M/s Shradha Apparels Wordwide, Mumbai V. ACIT 21(3), Mumbai

ITA 3257/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6470 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Bogus purchase

Judgement Text

, ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 3255 / /201 9 ((. . 2009-10 ) ITA NO. 3255/MUM/2019 (A.Y.2009-10) . 3256 / /201 9 ((. . 2010-11 ) ITA NO. 3256/MUM/2019 (A.Y.2010-11) . 3257 / /201 9 ((. . 2011-12 ) ITA NO. 3257/MUM/2019 (A.Y.2011-12) SHRADHA APPARELS WORLDWIDE, 201, JOGANI INDUSTRIAL ESTATE, 541, SENAPATI BAPAT MARG, DADAR, MUMBAI 400 028 / VS. INCOME TAX OFFICER 18(2)(4), NOW ACIT CIRCLE 21(3), ROOM NO.209, 2 ND FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL, MUMBAI 400 012 PAN/GIR NO:ABPPS5542 ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : MS KAVITA P. KAUSHIK / DATE OF HEARING : 15/09/2020 / DATE OF PRONOUNCEMENT : 17/09/2020 / ORDER THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 33, MUMBAI [ IN SHORT THE CIT(A)] DATED 28/02/2019, COMMON FOR THE ASSESSMENT YEARS 2 009-10, 2010-11 AND 2011-12. THE COMMON ISSUE INVOLVED IN ALL THE THRE E APPEALS IS ADDITION ON ACCOUNT OF BOGUS PURCHASES. 2 ITA NO .3255 TO 3257/MUM/2019 (A.Y.2009-10 TO 2011- 12) 2. THE ASSESSEE IS ENGAGED IN MANUFACTURING AND EXP ORT OF READYMADE GARMENTS. DURING THE IMPUGNED ASSESSMENT YEARS THE ASSESSING OFFICER MADE ADDITION HOLDING THAT THE ASSESSEE HAS OBTAINED BOG US PURCHASE BILLS FROM HAWALA DEALERS DECLARED BY THE SALES TAX DEPARTMENT , GOVERNMENT OF MAHARASHTRA. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES IN THE THREE ASSESSMENT YEARS AS UNDER:- ASSESSMENT YEAR BOGUS PURCHASE ADDITION MADE BY THE A.O. (IN RS.) 2009-10 7,01,000/- 2010-11 2,90,400/- 2011-12 19,44,456/- AGGRIEVED BY THE ASSESSMENT ORDERS FOR THE RESPECTI VE IMPUGNED ASSESSMENT YEARS, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) VIDE IMPUGNED ORDER COMMON FOR ALL THE THREE ASSESSMENT YEARS, RE STRICTED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 12.5% OF SUCH BOGUS P URCHASES. THUS, THE ADDITION CONFIRMED BY CIT(A) IN THE THREE ASSESSMEN T YEARS IS:- ASSESSMENT YEAR ADDITION CONFIRMED BY CIT(A) (IN RS.) 2009-10 1,75,250/- 2010-11 72,600/- 2011-12 4,86,114/- STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE T HE TRIBUNAL AND HAS ASSAILED THE ADDITION SUSTAINED BY THE CIT(A). THE ASSESSEES PRIMARY PLEA IS TO DELETE THE ENTIRE ADDITION. WITHOUT PREJ UDICE TO THE PRIMARY PLEA, THE ASSESSEE HAS MADE AN ALTERNATE PRAYER THA T THE ADDITION TO THE EXTENT OF GP RATE DECLARED BY THE ASSESSEE IN T HE IMPUGNED 3 ITA NO .3255 TO 3257/MUM/2019 (A.Y.2009-10 TO 2011- 12) ASSESSMENT YEARS MAY BE SUSTAINED. THE GP RATE DECL ARED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEARS IS AS UND ER:- ASSESSMENT YEAR G.P. RATE DECLARED BY THE ASSESSEE 2009-10 8.64% 2010-11 10.30% 2011-12 5.62% 3. MS. KAVITA P. KAUSHIK, REPRESENTING THE DEPARTME NT VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISS ING THE APPEALS FILED BY ASSESSEE. 4. I HAVE HEARD THE SUBMISSIONS MADE BY LD. DR AND HAVE EXAMINED THE DOCUMENTS AVAILABLE ON RECORD. THE PRIMARY PLEA OF THE ASSESSEE IS REJECTED FOR THE REASONS: (I) THE ASSESSEE HAS FAILED TO PROVE TRAIL OF GOODS WITH COGENT EVIDENCE. (II) THE ASSESSEE COULD NEITHER FURNISH CORRECT ADD RESS OF THE DEALERS NOR THE ASSESSEE COULD FILE CONFIRMATIONS F ROM THE DEALERS. HENCE, THE ASSESSEE HAS FAILED TO PROVE GE NUINENESS OF THE DEALERS. THOUGH, THE ASSESSEE HAS FURNISHED COPY OF INVOICES AND THE DETAILS OF BANK TRANSACTIONS VIDE WHICH PAYMENTS WERE MADE, BU T MERE FILING OF INVOICES AND DETAILS OF BANK TRANSACTIONS DOES NOT CONCLUSIVELY PROVE THAT THE TRANSACTIONS ARE GENUINE. HENCE, THE PRIMA RY PLEA OF THE ASSESSEE RAISED IN GROUND NO.1 OF APPEAL IS DISMISS ED. 4 ITA NO .3255 TO 3257/MUM/2019 (A.Y.2009-10 TO 2011- 12) 5. NOW, PROCEEDING ON ALTERNATE PLEA, THE DEPARTMEN T HAS NOT DISPUTED SALES. WITHOUT PURCHASES THERE CANNOT BE S ALES. WE CONCUR WITH THE FINDINGS OF THE CIT(A) THAT THE ASSESSEE M UST HAVE MADE PURCHASES FROM GREY MARKET AND OBTAINED BILLS FROM HAWALA OPERATORS. TAKING INTO CONSIDERATION ENTIRETY OF FA CTS, I AM OF CONSIDERED VIEW THAT THE ENDS OF JUSTICE WOULD BE S ERVED IF G.P ADDITION @11% IN EACH OF THE IMPUGNED ASSESSMENT YE ARS IS SUSTAINED. THE GROUND NO.2 OF THE APPEALS IS PARTLY ALLOWED, IN THE TERMS AFORESAID. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED. ORDER PRONOUNCED ON THURSDAY THE 17 TH DAY OF SEPTEMBER, 2020. SD./- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, +(/ DATED: 17/09/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT , 2. -. / THE RESPONDENT. 3. /. ( )/ THE CIT(A)- 4. /. CIT 5. 01-.( , . . . , / DR, ITAT, MUMBAI 6. 12345 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI