DEEPAK CHUNILAL BAJAJ, MUMBAI V. ITO 2(1), KALYAN

ITA 284/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1129 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 01-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 13-01-2017
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 287 /MUM/ 201 7 (ASSESSMENT YEAR 20 09 - 1 0 ) I.T.A. NO. 284/MUM/2017 (ASSESSMENT YEAR 2011 - 12) DEEPAK CHUNILAL BAJAJ FLAT NO. 1105 PLEASANT PARK SOCIETY YOGI H ILLS MULUND - 400 080 VS. ITO WARD 2(1) 2 ND FLOOR MOHAN PLAZA WAYALE NAGAR KHADAKPADA KALYAN WEST - 421301. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAWPB4802D ASSESSEE BY SHRI JITENDRA SINGH DEPARTMENT BY MISS BHARTI SINGH DATE OF HEARING 4 . 5. 201 7 DA TE OF PRONOUNCEMENT 4 .5 . 201 7 O R D E R THE ASSESSEE HAS FILED THESE APPEALS CHALLENGING THE ORDERS PASSED BY LD CIT(A) - 3, THANE AND THEY RELATE TO THE ASSESSMENT YEARS 2009 - 10 AND 2011 - 12. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN P ARTIALLY CONFIRMING THE ADDITION RELATING TO ALLEGED BOGUS PURCHASES IN BOTH THE YEARS. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN LUBRICATING OIL AND GREASES IN HIS PROPRIETARY CONCERN NAMED M/S DNR CORPORATION. THE REVENUE RECEIVED INF ORMATION FROM SALES TAX DEPARTMENT THAT CERTAIN DEALERS HAVE PROVIDED ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING GOODS. ON FURTHER EXAMINATION, THE REVENUE NOTICED THAT THE ASSESSEE HEREIN HAS PURCHASED GOODS FROM SOME OF THE HAWALA DEALERS TO THE TUN E OF RS.11,46,830/ - AND RS.12,13,209/ - RESPECTIVELY DURING THE YEARS RELEVANT TO AY 2009 - 10 AND 2011 - DEEPAK CHUNILAL BAJAJ 2 12. THE ASSESSEE FURNISHED THE COPIES OF BILLS AND PAYMENT DETAILS TO THE AO. HOWEVER, THE AO NOTICED THAT THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER AND COULD NOT PRODUCE TRANSPORT CHALLANS. FURTHER NOTICES ISSUED BY THE AO U/S 133(6) WERE RETURNED UN - SERVED. THE WARD INSPECTOR ALSO COULD NOT LOCATE THE PARTIES. ACCORDINGLY THE AO TOOK THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF PURCHASE TRANSACTIONS AND ACCORDINGLY DISALLOWED THE ENTIRE AMOUNT OF PURCHASES IN BOTH THE YEARS. THE LD CIT(A) NOTICED THAT THE G.P RATE DECLARED BY THE ASSESSEE WAS ALMOST CONSISTENT OVER THE YEARS. ACCORDINGLY HE TOOK THE VIEW THAT THE ASSESSEE CO ULD NOT HAVE SOLD THE GOODS WITHOUT PURCHASING THEM. ACCORDINGLY HE TOOK THE VIEW A PART OF PURCHASES CAN BE DISALLOWED AND ACCORDINGLY DISALLOWED 25% OF THE PURCHASES MADE FROM THE HAWALA DEALERS IN BOTH THE YEARS. STILL AGGRIEVED, THE ASSESSEE HAS FILE D THIS APPEAL BEFORE THE TRIBUNAL. 4. I HEARD THE PARTIES AND PERUSED THE RECORD. I NOTICE THAT THE LD CIT(A) HAS TAKEN THE VIEW THAT THE ASSESSEE COULD NOT HAVE SOLD THE GOODS WITHOUT PURCHASING THEM. EVEN THOUGH THE ASSESSEE DID NOT PRODUCE THE STOC K REGISTER, THE LD CIT(A) HAS TAKEN THE ABOVE SAID VIEW ON EXAMINING THE RATE OF GROSS PROFIT DECLARED BY THE ASSESSEE OVER THE YEARS. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE RATE OF GROSS PROFIT OF 25% ESTIMATED BY THE LD CIT(A) IS VERY MUC H ON THE HIGHER SIDE AND ACCORDINGLY PRAYED THAT THE SAME MAY BE REDUCED TO 10%. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE RATE OF GP ESTIMATED BY THE LD CIT(A) IS REASONABLE ONE. 5. HAVING HEARD RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE RATE OF GP OF 25% ESTIMATED BY THE ASSESSEE IS ON THE HIGHER SIDE, SINCE THE ASSESSEE IS A WHOLESALE TRADER AND IN THE WHOLESALE TRADING, GP RATE OF 25% IS UNLIKELY. I NOTICE THAT THE ADDITION IS BEING SUSTAINED BY THE TRIBUNAL IN SOME OF THE CASES @ 12.5%. ACCORDINGLY I AM OF THE VIEW THAT THE G.P RATE MAY BE ADOPTED AT THE DEEPAK CHUNILAL BAJAJ 3 ABOVE SAID RATE AND THE SAME WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY I MODIFY THE ORDER PASSED BY LD CIT(A) IN BOTH THE YEARS AND DIRECT THE AO TO SUSTAIN THE ADDITION TO THE EXTENT OF 12.5% OF THE ALLEGED BOGUS PURCHASES. I ORDER ACCORDINGLY. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 4 . 5 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 5 / 20 1 7 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 OR DER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI