SAGAR TRADERS, THANE V. ITO WD 3(3), THANE

ITA 3476/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9961 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 12-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V YANARDHANAN
• Assessee Lawyers: KEYURI DESAI
• Keywords: Bogus purchase

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 3476/MUM/2017 ( / ASSESSMENT YEAR: 2009 - 10 ) M/S. SAGAR TRADERS 14/A, JAY SHANKAR APARTMENT, HARINIWAS CHOWK, NEAR THANAWALA GARAGE, NAUPADA, THANE (W) - 400 602 / VS. ITO, WARD - 3(3), ASHAR I. T. PARK, 6 TH FLOOR, B WING, ROOM NO.8, WAGLE INDUSTRIAL ESTATE, THANE (W) - 40 0 604 ./ ./ PAN/GIR NO. AAEFS 7367 Q ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. KEYURI DESAI / RESPONDENT BY : SHRI V. YANARDHANAN / DATE OF HEARING : 28.06.2017 / DATE OF PRONOUNCEMENT : 01 .0 9 .2017 / O R D E R PER SHAMIM YAHYA , A. M.: THIS IS AN APPEAL BY THE ASSESSEE WHEREIN THE ASSESSEE IS AGGRIEVED BY 100% DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES AMOUNTING T O RS.8,03,221/ - . 2. THE ASSESSING OFFICER (A.O.) IN THIS CASE HAS MADE 100% ADDITION ON ACCOUNT OF BOGUS PURCHASE AMOUNTING TO RS.8,03,221/ - . O N ASSESSEE'S APPEAL THE LEARNED CIT (A) HAS CONFORMED THE SAME . 2 ITA NO. 3476/MUM/2017 (A.Y. 2009 - 10) M/S. SAGAR TRADERS VS. ITO 3. AGAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 4. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN THE SALES ARE NOT DOUBTED, 100% DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THIS PROPOSITION IS SUPPORTED FROM HONBLE JU RISDICTIONAL HIGH COURT DECISION IN THE CASE OF NIKUNJ EXIMP ENTERPRISES . HOWEVER , THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MAKING PURCHASES THROUGH THE GREY MARKET GIVES THE ASSESSEE SAVINGS ON ACCOUNT OF NON - PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SUCH SITUATION , IN MY CONSIDERED OPINION , ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE 12.5 % DISALLOWANCE OUT OF THE BOGUS PURCHASES MEETS THE EN D OF JUSTICE. HENCE , I DIRECT THAT THE DISALLOWANCE IN THIS CASE BE RESTRICTED TO 12.5% OF THE BOGUS PURCHASE. 5. THE L EARNED COUNSEL OF THE ASSESSEE FAIRLY AGREED TO THE ABOVE PROPOSITION. 6. IN THE RESULT , THIS APPEAL FILED BY THE ASSESSEE STANDS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.09.2017 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 01.09.2017 . . ./ ROSHANI , SR. PS 3 ITA NO. 3476/MUM/2017 (A.Y. 2009 - 10) M/S. SAGAR TRADERS VS. ITO / COPY OF TH E ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI