ITO WD 1(3), KALYAN V. RUCHI MENTHOL P.LTD, MUMBAI

ITA 3744/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0885 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2016
• Court: TRIBUNAL
• Department Lawyers: MRS BEENA SANTOSH
• Assessee Lawyers: KETAN L VAJANI
• Keywords: Bogus purchase

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.3744/M/2016 (AY 2009 - 2010) ITO, WARD - 1 ( 3 ) , KALYAN, 1 ST FLOOR, MOHAN PLAZA, WAYALE NAGAR, KHADAKPADA, KALYAN. / VS. M/S. RUCHI MENTHOL PVT LTD., 104, MALHAR PALACE NO.1, MANPADA ROAD, OPP. KASTURI PLAZA, DOMBIVALI EAST - 401202. ./ PAN : AACCR9361G ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MRS. BEENA SANTOSH, DR / RESPONDENT BY : SHRI KETAN L. VAJANI / DATE OF HEARING : 29 .03.2017 / DATE OF PRONOUNCEMENT : 2 6 . 04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 31.5.2016 IS AGAINST THE ORDER OF THE CIT (A) - 2, THANE DATED 14.3.2016 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED FOUR GROUNDS IN TOTO AND THEY REVOLVE AROUND THE CORE ISSUE OF ADDITION ON ACC OUNT OF BOGUS PURCHASES. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ORDER OF THE AO AND MENTIONED THAT AO MADE ADDITION OF RS. 42,67,380/ - ON ACCOUNT OF BOGUS PURCHASES INVOLVING THE PARTIES WHOSE NAMES ARE KEPT IN THE OFFI CIAL WEBSITE OF THE SALES TAX DEPARTMENT. WHILE THE AO MADE ENTIRE SUCH BOGUS PURCHASES, THE CIT (A) RESTRICTED TO ONLY GP RATES OF THE ASSESSEE OVER THE YEARS AND FOUND THE GP RATE APPLICABLE TO AY 2014 - 2015 IS 12.19% IS HIGHEST. AO CALCULATED THE NET GP RATE @ 6.78% (IE THE SAID 12.19% - CURRENT GP RATE OF 5.41%). CIT (A) CALCULATED THE GP AT THE DIFFERENTIAL RATE OF 6.78% ON THE ENTIRE TURNOVER OF RS. 102.81 LAKHS AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A) BY GRANTING SUBSTANTIAL RELIEF TO THE ASSESSEE, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RE LEVANT MATERIAL PLACED BEFORE THE TRIBUNAL , I AM OF T HE 2 OPINION, THE DECISION GIVEN BY THE CIT (A) VIDE THE CONTENTS OF PARA 7.9 OF HIS ORDER IS REQUIRED TO BE UPHELD WITHOUT ANY CHANGES. THE SAID DECISION OF THE CIT (A) IS IN TUNE WITH THE BINDING BOMBAY HIGH COURT JUDGMENT IN THE CASE OF NIKUNJ EXIMP ENTE RPRIES P LTD (372 ITR 619) (BOM) AND GUJRATH HIGH COURT JUDGMENT IN THE CASE OF CIT VS. SIMIT P SHETH [2013] (356 ITR 451) (GUJ.) . ACCORDINGLY, I AM OF THE OPINION, THE CIT (A)S DECISION IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THUS, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRON OUNCED IN THE OPEN COURT ON 26 TH APRIL, 2017. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 26.04.2017 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI