ITO 27(1)(4), MUMBAI V. SHRI INDERJEET SINGH BHABRA, MUMBAI

ITA 3633/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4389 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JEETENDRA KUMAR
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 3633/MUM/2019 (ASSESSMENT YEAR 2010-11 ) ITO-27(1)(4) ROOM NO. 409 4 TH FLOOR, TOWER NO. 6 VASHI RAILWAY STATION COMPLEX, VASHI NAVI MUMBAI-400 703. VS . SHRI INDRJEET SINGH BHABRA BORLA CHS, OPP. BASANT CINEMA, FLAT NO. 5/9 CHEMBUR, MUMBAI-400074. PAN : AAIPB7410R ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI JEETENDRA KUMAR DEPARTMENT BY SHRI MEHUL SHAH DATE OF HEARING 20.10.2020 DATE OF PRONOUNCEMENT 21.10.2020 O R D E R PER SHAMIM YAHYA (AM) :- THIS IS AN APPEAL BY THE REVENUE WHEREIN THE REVE NUE IS AGGRIEVED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [I N SHORT LEARNED CIT(A)] HAS ERRED IN DELETING THE ADDITION OF RS. 1,56,000/ - DONE @ 100% BY THE ASSESSING OFFICER. 2. THE ASSESSEE IN THIS CASE IS ENGAGED INTO THE BU SINESS OF ENGINEERING AND FABRICATION WORK. THE ASSESSMENT WAS REOPENED U PON INFORMATION FROM SALES TAX DEPARTMENT THAT ASSESSEE HAS MADE PURCHAS ES OF RS.1,56,000/- FROM BOGUS DEALERS. THE ASSESSING OFFICER MADE 100% ADDI TION OF THE BOGUS PURCHASES. 3. UPON ASSESSEE'S APPEAL LEARNED CIT-A HAS NOTED T HAT THE SAID PURCHASES HAS BEEN OFFERED AS INCOME U/S. 41(1) IN A.Y. 2015- 16. HENCE HE DELETED THIS DISALLOWANCE BY HOLDING AS UNDER :- THE GROUNDS NO. 1 & 2 OF THE APPEAL ARE AGAINST THE ADDITION OF RS. 1,56,0007- AS NON-GENUINE PURCHASES. DURING THE APP ELLATE PROCEEDINGS IT WAS STATED THAT THE PURCHASE OF RS. 1,56,000/- FROM M/ S MONTEX INDUSTRIES WAS OF INFERIOR QUALITY, THEREFORE APPELLANT REFUSED TO MAKE PAYMENT. THE GOODS WERE NOT REPLACED. THEREFORE, IN A.Y 2015-16 A PPELLANT HAS WRITTEN SHRI INDRJEET SINGH BHABRA 2 BACK THIS AMOUNT IN HIS BOOKS OF ACCOUNTS AND PAID TAX . COPY OF P & L ACCOUNT AND SUPPORTING DOCUMENTS WERE FILED. IT WAS A RGUED THAT APPELLANT HAS ALREADY PAID TAX ON THE ALLEGED PURCHASE AND NO F URTHER ADDITION CAN BE MADE ON THIS PURCHASE AGAIN. IN VIEW OF THESE FACTS O F THE CASE I AM IN AGREEMENT WITH THE SUBMISSION OF THE APPELLANT ACCORDI NGLY THE ADDITION OF ENTIRE BOGUS PURCHASE OF RS. 1,56,0007- IS DELETED. T HESE GROUNDS OF APPEAL ARE 'ALLOWED.' 4. AGAINST ABOVE ORDER REVENUE IS IN APPEAL BEFORE THE ITAT. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND T HAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED IT IS SETTLED LAW THAT WHEN S ALES ARE NOT DOUBTED, HUNDRED PERCENT DISALLOWANCE FOR BOGUS PURCHASE CAN NOT BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSITION IS SUPPORTED FROM HONOURABLE JURISDICTIONAL HIGH CO URT DECISION IN THE CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT. 18.6.2014). IN THIS CASE THE HONOURABLE HIGH COURT HAS UPHELD HUND RED PERCENT ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN SALES ARE N OT DOUBTED. MOREOVER, WE NOTE THE ASSESSEE PLEA THAT SINCE THE IMPUGNED PURC HASES WERE OF INFERIOR QUALITY ASSESSEE MADE EFFORTS TO REFUND THE SAME. B EING UNSUCCESSFUL HE OFFERED THE SAME AS INCOME IN A.Y. 2015-16. LEARNED CIT(A) HAS GIVEN A FACTUAL FINDING IN THIS REGARD. THUS NO PREJUDICE IS CAUSED TO THE REVENUE AS IMPUGNED SUM HAS ALREADY BEEN SHOWN AS INCOME SUBSEQUENTLY. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). HENCE , WE UPHOLD THE SAME. 5. THE DECISION OF N.K. PROTEINS LTD. (250 ITR 22) RELIED BY THE REVENUE WAS A DISMISSAL OF SLP BY THE HON'BLE SUPREME COURT AND HAS ALREADY BEEN EXPLAINED AND DISTINGUISHED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF M. HAZI ADAM & CO. (ITA NO. 1004 OF 2006 DATED 11.2.20 19). 6. IN THE RESULT THIS APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULES ON 21.10.2020. SD/- SD/- (RAMLAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 21/10/2020 SHRI INDRJEET SINGH BHABRA 3 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI