SHIVAJI VELJI VAVIA, MUMBAI V. ITO WD 26(3)(2), MUMBAI

ITA 3156/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9428 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: BABOOLAL M OSTWAL
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 3156 /MUM/ 2017 (ASSESSMENT YEAR 20 09 - 1 0 ) SHRI SHIV JI VELJI VAVIA C/2, HIMMAT SOCIETY KRISHNA NAGAR SAKI NAKA, ANDHERI E MUMBAI - 400 072. PAN : AGSPP0711S VS. ITO WARD 26(3)(2) C/11, 5 TH FLOOR BANDRA KURLA COMPLEX BANDRA EAST MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI BABOOLAL M. OSTWAL DEPARTMENT BY SHRI RAM TIWARI DATE OF HEARING 1 8 .9. 201 7 DATE OF PRONOUNCEMENT 18 . 9 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25.01.2017 PASSED BY LD CIT(A) - 38, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION O F RS.16,84,671/ - RELATING TO BOGUS PURCHASES. 2. THE ASSESSEE IS A TRADER IN STATIONERY AND ALLIED ITEMS. CONSEQUENT TO THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT THAT CERTAIN TRADERS ARE INDULGING IN PROVIDING ACCOMMODATION BILLS WITHOUT ACT UALLY SUPPLYING MATERIALS AND UPON NOTICING THAT THE ASSESSEE HAS PURCHASED MATERIALS FROM SEVEN OF SUCH DEALERS AGGREGATING TO RS.51,41,322/ - , THE AO REOPENED THE ASSESSMENT. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) OF THE ACT, BUT MOST OF THEM WE RE RETURNED UNSERVED. THE AUTHORIZED REPRESENTATIVE AGREED FOR ADDITION OF PURCHASES MADE FROM M/S SIDDHI VINAYAK CORPORATION AMOUNTING TO RS.5,85,000/ - AND FROM M/S BLUE NILE ENTERPRISES AMOUNTING TO RS.6,05,864/ - . ACCORDINGLY THE AO DISALLOWED ENTIRE AM OUNT OF PURCHASES MADE FROM THE ABOVE SAID TWO PARTIES. IN RESPECT OF PURCHASES MADE FROM REMAINING PARTIES, THE AO SHRI SHIV JI VELJI VAVIA 2 MADE ADDITION TO THE EXTENT OF 12.50% OF THE VALUE OF PURCHASES. THE LD CIT(A) ALSO CONFIRMED THE SAME. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE TRIBUNAL. 3. THE LD A.R SUBMITTED THAT THE AUTHORIZED REPRESENTATIVE, WHO APPEARED BEFORE THE AO, HAD AGREED FOR 100% OF THE ADDITION OF PURCHASES MADE FROM M/S SIDDHI VINAYAK CORPORATION AND M/S BLUE NILE ENTERPRISES WITHOUT CONSU LTING THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSEE IS DEALING IN NUMEROUS ITEMS OF STATIONERY AND HENCE HE COULD NOT MAINTAIN DAY TO DAY STOCK REGISTER. HE SUBMITTED THAT THE ASSESSEE HAS ALREADY DECLARED G.P @ 7.2% AND HENCE THE DISALLOWANCE OF ENTIRE AMOUNT OF PURCHASES IS NOT CORRECT ACCORDINGLY HE SUBMITTED THAT THE ADDITION OF 12.50% MADE BY THE AO WAS ALSO VERY MUCH HIGHER. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS AGREED FOR ADDITION OF PURCHASES MADE FROM TWO PAR TIES AND HENCE THE SAME CANNOT BE CHALLENGED AT THIS STAGE. WITH REGARD TO THE REMAINING AMOUNT OF ADDITION, THE LD D.R SUBMITTED THAT THE AO WAS JUSTIFIED IN MAKING ADDITION AT 12.50%. 5. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. SIN CE THE AUTHORIZED REPRESENTATIVE, WHO APPEARED BEFORE THE AO, HAS AGREED FOR ADDITION OF ENTIRE AMOUNT OF PURCHASES MADE FROM THE TWO PARTIES, REFERRED ABOVE, AND SINCE THE ASSESSEE HAS FAILED TO FURNISH ANY MATERIAL, EITHER IN THE FORM OF CONFIRMATION FRO M THE ABOVE SAID PARTIES OR IN ANY OTHER MANNER, TO SHOW THAT THE PURCHASES MADE FROM THOSE TWO PARTIES WERE GENUINE WHICH WOULD RENDER THE ACCEPTANCE OF THE AR AS AGAINST THE FACTS, I HAVE NO OTHER OPTION BUT TO CONFIRM THE DISALLOWANCE OF PURCHASES MADE FROM THE TWO PARTIES REFERRED ABOVE. SHRI SHIV JI VELJI VAVIA 3 6. WITH REGARD TO THE REMAINING AMOUNT OF ADDITION, I NOTICE THAT THE ASSESSEE HAS BEEN DEALING IN NUMEROUS ITEMS OF STATIONERY AND HE HAS DECLARED G.P OF 7.2%. UNDER THESE SET OF FACTS, THE ADDITION MADE @ 12.50% APPEARS TO BE ON THE HIGHER SIDE. ACCORDINGLY I AM OF THE VIEW THAT THE ADDITION MAY BE SUSTAINED AT 6% OF THE VALUE OF REMAINING PURCHASES AND THE SAME WOULD PUT THIS ISSUE TO REST. ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT(A) IN RESPECT OF REM AINING AMOUNT OF ADDITION AND DIRECT THE AO TO SUSTAIN ADDITION TO THE EXTENT OF 6% OF THE REMAINING AMOUNT OF PURCHASES. I ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 1 8 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 1 8 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. TH E APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI