ACIT 32(2), MUMBAI V. KALPESH P DOSHI, MUMBAI

ITA 3150/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7839 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 26-05-2015
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Assessee Lawyers: R PRASAD RAO
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO. 3150/M/2015 (ASSESSMENT YEAR: 2010 - 2011 ) ACIT - 32(2), MUMBAI. / VS. SHRI KALPESH P DOSHI, A/6, KAVITA APARTMENT, NATAK WALA LANE, BORIVALI WEST, MUMBAI - 92. ./ PAN : AFBPD7461H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. POOJA SWARUP, DR / RESPONDENT BY : SHRI R. PRASAD RAO / DATE OF HEARING : 09 .03.2017 / DATE OF PRONOUNCEMENT : 31 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 26.5.2015 IS AGAINST THE ORDER OF THE CIT (A) - 44, MUMBAI DATED 11.2.2015 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. IN THIS APPEAL, REVENUE RAISED SIX GROUNDS IN TOTO AND THEY REVOLVE AROUND THE SOLITARY ISSUE RELATES TO TH E RELIEF GRATED BY THE CIT (A) WITH REGARD TO THE ADDITION OF ENTIRE BOGUS PURCHASES AMOUNTING TO RS. 45,62,456/ - . DURING THE ASSESSMENT PROCEEDINGS, AO NOTED THAT THE ASSESSEE MADE BOGUS PURCHASES FROM THREE PARTIES VIZ (I) M/S. LAXMI TRADERS (RS. 19,45, 959/ - ); (II) M/S. ROYAL ENTERPRISES (RS. 7,78,804/ - ) AND (III) M/S. JAINEX ENTERPRISES (RS. 18,37,693/ - ). SUBSEQUENTLY, AO ALSO INITIATED PROCEEDINGS U/S 133(6) OF THE ACT IN RESPECT OF THE SAID PURCHASES. ACCORDINGLY AO MADE THE ADDITION. AGGRIEVED WIT H THE ABOVE ADDITION, ASSESSEE WAS IN APPEAL BEFORE THE CIT (A). 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) FOLLOWED THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF NICKUNJ EXIMP ENTERPRISES PVT LTD VS. ACIT VIDE WRIT PETITION NO. 2860 OF 2012, DATED 18 TH JUNE, 2014. FURTHER, RELYING ON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT 2 P. SHETH , ITA NO. 553 OF 2012, DATED 16 .1.2013 AND RESTRICTED THE ADDITION TO 7. 8% OF THE BOGUS PURCHASES. CIT (A) CONSIDERED THE AVERAGE GP OF THE ASSESSEE FOR THE AYS 2007 - 08; 2008 - 09 AND 2009 - 10. THUS, CIT (A) GRANTED RELIEF TO THE EXTENT OF 92.02%. 4. BEFORE US, LD DR FOR THE ASSESSEE EXPLAINED THE ABOVE FACTS AND SUBMITTED THAT THE CIT (A)ERRED IN NON - CONSIDERING THE FACTS RELATING TO THE NON - PAYMENT OF VAT TO THE STATEMENT GOVERNMENT, WHICH WAS CONSIDERED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH (SUPRA). IN REPLY, LD AR FOR THE ASSESSEE SUBMITTED THAT HE WILL HAVE NO OBJECTION IF THE GP IS ESTIMATED APPLYING 12.50% ON THE SO CALLED BOGUS PURCHASES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORIT IES AS WELL AS THE CITED PRECEDENTS AND THE RELEVANT MATERIAL PLACED BEFORE THE TRIBUNAL. ON HEARING BOTH THE PARTIES AND CONSIDERING THE CONCESSION OF THE LD AR FOR THE ASSESSEE, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER SHOULD APPLY THE FLAT RATE OF 12.50% OF THE SAID AMOUNT OF RS. 45,62,456/ - . ACCORDINGLY, WE ORDER. THUS, THE GROUNDS RAISED BY THE REVENUE ARE PARTLY ALLOWED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON 31 ST MARCH, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31.03 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 3 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI