RAJESH NOBERT COLACO, MUMBAI V. ITO -24(3)(5), MUMBAI

ITA 2894/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9336 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: R C JAIN
• Keywords: Reopening of assessment; Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 2894 / MUM/20 17 ( ASSESSMENT YEAR : 2011 - 12 ) SHRI RAJESH NOBERT COLACO C - 102, HRISHIKESH APNA GHAR CHS LTD., SWAMI SAMRTH NAGAR ANDHERI (WEST), MUMBAI - 400053 VS. ITO 24(3)(5) MUMBAI PAN/GIR NO. ADTPC8906F APPELLANT ) .. RESPONDENT ) ITA NO. 2893/ MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) SHRI RAJESH NOBERT COLACO C - 102, HRISHIKESH APNA GHAR CHS LTD., SWAMI SAMRTH NAGAR ANDHERI (WEST), MUMBAI - 400053 VS. ACIT 24(3) MUMBAI PAN/GIR NO. ADTPC8906F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI R.C. JAIN REVENUE BY MS. N. HEMALATHA DATE OF HEARING 03 / 10 /201 7 DATE OF PRONOUNCEME NT 05 / 10 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) 36, MUMBAI DATED 25/01/2017 FOR A.Y.2010 - 11 AND 2011 - 12IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT, 1961. 2. IN THESE APPEALS, ASSE SSEE IS AGGRIEVED FOR REOPENING OF ASSESSMENT AS WELL AS FOR UPHOLDING ADDITION BY ESTIMATING PROFIT AT 1 4% OF ALLEGED BOGUS PURCHASES. ITA NO. 289 4/MUM/20 17 & 2893/MUM/2017 SHRI RAJESH NOBERT COLACO 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTS OF THE CASE ARE THAT A SSESSEE FILED RETURN OF INCOME FOR A.Y.2011 - 12 BY DECLARING TOTAL INCOME OF RS.22,81,740 / - ON 11.10.2010. PROCESSING WAS MADE U/S 143(1) OF THE ACT. THE CASE OF THE APPELLANT WAS REOPENED FOR THE REASON THAT INTIMATION VIDE LET TER BEARING NO. DGIT(LNV.)/CORR.FIELD/ 2O13 - 14 DATED 26 / 12 / 2 0 13 WAS RECEIVED IN THE OFFICE OF THE AO FROM THE OFFICE OF THE DIRECTOR GENERAL OF INCOME TAX ( INV.), MUMBAI WHEREIN IT WAS STATED THAT THE INFORMATION WAS RECEIVED FROM SALES TAX DEPARTMENT, GO VT. OF MAHARASHTRA REGARDING CASES INVOLVING BOGUS PURCHASES/HAWALA TRANSACTION. THE DATA CONTAINS THE DETAILS OF TRANSACTIONS OF EACH BENEFICIARY WITH BOGUS BILLER, THEIR TIN AND PAN DETAILS AND THE PAN DETAILS OF THE BENEFICIARIES. FROM THE DATA ON VERIF ICATION, IT WAS FOUND THAT SHRI RAJESH N. COLACO DURING F.Y. 2009 - 10 HAS ACQUIRED SOME BOGUS PURCHASE BILLS AMOUNTING TO RS. 54,14,625 / - . AFTER HAVING THE DETAILED DISCUSSION IN PARA - 3, THE AO HELD AS UNDER: - IN THE LIGHT OF THE FOREGOING AND AFTER CAREFU L CONSIDERATION OF THE CASE, I HOLD THAT THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES IS TO BE BROUGHT TO TAX. SINCE DURING THE YEAR THE ASSESSEE HAS EARNED GROSS PROFIT @ 14%, 1 ESTIMATE THE GROSS PROFIT AT THE RATE 14% OF THE UNPROVED PURCHASES OF RS.1O, 68,30O/ - . THE ADDITION WORKS OUT AT RS1 ,49,562/ - WHICH IS HEREBY DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO. 289 4/MUM/20 17 & 2893/MUM/2017 SHRI RAJESH NOBERT COLACO 3 6. IT WA S ARGUED BY LEARNED AR THAT ASSESSEE HAD SHOWN GROSS PROFIT RATE AT 14%, THEREFORE, FURTHER ESTIMATING PROFIT AT 14% IS VERY MUCH EXCESSIVE. 7. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND TH AT DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS ALREADY DECLARED GP OF 14%. THEREFORE, KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS BUSINESS VIS - - VIS, GP OFFERED BY THE ASSESSEE, I DIRECT THE AO TO RESTRICT THE ADDITION BY ESTIMATING FURTHER PROF IT OF 8% OF SUCH BOGUS PURCHASES. I DIRECT ACCORDINGLY. 8. THE FACTS AND CIRCUMSTANCES IN THE A.Y.2010 - 11 ARE PARAMETERIA, FOLLOWING THE REASONING GIVEN HEREINABOVE, I DIRECT THE AO TO RESTRICT THE ADDITION BY ESTIMATING FURTHER PROFIT OF 8% OF BOGUS PURCH ASES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 05 / 10 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 05 / 10 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPE LLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//