LAXMILAL BAPNA, RAIGAD V. ASST CIT PANVEL CIR PANVEL, PANVEL

ITA 2450/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0138 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 2450 /MUM/ 2 017 (ASSESSMENT YEAR 20 09 - 10 ) SHRI LAXMILAL BAPNA SHOP NO. 1, ADITYA ARCADE NR. PANCHRATNA HOTEL PAVEL, DISTRICT RAIGAD VS. ACIT PANVEL CIRCLE P ANVEL ( APPELLANT ) ( RESPONDENT ) PAN NO . AAYPB9866B ASSESSEE BY SHRI PIYUSH CHHAJED DEPARTMENT BY SHRI RAKESH RANJAN DATE OF HEARING 8 .6 . 201 7 DATE OF PRONOUNCEMENT 5.7 . 201 7 O R D E R THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 31.01.2017 PASSED BY LD CIT(A) - 2, THANE IN PARTIALLY CONFIRMING THE ADDITION RELATING TO ALLEGED BOGUS PURCHASES MADE IN AY 2009 - 10. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN CERA MICS, PIPE FITTINGS ETC. CONSEQUENT TO THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, IT CAME TO THE NOTICE OF THE REVENUE THAT THE ASSESSEE HAS MADE PURCHASES TO THE TUNE OF RS.21,57,443/ - DURING THE YEAR UNDER CONSIDERATION FROM THE PARTIES, WHO WERE LISTED OUT BY THE SALES TAX DEPARTMENT AS HAWALA DEALERS, I.E., THEY PROVIDED ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL. HENCE THE AO TREATED THE ABOVE SAID AMOUNT OF RS.21,57,443/ - AS BOGUS PURCHASES AND DISALLOWED THE SAME. THE LD CIT(A) SUSTAINED THE ADDITION TO THE EXTENT OF RS.16,41,689/ - BY CONSIDERING THE NET PROFIT RATE/GP RATE DECLARED BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. SHRI LAXMILAL BAPNA 2 3. I NOTICE THAT THE ASSESSEE HAS AGREED BEFORE LD CIT(A) FOR ADDI TION HIGHER OF 25% OF BOGUS PURCHASE VALUE OR ADDITION RESULTING IN ADOPTING N.P RATE AT 8.17%. THE LD CIT(A) HAS ALSO ACCEPTED THE PLEA OF THE ASSESSEE AS LOGICAL. HOWEVER, WHILE MAKING CALCULATIONS, THE LD CIT(A) ADOPTED THE G.P RATE OF 21.70% RELATIN G TO AY 2011 - 12 AND APPLIED THE SAME ON THE TURNOVER OF THE ASSESSEE AND ACCORDINGLY COMPUTED THE DIFFERENCE IN G.P AMOUNT AT RS.16,41,689/ - AND SUSTAINED TO THAT EXTENT. IN THIS PROCESS, THE LD CIT(A) HAS APPLIED HIGHER G.P RATE ON THE SALES MADE OUT OF GENUINE PURCHASES ALSO. IN MY VIEW, THE LD CIT(A) WAS NOT JUSTIFIED IN DOING SO. HAVING ACCEPTED THE PLEA OF THE ASSESSEE, THE LD CIT(A) SHOULD HAVE WORKED OUT THE ADDITION AS PER THE SAID PLEA. THE WORKINGS AS PER THE PRAYER OF THE ASSESSEE IS (A) 25% OF BOGUS PURCHASES (25% OF RS.21,57,443) = RS.5,39,360/ - (B) DIFFERENCE IN N.P BY ADOPTING 8.17% AS NP RATE RS.1,60,47,794/ - * 8.17% = RS.13,11,104 LESS: - N.P DECLARED RS. 5,88,465 ----------------- RS.7,22,640/ - HIGHER O F THE TWO IS RS.7,22,640/ - . ACCORDINGLY I MODIFY THE ORDER PASSED BY LD CIT(A) AND DIRECT THE AO TO SUSTAIN THE ADDITION TO THE EXTENT OF RS.7,22,640/ - . I ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDE R HAS BE EN PRONOUNCED IN THE COURT ON 5.7 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 5 / 7/ 20 1 7 COPY OF THE ORDER FOR WARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI SHRI LAXMILAL BAPNA 3 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI