RICH & ROYAL, THANE V. ITO WD 3(5), KALYAN

ITA 2792/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8108 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI SAKTIJIT DEY (JM) I.T.A. NO. 2792/MUM/2017 (ASSESSMENT YEARS 2008 - 09) RICH & ROYAL ZOJWALLA SHOPPING COMPLEX, AGRA ROAD, KALYAN (W), DIST. THANE, PIN 421 301. VS. INCOME TAX OFFICER, WARD - 3(5), KALYAN. ( APPELLANT ) .. ( RESPONDENT ) PAN NO. AADFR3357G ASSESSEE BY : SHRI SUBODH RATNAPARKHI DEPARTMENT BY : SHRI V. VIDHYADHAR DATE OF HEARING : 18.12.2017 DATE OF PRONOUNCEMENT : 18 .12.2017 O R D E R PER B.R. BASKARAN, AM : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 11.01.2017 PASSED BY LD CIT(A) - 1, THANE AND IT RELATES TO THE ASSESSMENT YEAR 2008 - 09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING DISALLOWANCE OF ALLEGED BOGUS PURCHASES OF RS.21.20 LAKHS. 2. THE ASSESSEE IS A RETAIL TRADER IN CLOTH AND READYMADE GARMENTS. THE REVENUE RECEIVED INFORMATION FROM SALES TA X DEPARTMENT OF MAHARASHTRA THAT CERTAIN DEALERS ARE INDULGING IN PROVIDING ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIALS AND UPON NOTICING THAT THE ASSESSEE HAS PURCHASED GOODS TO THE TUNE OF RS.21.20 LAKHS FROM SOME OF SUCH PURCHASES 2 ITA NO. 2792/MUM/2017 DURING THE YEAR UNDER CONSIDERATION , THE AO RE - OPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION. THE AO ISSUED NOTICES U/S 133(6) OF THE ACT TO THE SUPPLIERS, WHO CONFIRMED TO THE ASSESSING OFFICER THAT THEY HAVE PROVIDED ONLY ACCOMMODATION BILLS. WHEN THEIR REPLIES WERE CONFRONTED TO THE ASSESSEE, IT APPEARS THAT THE ASSESSEE MADE ENQUIRIES WITH THE SUPPLIERS, WHO IN TURN CONFIRMED THE SALE TRANSACTIONS. HENCE THE ASSESSEE TOOK STAND BEFORE THE AO THAT THE TRANSACTIONS OF PURCHASES MADE FROM THE A BOVE SAID SUPPLIERS ARE GENUINE. THE AO, HOWEVER, NOTICED THAT PURCHASES MADE FROM IDENTI CAL PARTIES IN THE YEAR RELEVANT TO AY 2009 - 10 AND OTHER YEARS WERE CONSIDERED TO BE BOGUS AND DISALLOWED. ACCORDINGLY, THE AO DISALLOWED THE PURCHASES OF RS.21.20 LA KHS AND THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE LD A.R SUBMITTED THAT IDENTICAL ADDITIONS WERE MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEARS 2005 - 06, 2006 - 07, 2007 - 08 AND 2009 - 10. THE CO - ORDINATE BENCHES OF TRIBUNAL HAVE DELETED THE ADDITIONS IN AY 2005 - 06, 2006 - 07 AND 2009 - 10. HOWEVER ANOTHER CO - ORDINATE BENCH HAS CONFIRMED ADDITION TO THE EXTENT OF 12.50% OF THE PURCHASES IN AY 2007 - 08. HE SUBMITTED THAT THE PRESENT ASSESSMENT YEAR IS 2008 - 09 AND SUBMITTED THAT THE ASSESSEE IS READY TO AGR EE FOR AN ADDITION OF 12.50% AS CONFIRMED BY THE TRIBUNAL IN AY 2007 - 08, IN ORDER TO PUT THE DISPUTE AT REST. 4. THE LD D.R, ON THE CONTRARY, SUPPORTED THE ORDER PASSED BY THE LD CIT(A) AND SUBMITTED THAT THE ADDITION SHOULD BE CONFIRMED, SINCE THE SUPP LIERS HAVE CONFIRMED BEFORE THE AO THAT THEY HAVE PROVIDED ONLY ACCOMMODATION BILLS. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE ALLEGED PURCHASES HAVE BEEN MADE FROM CONCERNS BELONGING TO A PERSON NAMED SHRI RAKESH K UMAR GUPTA. WE NOTICE THAT HE HAS ADMITTED THAT HE HAD PROVIDED ONLY ACCOMMODATION BILLS DURING THE COURSE OF SURVEY PROCEEDINGS, BUT LATER RETRACTED THE SAME. IT APPEARS THAT HE HAS ALSO GIVEN 3 ITA NO. 2792/MUM/2017 AFFIDAVITS CONFIRMING THE SALE TRANSACTIONS. HOWEVER, SUBSE QUENTLY HE HAS TAKEN STAND BEFORE THE AO/LD CIT(A), IN THE EARLIER YEARS, THAT THE TRANSACTIONS WERE ONLY ACCOMMODATION ENTRIES. THUS, WE NOTICE THAT THE SUPPLIER SHRI RAKESH KUMAR GUPTA IS SHIFTING HIS STAND. WE FURTHER NOTICE THAT THE CO - ORDINATE BENCH ES HAVE TAKEN DIFFERENT VIEWS ON THE IDENTICAL ADDITION MADE IN THE OTHER YEARS. BEFORE US, THE LD A.R AGREED FOR ADDITION OF 12.50% OF THE VALUE OF PURCHASES AS CONFIRMED BY THE TRIBUNAL IN AY 2007 - 08, EVEN THOUGH THE TRIBUNAL HAD DELETED IDENTICAL ADDIT ION IN OTHER THREE YEARS. EVEN THOUGH T HE LD D.R SUPPORTED THE ORDER OF LD CIT(A), HE DID NOT SERIOUSLY OBJECT TO THE SUBMISSION OF LD A.R . ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND DIRECT THE AO TO RESTRICT THE ADDITION TO 12.50% OF THE ALLEGED BOGUS PURCHASES ADDED BY HIM. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 1 8 .12.2017. SD/ - SD/ - ( SAKTIJIT DEY ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 1 8 . 12 .201 7 *SSL* 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) ITAT, MUMBAI