VIJAY BOGILAL SHAH, MUMBAI V. ACIT 25(2), MUMBAI

ITA 3294/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2462 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN, AM AND PAWAN SINGH, JM ./ I.T.A. NO . 2560 / MUM/ 14 ( / ASSESSMENT YEA R : 2010 - 11 ) ASSTT. COMMISSIONE R OF INCOME TAX,25(2), ROOM NO.108, 1 ST FLOOR, BLDG. NO.C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 4000051 / VS. VIJAY BHOGILAL SHAH, B - 1203, PRATAP HERITAGE L T ROAD, BORIVALI (W), MUMBAI - 400092 ( / APPE LLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO .3294/ MUM/ 14 ( / ASSESSMENT YEA R : 2010 - 11 ) VIJAY BHOGILAL SHAH, B - 1203, PRATAP HERITAGE L T ROAD, BORIVALI (W), MUMBAI - 400092 / VS. ASSTT. COMMISSIONER OF INCOME TAX, 25(2), ROOM NO.108, 1 ST FLOOR, BLDG. NO.C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 4000051 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AKGPS2270Q / REVE NUE BY SHRI A K DHONDIAL / ASSESSEE BY SHRI RATAN SAMAL / DATE OF HEARING : 18 .11 . 201 5 / DATE OF PRONOUNCEMENT: 18 .11. 201 5 ITA NO 2560 / MUM/ 14 AND 3294/M/14 2 / O R D E R P ER B R BAS KARAN, AM : THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 16.01.2014 PASSED BY LD CIT(A) - 35, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2010 - 11. THE ISSUE RELATES TO THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES, WHICH WAS DELETED BY LD CIT(A) PARTIALLY. THE REVENUE IS AGGRIEVED BY THE RELIEF GRANTED BY LD CIT(A) AND THE ASSESSEE IS AGGRIEVED BY THE ADDITION SUSTAINED BY THE FIRST APPELLATE AUTHORITY. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE SALES TAX DEPARTMENT, ON TH E BASIS OF THEIR INVESTIGATION, IDENTIFIED CERTAIN PARTIES WHO ARE INDULGING IN PROVIDING BOGUS ACCOMMODATION BILLS. THE AO NOTICED THAT THE ASSESSEE HAS PURCHASED GOODS WORTH RS.63,10,001/ - FROM THE PARTIES, WHOSE NAMES FIND PLACE IN THE LIST OF SALES TA X DEPARTMENT. HENCE THE AO DISALLOWED THE ABOVE SAID AMOUNT, SINCE SOME OF THE PARTIES WERE NOT TRACEABLE AND SOME HAVE ADMITTED THE FACT OF PROVIDING ACCOMMODATION BILLS. THE LD CIT(A), HOWEVER, ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THE AO DID N OT FIND FAULT WITH THE RECORDS AND BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND THE ADDITION COULD NOT HAVE BEEN MADE ON THE BASIS OF STATEMENTS GIVEN BY THE SUPPLIERS ALONE. THE ASSESSEE HAS ALSO CONTENDED THAT HE HAS MAINTAINED STOCK REGISTERS, PAYME NTS HAVE BEEN MADE TO THE SUPPLIERS THROUGH BANKING CHANNELS AND HENCE THE PURCHASES AND SALES COULD NOT HAVE BEEN DOUBTED BY THE AO. ACCORDINGLY, THE LD CIT(A) SUSTAINED THE ADDITION TO THE EXTENT OF 15% OF THE PURCHASES AND DELETED THE BALANCE AMOUNT O F ADDITION. 3. AT THE TIME OF HEARING, THE LD A.R FURNISHED A STATEMENT SHOWING ONE TO ONE RECONCILIATION OF PURCHASES AND SALES OF THE GOODS PURCHASED FROM THE PARTIES, WHOSE NAMES FIND PLACE IN THE LIST OF SALES TAX ITA NO 2560 / MUM/ 14 AND 3294/M/14 3 DEPARTMENT. ACCORDINGLY HE SUBMIT TED THAT THE ASSESSEE HAS FULLY ACCOUNTED FOR THE SALES RELATING TO THE IMPUGNED PURCHASES AND HENCE THERE IS NO SCOPE FOR MAKING ADDITION OF 15%, SINCE THE PURCHASE , SINCE THE PROFIT ARISING ON SUCH SALES HAVE ALREADY BEEN ACCOUNTED FOR IN THE BOOKS OF AC COUNT. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE PROFIT DECLARED IN THE SALES MADE OUT OF ALLEGED BOGUS PURCHASES IS VERY LOW AND THE SAME SUPPORTS THE CASE OF THE AO. THE LD D.R FURTHER SUBMITTED THAT THE STATEMENT FURNISHED BY THE ASSESSEE NEEDS EXAMINATION AT THE END OF THE ASSESSING OFFICER. 4. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE ISSUE URGED BEFORE US REQUIRES FRESH EXAMINATION IN THE LIGHT OF STATEMENT FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER, IN OUR VIEW, SH OULD HAVE ALSO EXAMINED THE BOOKS OF ACCOUNTS AND OTHER RECORDS MAINTAINED BY THE ASSESSEE IN ORDER TO ASCERTAIN ABOUT THEIR VERACITY BEFORE MAKING THE ADDITION, I.E., THE AO SHOULD NOT HAVE PLACED FULL RELIANCE ON THE STATEMENT GIVEN BY / NON RESPONSE OF TE SUPPLIERS, WHOSE NAMES FIND PLACE IN THE LIST GIVEN BY THE SALES TAX DEPARTMENT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE IMPUGNED PURCHASES AND THE CORRESPONDING SALES HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND HENCE THE RE IS NO FURTHER SCOPE FOR MAKING ANY ADDITION. HOWEVER, THE LD D.R, IN OUR VIEW, HAS RIGHTLY POINTED OUT THAT THE GROSS PROFIT SHOWN IN RESPECT OF THE SALES ARISING OUT OF IMPUGNED PURCHASES IS VERY LOW AND THE SAID ASPECT REQUIRES FURTHER PROBE. ACCORD INGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE BOOKS OF ACCOUNTS AND OTHER INFORMATION/EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORD ANCE WITH THE LAW. ITA NO 2560 / MUM/ 14 AND 3294/M/14 4 5. IN THE RESULT THE APPEAL OF THE ASSESSEE AS WELL AS THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 18TH NOVEMBER , 2 015. 18TH NOV , 2 015 SD SD ( PAWAN SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER AC COUNTANT MEMBER MUMBAI: 18TH NOV , 2 015. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCE RNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGIS TRAR) , /ITAT, MUMBAI