RAKESH M. MEHTA, MUMBAI V. ITO 19(3)(1), MUMBAI

ITA 2920/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8041 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Assessee Lawyers: RAHUL R SARDA
• Keywords: Reopening of assessment; Bogus purchase; Depreciation; Charitable institution; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion
• Section: 133(6); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , A M AND SHRI PAWAN SINGH, JM ./ I.T.A. NO S . 2920 & 2921 /MUM/2017 ( / ASSESSMENT YEAR: 2010 - 11 & 2011 - 1 2 ) A ND ./ C.O. NO. 223/MUM/2017 (ARISING OUT OF ITA NO. 3325/MUM/2017) ( / ASSESSMENT YEAR: 2011 - 12 ) RAKESH M. MEHTA 18/5, VIJAY APARTMENT, 12 TH KHETWADI LANE, MUMBAI - 400 004 / VS. INCOME TAX OFFICER - 19(3)(1) MUMBAI ./ ./ PAN/GIR NO. AGIPM 6445 K ( ASSESSEE ) : ( R EVENUE ) & ./ I.T.A. NO S . 3325/MUM/2017) ( / ASSESSMENT YEAR: 2011 - 12 ) INCOME TAX OFFICER - 19(3)(1) MUMBAI / VS. RAKESH M. MEHTA 18/5, VIJAY APARTMENT, 12 TH KHETWADI LANE, MUMBAI - 400 004 ./ ./ PAN/GIR NO. AGIPM 6445 K ( REVENUE ) : (ASSESSEE) ASSESSEE BY : SHRI RAHUL R. SARDA RE VENUE BY : SHRI T. A. KHAN / DATE OF HEARING : 21.09.2017 / DATE OF PRONOUNCEMENT : 11.12 .2017 2 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 / O R D E R PER SHAMIM YAHYA , A. M.: THESE ARE APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). FOR ASSESSME NT YEAR 2011 - 12, THE REVENUE HAS ALSO FILED CROSS APPEAL AND FOR THE SAME YEAR THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND FOR ASSESSMENT YEAR 2010 - 11. ITA NO. 2920/MUM/201 7 (A.Y. 2010 - 11) 2. THE ISSUE RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING DISALLOWANCE OF 6.5% OF BOGUS PURCHASE. IN THIS C ASE, THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2010 - 11 ON 19.9.2010 DECLARING TOTAL INCOME OF RS.9,15,521/ - . THE RE TURN WAS PROCESSED U/S. 143(1) OF THE I. T. ACT. SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DGIT(INV.) WHO IN TURN RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT ABOUT SOME ACCOMMODATION ENTRY PROVIDERS. THE INFORMATION IN POSSES SION OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES FOR PURCHASES TO THE TUNE OF RS.3,74,86,467/ - FROM 9 PARTIES AS UNDER: SR. NO. NAME OF THE PARTY AMOUNT 1 HARSHIL FERROMET PVT. LTD. 87,03,345/ - 2 KOTSONS IMPEX PVT. L TD. 2,44,352/ - 3 HANS ENTERPRISES 72,26,481/ - 4 MAHAVEER METAL CORPORATION 5,93,403/ - 5 KHUSHAL MERCANTILE PVT. LTD. 11,00,299/ - 6 AMAN IMPEX 36,84,764/ - 3 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 7 S. K. ENGINEERING CO. 50,16,073/ - 8 CHAIR IMPEX TRADING PT. LTD. 54,04,209/ - 9 KANK GURU TUBE S & METALS PVT. LTD. 57,86,541/ - TOTAL 3,74,86,467/ - 3. ON THE BASIS OF THIS INFORMATION, THE ASSESSING OFFICER ISSUED NOTICE U/S. 148 AND REOPENED THE CASE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE SUPPORTING DOCUMENTS FOR PURCHASES MADE FROM THE ABOVE NON GENUINE PARTIES AND ALSO THE SUPPORTING DOCUMENTS FOR CORRESPONDING SALES AFFECTED. THE ASSESSEE COULD ONLY FURNISH THE ADDRESSES OF THE ABOVE MENTIONED PARTIES. THE ASSESSING OFFICER IN ORDER TO VERIFY THE GENUINENESS OF THE PURCHASES ISSUED NOTICES U/S. 133(6) TO THE PURCHASE PARTIES BUT THE SAME WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH THE REMARKS NOT KNOWN OR LEFT. THE ASSESSING OFFICER HELD THAT THE ONUS IS ON THE AS SESSEE TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE CLAIM WHICH THE ASSESSEE FAILED TO DO. THE ASSESSEE COULD NOT FILE THE VITAL DOCUMENTS SUCH AS DELIVERY CHALLANS, TRANSPORT RECEIPT, OCTROI RECEIPTS, GOODS INWARD REGISTER, ETC. IN VIEW OF THIS, THE A SSESSING OFFICER FELT THAT THE PURCHASES SHOWN BY THE ASSESSEE WERE NOT GENUINE AND AFTER REJECTING THE BOOKS OF ACCOUNTS U/S. 145(3), HE MADE AN ADDITION OF 12.5% OF THE TOTAL ALLEGED BOGUS PURCHASES, I.E., RS.46,85,809/ - . 5. AGAINST THE ABOVE ORDER, TH E ASSESSEE APPEALED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING BOTH THE VALIDITY OF THE RE OPENING AND MERITS OF ADDITION, CONFIRMED THE REOPENING BY HOLDING AS UNDER: 4 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 4.3 SECTION 147 FOR THE PURPOSE IS REPRODUCED AS UNDER: 'IF THE ASS ESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTION 148 TO 153, ASSESS OR REASSESS, SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHIC H HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED ( HE REAFTER IN THIS SECTION AND IN TIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR.' 4.3. THE SECTION MERELY SAYS THAT THE AO HAS TO HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. REASON TO BELIEVE CAN BE ON THE BASIS OF ANY INFORMATION WHICH COMES TO HIS POSSESSION OR KNOWLEDGE. THIS INFORMATION IS MORE THAN ENOUGH FOR ANY REASONABLE PERSON TO FORM A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. FURTHER, THE INFORMATION IS NOT ANONYMOUS INFORMATION BUT AU THENTICATED INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE SAME DEPARTMENT. THE AO OR ANY REASONABLE PERSON IN HIS PLACE WOULD NOT IGNORE OR OVER LOOK THIS KIND OF INFORMATION. IF THE AO IS NOT SATISFIED WITH THE REASON, HE WOULD NOT HAVE ISSUED N OTICE U/S . 148. THE VERY FACT THAT REASONS ARE RECORDED AND NOTICE U/S.148 IS ISSUED GOES TO SHOW THAT THE AO HAS APPLIED HIS MIND AND SATISFIED HIMSELF ABOUT THE REOPENING OF THE CASE. THE REASONS RECORDED ARE NOT VAGUE AND SCANTY BUT PRECISE AND CONCRETE. IN THIS CASE, THE INFORMATION HAS COME FROM THE INVESTIGATION WING OF THE SAME DEPARTMENT WITH SUPPORTING STATEMENTS AND MODUS OPERANDI. THERE IS NO REASON OR OCCASION TO DISBELIEVE THIS INFORMATION. BESIDES, WHAT THE ACT ENVISAGES IS THAT THE AO SHOULD O NLY HAVE A REASON TO BELIEVE TO REOPEN A CASE. HE NEED NOT ESTABLISH BEYOND DOUBT THAT THERE IS ESCAPEMENT BEFORE ISSUING THE NOTICE. THIS CAN BE DONE AT THE TIME OF ASSESSMENT BUT NOT AT THE TIME OF ISSUE OF NOTICE. RELIANCE IS PLACED ON THE FOLLOWING JUD GEMENTS : 1) ROHILKHAND EDUCATIONAL CHARITABLE TRUST VS. CCIT AND OTHERS 365 ITR 233(A LL .) WHEREIN THE HON'BLE HIGH COURT HELD AO SHOULD HAVE RELEVANT AND CREDIBLE MATERIAL WITH HIM TO FORM REQUISITE REASON TO BELIEVE THAT INCOME OF ASSESSEE HAS ESCAPED ASSESSMENT. MATERIAL AVAILABLE ON RECORD HAS RATIONAL CONNECTION AND RELEVANT BEARING ON SUCH FORMATION OF BELIEF FOR ISSUING VALID NOTICES FOR RE - ASSESSMENT - SUFFICIENCY OR CORRECTNESS OF MATERIAL WAS NOT TO BE CONSIDERED AT THIS STAGE. 2) SUN PHARMACEUT ICALS INDUSTRIES LTD. VS. DCIT 353 ITR 474 (GUJ.) WHERE THE HON'BLE HIGH COURT HELD FORMATION BY BELIEF BY AO IS ESSENTIALLY WITHIN HIS SUBJECTIVE SATISFACTION - AT THE STAGE OF ISSUE OF NOTICE, ONLY QUESTION 5 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 IS WHETHER T HERE WAS RELEVANT MATERIAL ON WHICH REASONABLE PERSON COULD HAVE FORMED R EQUISITE BELIEF. 3) INDU STRIES LTD. VS. ITO 362 ITR 542 (GUJ.) WHERE THE HON'BLE HC HELD IF A PARTICULAR ISSUE I S BROUGHT TO THE NOTICE OF THE AO. BY AUDIT PARTY AND AO OF HIS /HER APPLICATION OF MIND FINDS THIS GROUN D AS VALID, REOPENING OF ASSESSMENT CANNOT BE QUASHED MERELY BECAUSE SUCH GROUND WAS BROUGHT TO THE NO TICE OF AO BY THE AUDIT PARTY. 4.3.1. THE LD. COUNSEL FOR THE APPELLANT ALSO RELIED ON THE JUDGMENT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561(5C) AND CIT VS. AMITABH BACHCHAN ITA NO.4646 OF 2010). IN THIS CASE, THE RETURN OF INCOME WAS PROCESSED U/S. 143(1} AND NO SCRUTINY ASSESSMENT WAS COMPLETED BEFORE THE ISSUE OF NOTICE U/S.148. SO THERE IS NO QUESTION OF CHANGE OF OPINION BY THE AO. 4.3.2. THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT, LTD. 291 ITR 500 HELD THAT ' IF THE AO FOR WHATEVER REASON, HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT CONFERS JURISDICTION TO RE - OPEN THE ASSESS MENT, WHERE THE CASE IS NOT COVERED BY PROVISO TO SECTION 147, INTIMATION U/S.143(1} CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT AND THERE BEING NO ASSESSMENT ORDER U/S.143(1), THE QUESTION .OF CHANGE OF OPINION DOES NOT ARISE. THE HON'BLE SUPREME COURT FURTHER HELD THAT THE WORD L REASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, 'IF CAN BE SAID TO HAVE REASON TO BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT AO SHOULD FINALLY ASCERTAIN THE FACT WITH LEGAL EVIDENCE OR CONCLUSION.' 4.3.3. IN VIEW OF THE ABOVE, THE ASSESSMENT PROCEEDINGS INITIATED U/S. 147 OF THE I.T. ACT ARE HELD TO BE PERFECTL Y LEGAL AND VALID . 6 . AS REGARDS THE MERITS OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS SIMIT P . SHETH [2013] 356 ITR 451 (GUJ.) , WHEREIN 12.5% ADDITIONAL BOGUS PU RCHASED WERE CONFIRMED. HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED BY DIRECTING THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 6.5% OF THE ALLEGED BOGUS PURCHASES. 6 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 7. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT CREDIBLE AND COGENT INFORMATION WAS RECEIVED IN THIS CASE BY THE ASSESSING OFFICER THAT CERTAIN ACCOMMODATION ENTRY PROVIDER/BOGUS SUPPLIERS WERE BEING USED BY CERTAIN PARTIES TO OBTAINED BO GUS BILLS. THE ASSESSEE WAS FOUND TO HAVE TAKEN ACCOMMODATION ENTRY/BOGUS PURCHASE BILLS DURING THE CONCERNED ASSESSMENT YEAR FROM DIFFERENT PARTIES. BASED UPON THIS INFORMATION ASSESSMENT WAS REOPENED. THE CREDIBILITY OF INFORMATION RELATING TO REOPENING REMAINS UN - ASSAILED. IN SUCH FACTUAL SCENARIO, THE ASSESSING OFFICER HAS MADE THE NECESSARY ENQUIRY. THE ISSUE OF NOTICE TO ALL THE PARTIES HAVE RETURNED UNSERVED. ASSESSEE HAS NOT BEEN ABLE TO PROVIDE ANY CONFIRMATION FROM ANY OF THE PARTY. ASSESSEE HAS A LSO NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. NECESSARY EVIDENCE RELATING TO TRANSPORTATION OF THE GOODS WAS ALSO NOT ON RECORD. IN THIS FACTUAL SCENARIO, IT IS AMPLY CLEAR THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION OF DOCUMEN TS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS IS BOGUS AND NON - EXISTENT. 9 . THE SALES TAX DEPARTMENT IN ITS ENQUIRY HAS FOUND THE PARTIES TO BE PROVIDING BOGUS ACCOMMODATION ENTRIES. THE ASSESSING OFFICER ALSO ISSUED NOTICES TO THESE PARTIES AT THE ADDRESSES PROVIDED BY THE ASSESSEE. ALL THESE NOTICES HAVE RETURNED UNSERVED. ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. NEITHER THE ASSESSEE HAS BEEN ABLE TO PRODUCE ANY CONFIRMATION FROM THESE PARTIES . IN SUCH 7 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 CIRCUMSTANCES, THERE IS NO DOUBT THAT THESE PARTIES ARE NON - EXISTENT. WE FIND IT FURTHER STRANGE THAT ASSESSEE WANTS THE REVENUE TO PRODUCE ASSESSEES OWN VENDORS, WHOM THE ASSESSEE COULD NOT PRODUCE. THE PURCHASE BILLS FROM THESE NON - EXISTENT/BO GUS PARTIES CANNOT BE TAKEN AS COGENT EVIDENCE OF PURCHASES. IN LIGHT OF THE OVERWHELMING EVIDENCE, THE REVENUE AUTHORITIES CANNOT PUT UPON BLINKERS AND ACCEPT THESE PURCHASES AS GENUINE. THIS PROPOSITION IS DULY SUPPORTED BY HONBLE APEX COURT DECISION I N THE CASE OF SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC) AND CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 (SC). IN THE PRESENT CASE, THE ASSESSEE WANTS THAT THE UNASSAILABLE FACT THAT THE SUPPLIERS ARE NON - EXISTENT AND, THUS, BOGUS SHOULD BE IGNORED AND O NLY THE DOCUMENTS BEING PRODUCED SHOULD BE CONSIDERED. THIS PROPOSITION IS TOTALLY UNSUSTAINABLE IN LIGHT OF HONBLE APEX COURT DECISIONS. 10 . WE FURTHER FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT. 18.6.2014) HAS UPHELD 100% ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN THE SALES HAVE NOT BEEN DOUBTED. HOWEVER, THE FACTS OF THAT CASE WERE DIFFERENT. FURTHERMORE, THE SALES IN THAT CASE WERE BASICALLY TO GOVERNMENT DEPARTMENTS. HENCE, THE RATIO FROM THIS DECISION IS NOT FULLY APPLICABLE ON THE FACTS OF THE CASE. 11 . IN THESE CIRCUMSTANCES, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF TAX APPEAL NO. 240 OF 2003 IN TH E CASE OF N K INDUSTRIES VS. DY. CIT VIDE ORDER DATED 20.06.2016, WHEREIN 100% OF 8 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 THE BOGUS PURCHASES WAS HELD TO BE ADDED IN THE HANDS OF THE ASSESSEE AND TRIBUNALS RESTRICTION OF THE ADDITION TO 25% OF THE BOGUS PURCHASES WAS SET ASIDE. IT WAS EXPOUNDED THAT WHEN PURCHASE BILLS HAVE BEEN FOUND TO BE BOGUS, 100% DISALLOWANCE WAS REQUIRED. THE SPECIAL LEAVE PETITION AGAINST THIS ORDER ALONG WITH OTHERS HAS BEEN DISMISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 16.1.2017. 12. WE FURTHER NOTE THAT HONBL E RAJASTHAN HIGH COURT HAS SIMILARLY TAKEN NOTE OF DECISIONS OF THE APEX COURT ON THE ISSUE OF BOGUS PURCHASES IN THE CASE OF CIT JAIPUR VS SHRUTI GEMS IN ITA NO. 658 OF 2009. THE HONBLE HIGH COURT HAS REFERRED TO THE DECISION OF CIT JAIPUR VS. ADITYA GEM S, D. B . IN ITA NO. 234 OF 2008 DATED 02.11.2016, WHEREIN THE HONBLE COURT HAD INTER ALIA HELD AS UNDER: 'CONSIDERING THE LAW DECLARED BY THE SUPREME COURT IN THE CASE OF VIJAY PROTEINS LTD. VS. COMMISSIONER OF INCOME TAX, SPECIAL LEAVE TO APPEAL (C) NO .8956/2015 DECIDED ON 06.04.2015 WHEREBY THE SUPREME COURT HAS DISMISSED THE SLP CONFIRMED THE ORDER DATED 09.12.2014 PASSED BY THE GUJARAT HIGH COURT AND OTHER DECISIONS OF THE HIGH COURT OF GUJARAT IN THE CASE OF SANJAY OILCAKE INDUSTRIES VS. COMMISSIONE R OF INCOME TAX (2009) 316 ITR 274 (GUJ) AND N.K. INDUSTRIES LTD. VS. DY. C.I.T., TAX APPEAL NO.240/2003 DECIDED ON 20.06.2016, THE PARTIES ARE BOUND BY THE PRINCIPLE OF LAW PRONOUNCED IN THE AFORESAID THREE JUDGMENTS. 13. HOWEVER, WE NOTE THAT THIS IS NOT AN APPEAL BY THE REVENUE. HENCE, IT WILL NOT BE APPROPRIATE TO TAKE AWAY THE RELIEF ALREADY GRANTED BY THE REVENUE TO THE ASSESSEE. HENCE, WE CONFIRM THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS). 14. IN THE RESULT THIS APPEAL FILED BY THE ASS ESSEE STANDS DISMISSED. 9 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 ITA NO. 292 1 & 3325 /MUM/2017 AND CO NO. 223/MUM/2017 (A.Y. 201 1 - 1 2 ) 15. THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS), PERTAINING TO THE ASSESSMENT YEAR 2011 - 12. 16. THE ISSUE RAISED IN THE ASSESSEES APPEAL IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING 6.5% ADDITION FOR BOGUS PURCHASE. IN THE CROSS APPEAL FOR THE SAME YEAR, THE REVEN UE HAS RAISED THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING 6.5% OF THE BOGUS PURCHASE IN PLACE OF 12.5% DONE BY THE ASSESSING OFFICER. IN THE CROSS OBJECTION, THE ASSESSEE HAS URGED THAT SINCE THE REVENUE HAS NOT FIL ED APPEAL FOR ASSESSMENT YEAR S 2010 - 11 AND 2007 - 08 FOR IDENTICAL FACTS, THIS APPEAL COULD NOT HAVE BEEN FILE D AND IS NOT MAINTAINABLE. FURTHER, IT HAS BEEN URGED THAT IN SIMILAR CASE, ITAT HAD UPHELD ONLY 2% ADDITIONS IN ITA NO. 647/MUM/2017 VIDE ORDER DAT ED 12.5.2010. HENCE, THE ADDITION SHOULD BE RESTRICTED TO 2 % OF THE ALLEGED BOGUS PURCHASE. 17. WE FIND THAT FACTS FOR ASSESSMENT YEAR 2011 - 12 ARE SIMILAR WITH THAT OF ASSESSMENT YEAR 2010 - 11 DEALT WITH ABOVE BY US . IN THE ABOVE ORDER FOR ASSESSMENT YEAR 2010 - 11, WE HAVE REFERRED TO THE HONBLE HIGH COURT DECISION AGAINST WHICH SLP HAS ALSO BEEN DISMISSED BY THE HONBLE APEX COURT, WHEREIN 100% DISALLOWANCE FOR BOGUS PURCHASE WAS CONFIRMED AS AGAINST 25% DONE BY THE ASSESSING OFFICER. HOWEVER IN THE AFORE - SAID APPEAL, WE HAVE CONFIRMED THE ORDER OF THE LD. 10 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 COMMISSIONER OF INCOME TAX (APPEALS), WHEREIN 6.5% OF BOGUS PURCHASE ADDITION WAS SUSTAINED, AS THAT WAS ONLY AN APPEAL BY THE ASSESSEE AND NOT THE APPEAL BY THE REVENUE HAD BEEN PREFERRED. THOUGH IN THE PRESENT ASSESSMENT YEAR, THE REVENUE HAS PREFERRED AN APPEAL AGITATING THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE CONFIRMED 12.5% ADDITION FOR BOGUS PURCHASE DONE BY THE ASSESSING OFFICER. IN OUR CONSIDERED OPINION, SINCE THE REVENUE HAS NOT FILED APPEAL AGAINST THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ORDER FOR ASSESSMENT YEAR 2010 - 11, WE HAVE UPHELD HIS ORDER FOR ASSESSMENT YEAR 2010 - 11 IN THE PRESENT ASSESSMENT YEAR ALSO. ACCORDINGLY, FOLLOWING THE SAME, WE DIRECT THAT 6. 5 % DISALLO WANCE FOR BOGUS PURCHASE BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SERVES THE INTEREST OF JUSTICE. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES (SUPRA) HAS ALSO EXPOUNDED THAT WHEN SALES ARE NOT DOUBTED , 100% DISALLOW ANCE O F PURCHASE IS NOT FEASIBLE. ALTHOUGH F ACT OF THE CASE WERE A LITT LE DIFFERENT AS REFERRED ABOVE. 18. AS REGARDS THE GROUND RAISED BY THE ASSESSEE THAT ONLY 2% DISALLOWANCE SHOULD BE DONE FOLLOWING THE TRIBUNALS DECISION WE ARE OF THE CONSIDERED OPI NION THAT I N OUR ORDER WE HAVE FOLLOWED HONBLE HIGH COURT DECISION. I N THE HIERARCHY OF JUDICIAL PRECEDENCE, THE DECISION OF THE HIGHER COUR T PREVAIL OVER THE TRIBUNAL DECISION. HENCE , WE DISMISS THESE GROUNDS RAISED BY THE ASSESSEE. 11 ITA NO S . 2920 , 2921 & 3325 /MUM/2017 C.O. NO.223/MUM/2017 19. IN THE R ESULT, ALL THE APPEALS, CROSS OBJECTION AND AD DITIONAL GROUND STAND DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 11.12.2017 SD/ - SD/ - ( PAWAN SINGH ) (S HAMIM YAHYA ) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 11.12.2017 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI