NARANG AND RUCHI DEVELOPERS, MUMBAI V. CIT 33, MUMBAI

ITA 2816/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4544 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.2816/MUM/2015 ASSESSMENT YEAR: 2010-11 M/S NARANG AND RUCHI DEVELOPERS, GROUND FLOOR, NARANG MANOR, 15 TH ROAD, BANDRA (W), MUMBAI-400050 / VS. ITO, WARD-19(3), MATRU MANDIR, MUMBAI-400007 / ASSESSEE / REVENUE P.A. NO. AAGFN3644R $ % & / ASSESSEE BY SHRI BHUPENDRA SHAH $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 12/01/2016 & / DATE OF ORDER: 12/01/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 12/03/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO D ISALLOWING THE MATERIAL PURCHASE/BOGUS PURCHASES TO THE EXTENT OF RS.5,01,162/- BY THE ASSESSEE. ITA NO.2816/MUM/2015 M/S NARANG & RUCHI DEVELOPERS 2 2. DURING HEARING OF THIS APPEAL, SHRI BHUPENDRA SHAH, LD. COUNSEL FOR THE ASSESSEE, EXPLAINED THAT UNVERIFIABLE PURCHASES WERE MADE BY THE ASSESSEE TO WHICH THE TOTAL ADDITION WAS MADE BY THE LD. ASSESSING OF FICER , WHEREAS, ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE NET PROFIT WAS RESTRICTED TO 12.50% TO THE UNVERIFIABLE PURCHASES AMOUNTING TO RS.40,09,29 7/-. IT WAS CONTENDED THAT NO ADDITION IS WARRANTED. ON THE OTHER HAND, SHRI V.S. JADHAV, LD. COUNSEL FOR THE ASSESSE E, CONTENDED THAT EVEN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GRANTED MORE RELIEF TO THE ASSESSEE A S THE ASSESSEE MADE BOGUS PURCHASES/UNVERIFIABLE PURCHASE S TO THE TUNE OF RS.40,09,297/- BY CONTENDING THAT THE A DDITION MADE BY THE ASSESSING OFFICER SHOULD BE CONFIRMED. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE CLAIMED TO HAVE MADE PURCHASE S TO THE TUNE OF RS.40,09,297/-. TO EXAMINE THE GENUINENESS OF THE EXPENSES, THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) OF THE ACT TO VARIOUS PARTIES. NOTICE ISSUED TO M/S A RCHON READYMIX CON. PVT. LTD. WAS RETURNED UNSERVED BY PO STAL AUTHORITIES. THE ASSESSING OFFICER ASKED THE ASSESS EE TO PRODUCE THE PARTY FOR VERIFICATION ALONG WITH SUPPO RTING EVIDENCE. THE ASSESSEE DID NOT PRODUCE THE PARTY. THE LD. ASSESSING OFFICER MADE ADDITION. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) VARIOUS CASE L AWS WERE RELIED UPON BY THE ASSESSEE AND REMAND REPORT FROM THE ITA NO.2816/MUM/2015 M/S NARANG & RUCHI DEVELOPERS 3 ASSESSING OFFICER WAS ALSO SOUGHT. AFTER CONSIDERIN G THE TOTALITY OF FACTS, THE ELEMENT OF NET PROFIT ON SUC H UNVERIFIABLE PURCHASES, THE NET PROFIT AT THE RATE OF 12.50% WAS APPLIED AND THUS, THE ADDITION WAS REDUCED TO RS.5,01,162/- AND THE REMAINING ADDITION OF RS.35,08,135/- WAS DELETED. T HE ASSESSEE STILL AGGRIEVED AND IS IN APPEAL BEFORE TH IS TRIBUNAL. KEEPING IN VIEW, THE AFOREMENTIONED FACTS, FINDING OF THE LD. ASSESSING OFFICER AND APPLYING THE NET PROFIT RATE BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), TO AVOID FURT HER LITIGATION, BY TAKING A LENIENT VIEW, IT WILL MEET THE END OF JUSTICE, IF THE NET PROFIT IS REDUCED TO 8% IN PLAC E OF 12.50% SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 12/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 12/01/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI ITA NO.2816/MUM/2015 M/S NARANG & RUCHI DEVELOPERS 4 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI