ITO 33(1)(1), MUMBAI V. SHRI ASHOK KUMAR SHYAMLAL GUPTA, MUMBAI

ITA 3106/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6366 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 10-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKTAR H ANSARI
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) I.T.A. NO. 3106/MUM/2019 (ASSESSMENT YEAR 2009-10 ) ITO-33(1)(1) MUMBAI VS . SHRI ASHOK KUMAR SHYAMLAL GUPTA A/605, MILLENIUM TOWER AKURLI JAI DURGA CHS LTD. AKURLI ROAD, KRANTI NAGAR LAST BUS STOP, KANDIVALI-E MUMBAI-400 101. PAN : ADYPG5268P (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI AKTAR H. ANSARI DATE OF HEARING 14.09.2020 DATE OF PRONOUNCEMENT 14.09.2020 O R D E R THIS IS AN APPEAL BY THE REVENUE WHEREIN THE REVE NUE IS AGGRIEVED THAT THE LEARNED CIT-A HAS REDUCED THE ADDITION OF RS. 2 8,68,000/- BY SUSTAINING ONLY 12.5 % DISALLOWANCE ON ACCOUNT OF BOGUS PURCHA SES, VIDE ORDER DATED 21.1.2019 PERTAINING TO A.Y. 2009-10. 2. THE ASSESSEE IN THIS CASE IS ENGAGED INTO TRADIN G BUSINESS. THE ASSESSMENT WAS REOPENED UPON INFORMATION FROM SALES TAX DEPARTMENT THAT ASSESSEE HAS MADE PURCHASES FROM BOGUS DEALERS. THE ASSESSEE DID NOT FILE RETURN OF INCOME NOR RESPONDED TO ANY OF THE NOTICE S OF THE ASSESSING OFFICER. THE AO MADE AN EX PART ORDER MAKING 1OO% ADDITION O F THE BOGUS PURCHASE. 3. UPON ASSESSEE'S APPEAL LEARNED CIT-A HAS NOTED T HAT THE SALES HAS NOT BEEN DOUBTED. ACCORDINGLY PLACING RELIANCE UPON SEV ERAL CASE LAWS AND UP ON THE FACTS OF THE CASE HE SUSTAINED 12.5 % DISALLOWA NCE OUT OF THE BOGUS PURCHASES. 2 4. AGAINST ABOVE ORDER REVENUE IS IN APPEAL BEFORE THE ITAT. I HAVE HEARD ID DR AND PERUSED THE RECORD. I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED IT IS SETTLED LAW THAT WHEN SALES ARE NOT D OUBTED, HUNDRED PERCENT DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSIT ION IS SUPPORTED FROM HONOURABLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT 18. 6.2014). IN THIS CASE THE HONOURABLE HIGH COURT HAS UPHELD HUNDRED PERCENT AL LOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN SALES ARE NOT DOUBT ED. HOWEVER THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PU RCHASE FROM THE GREY MARKET. MAKING PURCHASES THROUGH THE GREY MARKET GI VES THE ASSESSEE SAVINGS ON ACCOUNT OF NON-PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SUCH SITUATION IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 12.5 % DISALLOWANCE OUT OF THE BOGUS P URCHASES DONE BY THE LEARNED CIT-A MEETS THE END OF JUSTICE. ACCORDINGLY I UPHOLD THE ORDER OF LEARNED CIT-A. 5. IN THE RESULT THIS APPEAL FILED BY THE REVENUE S TANDS DISMISSED 6. BEFORE PARTYING I ADD THAT IF THE ASSESSEE HAS F ILED A CROSS APPEAL OR CROSS OBJECTION AND THE SAME HAS REMAINED UNHEARD, EITHER PARTY MAY APPLY FOR RECALL OF THIS ORDER SO THAT THE APPEALS CAN BE HEARD TOGETHER. ORDER PRONOUNCED ON 14.9.2020. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 14/09/2020 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 3 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI