ACIT - 28(1), MUMBAI V. ANAND PHULCHAND VAISHYA, MUMBAI

ITA 2998/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4879 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Bogus purchase
• Section: 69C; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.2998/M/2019 ASSESSMENT YEAR: 2011-12 ACIT-28(1), ROOM NO.306, 3 RD FLOOR, 6 TH TOWER, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 VS. MR. ANAND PHULCHAND VAISHYA, C-4/2-2, SECTOR 28, SHREE GANESH CHS LTD., NERUL, NAVI MUMBAI, MUMBAI PAN: ADPPV5325F (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI BRAJENDRA KUMAR, D.R. DATE OF HEARING : 28.12.2020 DATE OF PRONOUNCEMENT : 08.01.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 08.02.2019 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET, WE WOULD LIKE TO MENTION THAT NEI THER ASSESSEE NOR HIS AUTHORISED REPRESENTATIVE WAS PRES ENT WHEN THE CASE WAS CALLED UP FOR HEARING, NOR ANY ADJOURN MENT APPLICATION WAS RECEIVED. THEREFORE, WE ARE DISPOS ING OF THIS APPEAL AFTER HEARING THE LD. D.R. AND AFTER CONSID ERING THE MERIT OF THE CASE. ITA NO.2998/M/2019 MR. ANAND PHULCHAND VAISHYA 2 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) PARTLY DELETING THE ADDITION AT 87.50% O F THE BOGUS PURCHASES AS AGAINST 100% DISALLOWANCE MADE BY THE AO. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A CO NTRACTOR AND DURING THE YEAR FILED RETURN OF INCOME ON 24.09.201 1 DECLARING INCOME OF RS.26,67,410/-. THEREAFTER, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUIN G NOTICE UNDER SECTION 148 OF THE ACT ON 03.09.2014 ON THE G ROUND THAT ASSESSEE IS BENEFICIARY OF HAWALA BOGUS PURCHASES. ACCORDINGLY, DURING THE ASSESSMENT PROCEEDINGS THE AO CALLED UPO N THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES FROM 8 PARTIES FROM WHOM THE TOTAL PURCHASES OF RS.65,48,1 71/- WERE MADE. THE AO AFTER RECORDING A FINDING THAT ASSESS EE HAS NOT PURCHASED THE SAID GOODS FROM THE SUPPLIER FROM WHO M THE BILLS WERE OBTAINED AND THESE PURCHASES WERE MADE FROM OT HER PARTIES DETAILS WHEREOF SUCH AS NAMES AND ADDRESSES , MODE OF PAYMENT WERE NOT DISCLOSED IN THE BOOKS AND FINALLY ADDED THE ENTIRE AMOUNT OF INCOME TO THE ASSESSEE UNDER SECTI ON 69C OF THE ACT BY FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 VIDE ORDER DATED 28.02.2015. 5. THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITION EQUAL TO 12.5% OF THE TOTAL BOGUS PURCHASES BY FOLLOWING THE DECISION OF CIT VS. SIMI T P. SHETH (2013) 356 ITR 451 (GUJ) BY HOLDING THAT THE ENTIRE PURCHASES CAN NOT BE TAXED BUT THE ONLY PROFIT ELEMENT EMBEDD ED IN THE PURCHASES WOULD BE BROUGHT TO TAX AND THUS ALLOWED THE APPEAL PARTLY. ITA NO.2998/M/2019 MR. ANAND PHULCHAND VAISHYA 3 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE OBSERVE THAT THE ORDER PASSED BY THE LD. CIT(A) IS QUITE REASONED WHICH HAS BEEN PASSED AFTER FOLLOWIN G THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. SIMIT P. SHETH (SUPRA) WHEREIN IT HAS BEEN HELD THA T IN CASE OF BOGUS PURCHASES ONLY THE PROFIT ELEMENT CAN BE BROU GHT TO TAX. ACCORDINGLY, WE ARE INCLINED TO UPHOLD THE ORDER OF LD. CIT(A) AND CONSEQUENTLY THE APPEAL OF THE REVENUE IS DISMI SSED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2021. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 08.01.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.