VINOD KUMAR BHAWARLAL KAWAD, MUMBAI V. ITO WD XII-(4), MUMBAI

ITA 3274/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0742 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHAN
• Assessee Lawyers: D C SABOO
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.3274/M/2016 ASSESSMENT YEAR: 2010-11 SHRI VINOD KUMAR BHAWARLAL KAWAD, 512, ANAND BUILDING, 82/84 KAZI SAYED STREET, MASJID BUNDER, MUMBAI 400 003 PAN: AEMPK4369J VS. INCOME TAX OFFICER, WARD XII-(4), MUMBAI - 400051 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI D.C. SABOO, A.R. & SHRI SHYAM SABOO, A.R. REVENUE BY : SHRI M.C. OMI NINGSHAN, D.R. DATE OF HEARING : 11.04.2017 DATE OF PRONOUNCEMENT : 17.05.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 22.02.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 04.0 8.2010 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE CASE WAS REOPENED AND ASSESSMENT WAS COMPLETED UNDER SECTION 143 READ WITH SECTION 1 47 OF THE INCOME TAX ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER (HEREINAFTER REFERRED TO AS AO) FOUND THAT ASSESSEE HAS MADE PURCHASE FROM ONE M/S. MR. CORPORATION OF RS.3,33,289/-. THE ASS ESSEE WAS GIVEN SHOW CAUSE NOTICE AND ASSESSEE REPLIED THAT ASSESSEE HAS ACCOUNTED PURCHASES IN HIS BOOKS OF ACCOUNTS AND HE HAS ALSO ADMITTED THE SAME WHILE FILING THE HALF ITA NO.3274/M/2016 SHRI VINOD KUMAR BHAWARLAL KAWAD 2 YEARLY RETURN WITH SALES TAX DEPARTMENT. THE SALES TAX DEPARTMENT HAD ISSUED A NOTICE TO THE ASSESSEE STATING THAT M/S. M R. CORPORATION HAS NOT PAID THE TAXES IN RESPECT OF THE PURCHASES MADE FROM IT AND ASSESSEE HAD PAID RS.19,624/- TOWARDS THE VAT, PENALTY AND INTEREST T HEREON. THE ASSESSEE HAD MADE FULL PAYMENT TO M/S. MR. CORPORATION FOR PURCH ASE OF LICENSES. THE LEDGER EXTRACT OF M/S. MR. CORPORATION ALONG WITH P URCHASE INVOICES WERE ENCLOSED TOWARDS THE PROOF FOR PURCHASE OF LICENSES AND PAYMENT MADE THEREOF. THE LICENSES PURCHASED FROM THE ABOVE PARTY HAVE BE EN SOLD BY THE ASSESSEE TO VARIOUS CLIENTS AND SALE PROCEED HAS DULY BEEN ACCO UNTED IN THE BOOKS OF THE ASSESSEE. AFTER CONSIDERING THE REPLY, THE AO WAS OF A VIEW THAT ASSESSEE HAS MADE PURCHASES FROM AN UNREGISTERED DEALER I.E. M/S . MR. CORPORATION AND THE ASSESSEE IS IDENTIFIED AS ONE OF THE ACCOMMODATION BENEFICIARIES OF M/S. MR. CORPORATION. THEREFORE, PURCHASES MADE BY THE ASSE SSEE ARE NOT GENUINE. HENCE, THE EXPENSES CLAIMED RS.3,33,289/- TOWARDS P URCHASE OF LICENSES FROM AN UNREGISTERED DEALER IS REJECTED. 3. MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS ALSO DISMISSED THE APPEAL OF THE ASSESSEE. 4. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMI TTED BEFORE US THAT ASSESSEE HAD MADE PURCHASES FROM M/S. MR. CORPORATI ON. HE SUBMITTED THE COPY OF PURCHASE BILL, BILL NUMBER, SUPPLIERS NAME , ADDRESS, TOTAL AMOUNT OF VAT IN THE BILL, BANK STATEMENT SHOWING THE PAYMENT TO THIS PARTY BY ACCOUNT PAYEE CHEQUE, STOCK STATEMENT AND LEDGER ACCOUNT OF THE ASSESSEE. THEREFORE, THIS PROVES THAT ASSESSEE HAS MADE PURCHASES FROM T HIS PARTY. NOWHERE THE SALES HAVE BEEN DOUBTED. THE SALES TAX DEPARTMENT FOUND THAT THE SAID PARTY WAS BOGUS PARTY AND ASSESSEE IS A BENEFICIARY. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS MADE THE EXPENDITURE AND THE PAYMENTS HAVE BEEN MADE AND ASSESSEE HAS MADE A GENUINE PURCHASE. ITA NO.3274/M/2016 SHRI VINOD KUMAR BHAWARLAL KAWAD 3 5. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDER OF REVENUE AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS ADMITTED FACT ON RECORD THAT ASSESSEE HAS MADE PURCHASES FROM M/S. MR. CORPORATION. ASSE SSEE HAS PURCHASED THE LICENSES FROM M/S. MR. CORPORATION AND M/S. MR. COR PORATION HAS NOT PAID THE SALES TAX AND VAT. THEREFORE, ASSESSEE HAS PAI D RS.19,624/- FOR VAT, PENALTY AND INTEREST THEREOF. THE ASSESSEE MADE FU LL PAYMENT OF RS.3,33,289/- TO M/S. MR. CORPORATION TOWARDS PURCHASE OF LICENSE S AND THE LICENSES PURCHASED FROM THE ABOVE PARTY HAVE BEEN SOLD BY TH E ASSESSEE TO VARIOUS CLIENTS AND SALE PROCEED HAS DULY BEEN ACCOUNTED IN THE BOOKS OF THE ASSESSEE. FROM THE ABOVE FACTS, WE ARE OF THE VIEW THAT THE O NLY BENEFIT ASSESSEE GOT IS 4% OF THE VAT BY PURCHASING THE LICENSES FROM M/S. MR. CORPORATIO N. THEREFORE, ENTIRE ADDITION CANNOT BE MADE. THEREFO RE, WE MODIFY THE ORDER OF LOWER AUTHORITIES AND DIRECT THE AO TO MAKE THE ADD ITION OF ONLY 4% OF TOTAL PURCHASE I.E. RS.3,33,289/- WHICH COMES TO RS.13,33 2/-. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.05.2017. SD/- SD/- (MANOJ KUMAR AGGARWAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 17.05.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI ITA NO.3274/M/2016 SHRI VINOD KUMAR BHAWARLAL KAWAD 4 THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.