ACIT - 26(1), MUMBAI V. FARHANA NISAR SIDDIQUI, MUMBAI

ITA 2831/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1703 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV K GUBANGOTRA LD DR
• Keywords: Bogus purchase
• Section: 147; 144

Judgement Text

ITA.NO.2831/MUM/2017 FARHANA NISAR SIDDIQUI ASSESSMENT YEAR-2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO.2831/MUM/2017 ( ASSESSMENT YEAR: 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX-26(1) ROOM NO.701, C-11, 7 TH FLOOR, B.K.C, BANDRA (E) MUMBAI-400 051 VS. FARHANA NISAR SIDDIQUI 7, HANIF SETHKI CHAWL QURESHI NAGAR HILL, KURLA (E) MUMBAI-400 070 ! ' PAN/GIR NO. BLIPS-6122-D ( !# APPELLANT ) : ( $%!# RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : RAJIV K. GUBANGOTRA, LD. DR & DATE OF HEARING : 06/08/2018 '() / DATE OF PRONOUNCEMENT : 05/09/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-38 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-38/ACIT.26(1)/IT.527/2015-16 DATED 30/12/2016 QUA CERTAIN RELIEF PROVIDED TO THE ASSESSEE. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJOURNMENT APPL ICATION IS ON ITA.NO.2831/MUM/2017 FARHANANISAR SIDDIQUI ASSESSMENT YEAR-2011-12 2 RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE- OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEA RING LD. DEPARTMENTAL REPRESENTATIVE, SHRI RAJEEV K. GUBANGOTRA. 2. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-26(1), MUMBAI [AO] U/S 1 44 READ WITH SECTION 147 OF THE INCOME TAX ACT,1961 ON 28/01/2016 WHEREIN THE ASSESSEE HAS BEEN SADDLED WITH CERTAIN ADDITIONS, O UT OF WHICH FOLLOWING ADDITIONS ARE THE SUBJECT MATTER OF DISPUTE BEFORE US:- NO. NATURE OF ADDITION AMOUNT (RS.) 1. DISALLOWANCE OF BOGUS PURCHASES 46,68,492/- 2. DISALLOWANCE OUT OF CONVEYANCE EXPENSES, TELEPHONE EXPENSES, STAFF WELFARE & OTHER EXPENSES 32,37,895/- THE ADDITION OF BOGUS PURCHASES WAS MADE SINCE THE ASSESSEE FAILED TO SUBSTANTIATE THE PURCHASES MADE FROM FIVE DEALERS, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN THE QUANTUM ASSESSME NT ORDER. THE DISALLOWANCE AGAINST EXPENSES CLAIMED BY THE ASSESS EE IS ADHOC DISALLOWANCE OF 30% FOR WANT OF SATISFACTORY DETAILS / DOCUMENTA RY EVIDENCES. 3. THE LD. CIT(A), RELYING UPON THE DECISION OF HON BLE GUJARAT HIGH COURT IN CIT VS. BHOLANATH POLY FAB PVT LTD. 355 ITR 290 ESTIMATED THE ADDITION AGAINST ALLEGED BOGUS PURCHASES @ 12.5%. THE ADHOC DISALLOWANCE AS ESTIMATED BY LD.AO WAS REDUCED TO 1 0% OF CASH EXPENSES OF RS.37.27 LACS AS CLAIMED BY THE ASSESSE E. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS SUPPORTED THE STAND TAKEN BY LD. AO. ITA.NO.2831/MUM/2017 FARHANANISAR SIDDIQUI ASSESSMENT YEAR-2011-12 3 4. UPON DUE CONSIDERATION, WE FIND THAT SALES TURNO VER OF THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE AND T HERE COULD BE NO SALE WITHOUT PURCHASE OF MATERIAL. THEREFORE, THE P ROFITS WERE RIGHTLY ESTIMATED @12.5% TO ACCOUNT FOR PROFIT ELEMENT EMBE DDED IN THE ALLEGED BOGUS PURCHASES TRANSACTIONS CARRIED OUT BY THE ASSESSEE . THEREFORE, THE STAND OF LD. CIT(A), IN THIS REGARD, DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. 5. SIMILARLY, LD. CIT(A), AFTER CONSIDERING THE FAC TUAL MATRIX, RESTRICTED THE ADHOC EXPENSE DISALLOWANCE TO 10% OF CASH EXPENSES INCURR ED BY THE ASSESSEE, WHICH IS FAIR AND JUSTIFIED UNDER THE CIRCUMSTANCES. 6. IN NUTSHELL, THE REVENUES APPEAL STAND DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH SEPTEMBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ K UMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER *& MUMBAI; DATED : 05.09.2018 SR.PS:-THIRUMALESH ! COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - -) *& / DR, ITAT, MUMBAI 6. , ./0 & GUARD FILE ' / BY ORDER, # '$% (DY./ASSTT.REGISTRAR) *& / ITAT, MUMBAI