KHILARI INFRASTRUCTURE PRIVATE LIMITED, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX-15(2)(2), MUMBAI

ITA 279/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Bogus purchase; Set aside

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI AMARJIT SINGH ( J M) I.T.A. NO. 279 & 5950 /MUM/ 2018 (ASSESSMENT YEAR 20 11 - 12 ) KHILARI INFRASTRUCTURE PVT. LTD. 101 - 104, PRABHAT CENTRE ANNEXE, SECTOR - 14A, CBD BELAP UR, NAVI MUMBAI - 400614. PAN : AAFCA9143A V S . ACIT - 15(2)(2) AAYAKAR BHAVAN CHURCHGATE M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI HARI S. RAHEJA DEPARTMENT BY SHRI MANOJ KUMAR SINGH DATE OF HEARING 4.4 . 201 9 DATE OF PRONOUNCEMENT 4 . 4 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : THESE ARE APPEALS BY THE ASSESSEE AGAINST RESPECTIVE ORDERS OF LEARNED CIT(A) FOR THE SAME ASSESSMENT YEAR. 2. ASSESSMENT ORDER IN THE ABOVE CASES WERE REOPENED PURSUANT TO INFORMATION RECE IVED FOR ASSESSEE MAKING BOGUS PURCHASES. THE ASSESSING OFFICER AND LEARNED CIT(A) HAVE MADE AN ADDITION OF 12.5% OF THE BOGUS PURCHASES. AGAINST THIS ORDER, THE ASSESSEE HAS FILED APPEAL BEFORE THE ITAT. 3. AT THE OUTSET, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE WHEREIN IDENTICAL CIRCUMSTANCES IN ITA NO. 6354/MUM/2017 FOR A.Y. 2010 - 11 VIDE ORDER DATED 31.12.2018, THIS ITAT HAD REDUCED THE ADDITION FROM 12. 5% TO 6.% OF THE BOGUS PURCHASES. HENCE, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT DISALLOWANCE IN THIS CASE SHOULD BE RESTRICTED TO 6 % OF THE BOGUS PURCHASES. 2 4. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THE PROPOSITION THAT I N IDENTICAL CIRCUMSTANCES IN ASSESSEES OWN CASE THIS TRIBUNAL HAD DIRECTED THAT 6% DISALLOWANCE SHOULD BE DONE OUT OF BOGUS PURCHASES. 5. UPON DUE CONSIDERATION WE NOTE THAT IN ASSESSEES OWN CASE ITAT HAS MODIFIED THE ORDER OF LEARNED CIT(A) AND DIRECTE D THE ASSESSING OFFICER TO DISALLOW 6% FROM THE BOGUS PURCHASES. THE ITAT CONCLUDED AS UNDER : - NOW, AFTER CONSIDERING THE ARGUMENTS OF THE RIVAL PARTIES AND FACTUAL MATRIX OF THE CASE, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE CIT(A) @12.5% ON BO GUS PURCHASES IS ON THE HIGHER SIDE AS THE APPLICABILITY OF VAT IS 4% IN THE INSTANT CASE. IN SUCH SCENARIO, THE GENERAL PRESUMPTION IS THAT THE ASSESSEE MIGHT HAVE MADE THE PURCHASES FROM THE GREY MARKET THEREBY MAKING SAVINGS OF VARIOUS EXPENSES INCLUDIN G VAT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT, IT WOULD BE REASONABLE IN THE FACTS OF THE PRESENT CASE IF THE BOGUS PURCHASES ARE BROUGHT TO TAX @6%. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO APPLY THE RATE OF 6% ON THE BOG US PURCHASES AS AGAINST 12.5% CONFIRMED BY THE CIT(A) . 6. F OLLOWING THE PRECEDENT FROM ASSESSEES OWN CASE, WE ALSO DIRECT IN THIS CASE THAT ASSESSING OFFICER SHOULD DISALLOW 6% OUT OF THE BOGUS PURCHASES. 7. IN THE RESULT, APPEALS FILED BY THE AS SESSEE STAND PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 4 . 4 . 201 9 . SD/ - SD/ - (AMARJIT SINGH ) (SH A MIM YAHYA ) J U DICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 4 / 20 1 9 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. 3 BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECRETARY ) PS ITAT, MUMBAI