HAJARAM PUROHIT, MUMBAI V. DCIT 36, MUMBAI

ITA 2666/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3355 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMARDR
• Assessee Lawyers: JITENDRA SINGH; NEHA PARANJAPE
• Keywords: Bogus purchase; Business income; Accommodation entries
• Section: 133A; 131; 69

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.2666/MUM/2015 ASSESSMENT YEAR: 2008-09 SHRI HAJARAM PUROHIT, SHOP NO.8, BLDG. NO.33, GANESH BHUVAN, 3 RD KHETWADI LANE, MUMBAI-400004 / VS. DCIT-36, MUMBAI / ASSESSEE / REVENUE P.A. NO . AGUPPP6813E $ % & / ASSESSEE BY SHRI JITENDRA SINGH & MS. NEHA PARANJAPE $ % & / REVENUE BY SHRI SUMIT KUMAR-DR / DATE OF HEARING 07/09/2016 & / DATE OF ORDER: 08/09/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 31/10/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO ADDITION OF ITA NO.2666/MUM/2015 HAJARAM P PUROHIT 2 RS.15,07,758/- AS UNDISCLOSED COMMISSION AND NOT AL LOWING THE CLAIM OF EXPENSES IGNORING THE INCOME ALREADY D ISCLOSED IN THE RETURN OF INCOME. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI JEETENDRA SINGH ALONG WITH MS. NEHA PARANJAPE, BROADLY CONTENDED THAT ADOPTION OF RATE OF COMMISSION AT TH E RATE OF 3% IS HIGHLY EXCESSIVE AS NORMALLY IN SUCH TYPE OF CASES, THE COMMISSION IS 1 TO 1.5% OF THE SALES. HOWEVER, THE LD. DR, SHRI SUMIT KUMAR DEFENDED THE ADOPTION AT THE RATE OF 3%. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT A SURVEY ACTION 133A OF THE ACT WAS CARRIE D OUT ON 28/01/2011 AT THE BUSINESS PREMISES OF THE ASSESSEE . DURING SURVEY PROCEEDINGS, THE STATEMENT OF PROPRIE TOR OF M/S RINKU STEEL CORPORATION WAS RECORDED ON OATH U/ S 131 OF THE ACT, WHEREIN, THE ASSESSEE ADMITTED TO HAVE TAKEN ACCOMMODATION ENTRIES IN THE NATURE OF PURCHASE FRO M CERTAIN PARTIES. THE FACTS HAS BEEN MENTIONED IN P ARA 4.1.1 OF THE IMPUGNED ORDER ALONG WITH BREAKUP OF PURCHAS ES MADE BY THE ASSESSEE FROM VARIOUS PARTIES BY WAY OF ACCOMMODATION ENTRIES. THE CRUX OF THE FACTS IS THA T THESE WERE FICTITIOUS ENTRIES/BOGUS PURCHASE BILLS. THE LD. ASSESSING OFFICER ADOPTED THE COMMISSION AT THE RAT E OF 3% OF THE TOTAL SALES, WHICH WORKED OUT TO RS.15,07,758/- . CONSIDERING THE TOTALITY OF FACTS, SUBMISSIONS OF T HE ASSESSEE AS WELL AS OF THE LD. DR, NO BASIS HAS BEEN MADE FO R SUCH ADOPTION BY THE LD. COMMISSIONER OF INCOME TAX (APP EAL) AS ITA NO.2666/MUM/2015 HAJARAM P PUROHIT 3 WELL AS BY THE LD. ASSESSING OFFICER. IF THE STATEM ENT OF THE ASSESSEE IS TO BE CONSIDERED AS CORRECT, THEREIN, T HE RATE HAS BEEN MENTIONED AS 1.5%. THUS, BY TAKING A JUSTIFIED VIEW, THE RATE IS ADOPTED AT 2% OF THE TOTAL SALES (AS AGREED BY THE LD. COUNSEL FOR THE ASSESSEE ALSO) IN PLACE OF 3% ADOPTED/AFFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL), CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. IT IS MADE CLEAR THAT THIS ADOPTION IS BAS ED UPON THE PECULIAR FACTS OF THE PRESENT APPEAL AND MAY NOT BE QUOTED AS A REFERENCE. 3. THE NEXT GROUND RAISED BY THE ASSESSEE PERTAINS TO TREATING THE DEPOSIT OF RS.28,31,733/- AS UNEXPLAIN ED MONEY U/S 69 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). THE CRUX OF ARGUMENT IS THAT ENTIRE DEPOSIT WAS CONSIDE RED AS UNEXPLAINED BY THE LD. ASSESSING OFFICER. ON THE O THER HAND, THE LD. DR STRONGLY DEFENDED THE ADDITION MADE BY T HE ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSI ONER OF INCOME TAX (APPEAL). 3.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT ED THAT AN ADDITION OF RS.28,31,733/- WAS MADE BY THE ASSESSIN G OFFICER U/S 69A OF THE ACT, BEING UNEXPLAINED MONEY AS THE ASSESSEE COULD NOT EXPLAIN THE NATURE AND SOURCE OF DEPOSIT APPEARING IN HIS BANK ACCOUNT MAINTAINED WITH STANDARD CHARTE RED BANK. IT IS ALSO NOTED THAT THE ASSESSEE WHILE TEN DERING THE STATEMENT U/S 131, ON OATH, ON 28/01/2011 CATEGORIC ALLY ADMITTED THAT THE TRANSACTIONS OF THE BANK ACCOUNT WERE NOT ITA NO.2666/MUM/2015 HAJARAM P PUROHIT 4 REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS AND FURT HER THE SAID BANK ACCOUNT WAS USED FOR MAKING TRANSACTION F OR PURPOSES OF ACCOMMODATION ENTRIES. IT IS ALSO NOTED THAT NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE ASSESSEE D ID NOT EXPLAIN THE SOURCE OF DEPOSIT. BEFORE THIS TRIBUNAL ALSO, NOTHING WAS EXPLAINED BY THE ASSESSEE WITH RESPECT TO SOURCE OF THE DEPOSITS. IT IS FURTHER NOTED THAT THE STATE MENT TENDERED U/S 131 OF THE ACT WAS NEVER CONTRADICTED BY THE ASSESSEE AND IT IS ALSO NOT THE CASE THAT THE STATE MENT WAS RECORDED UNDER DURESS AND THREAT. IN VIEW OF THIS FACTUAL MATRIX, THE CONCLUSION DRAWN IN THE IMPUGNED ORDER CANNOT BE INTERFERED WITH, THUS, AFFIRMED. THIS GROUND OF THE ASSESSEE IS DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE P RESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSIO N OF THE HEARING ON 07/09/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 08/09/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * / THE CIT, MUMBAI. 4. ) ) * / CIT- , MUMBAI 5. +,- ' , ) '#$ ' / , / DR, ITA NO.2666/MUM/2015 HAJARAM P PUROHIT 5 ITAT, MUMBAI 6. -0 1$ / GUARD FILE. & / BY ORDER, (+# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI