARING 07 / 09 /201 7 DATE OF PRONOUNCEME NT 06 / 12 / 201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 14, MUMBAI DATED 19/01/2017 FOR A .Y.2009 - 10, IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. THE FOLLOWING GROUNDS HAV E BEEN TAKEN BY THE ASSESSEE: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE BY ADDING BACK TO THE TOTAL INCOME, AN AMOUNT OF RS 27,08,575 / - BEIN G 12.5% OF TOTAL NON - GENUINE PURCHASES OF RS. 2,16,68,605 / - AS PROFIT EARNED FROM SUCH PURCHASES. THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE DELETED. 2) THE APPELLANT CRAVES LEAVE TO ADD/ALTER ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSE SSEE COMPANY IS ENGA G ED IN THE BUSINESS OF TRADING OF PRI NTER, CARTRIDGE PARTS, TANNER S INK, ETC. THE ASSESSEE HAD FIL ED ITS RETURN ITA NO. 2402/MUM/2017 M/S. INDRAYANI SALES PVT. LTD., 2 OF INCOME FO R A.Y.2009 - 10 O N 28.9.2 00 9 DECLARI NG TOTAL I NCOME OF RS.41.77,044/ - . THE RETURN WAS P ROCESSED U/S. 143(1) OF TH E ACT, SUBSEQUENTLY, THE AO RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT AND ALSO FROM THE OFFICE OF THE DGI T(LNV ) MUMBAI THAT TH E ASSESSEE IS A BENEFICIA RY OF ACCOMMODATION BI LL OF PURCHASES FROM CERTAIN BOG U S HAWALA DEALERS, THE INFORMATION WAS THAT THE CONCERNED DEALERS HAD NOT SOLD MY ACTUAL GOODS BUT HAD GIVEN ACCOMMODATION ENTRIES OF SALES TO THE ASSESSEE CO MPANY. AO ESTIMATED PROFIT OF 12.5% ON THE ALLEGED PURCHASES. 4. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. IT WAS ARGUED BY LEARNED AR THAT ASSESSEE HAD SHOWN GP AT 22%, THEREFORE, FURTHER ADDITION OF 12.5% WILL BE UNREASONA BLE. HE PLACED ON RECORD THE ORDER OF THE ASSESSING OFFICER FOR THE IMMEDIATE SUBSEQUENT ASSESSMENT YEAR 2010 - 11 DATED 04/03/2016 WHEREIN ADDITION FOR SIMILAR BOGUS PURCHASES HAS BEEN UPHELD BY THE AO AT 4% AFTER CONSIDERING NATURE OF ASSESSEES BUSINES S. WE ALSO FOUND THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD SHOWN GP AT 22.86% AS COMPARED TO THE GP OF IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09 AT 15.78%. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTRICT THE A DDITION TO THE EXTENT OF 4% OF THE ALLEGED BOGUS PURCHASES. ITA NO. 2402/MUM/2017 M/S. INDRAYANI SALES PVT. LTD., 3 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 06 / 12 /2017 SD/ - ( SANDEEP GOSAIN ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 0 6 / 12 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//