NIKITA SANJAY SHETH, THANE V. ITO WD 3(1), THANE

ITA 3777/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9486 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.3777/MUM/2017 (ASSESSMENT YEAR: 2009-10) MRS. NIKITA SANJAY SHETH VS. INCOME TAX OFFICER PROP. M/S. NIKITA ENTERPRISES C/A, 301, SANKALP POOL NR. MANISHA NAGAR, KALWA THANE 400605 WARD 3(1) THANE PAN AYQPS4343G APPELLANT RESPONDENT ASSESSEE BY: SHRI DEVENDRA JAIN REVENUE BY: MS. N. HEMALATHA DATE OF HEARING: 10.08.2017 DATE OF PRONOUNCEMENT: 29.09.2017 O R D E R PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A)-2, THANE DATED 17.03.2017 FOR A.Y. 2009-10. 2. IN THIS APPEAL THE ONLY ISSUE IS WITH REGARD TO THE ADDITION OF ` 3,02,255/- MADE BY THE AO ON ACCOUNT OF BOGUS PURCH ASES FROM TWO PARTIES. 3. THE RELEVANT DISCUSSION IN THE ORDERS OF THE AUTHOR ITIES BELOW REVEALS THAT BASED ON THE INFORMATION FROM THE SALES TAX DE PARTMENT OF GOVERNMENT OF MAHARASHTRA AS ALSO THE VERIFICATION EXERCISES CARRIED OUT, PURCHASES MADE BY THE ASSESSEE OF ` 3,02,255/- FROM TWO PARTIES, NAMELY BLUE NILE ENTERPRISES AND POOJA CORPORATION HAVE BE EN HELD TO BE BOGUS. ACCORDINGLY THE SAID AMOUNT HAS BEEN ADDED TO THE R ETURNED INCOME. 4. BEFORE ME THE ASSESSEE HAS CONTENDED THAT ADDITION, IF ANY, BE MADE TO THE EXTENT OF THE PROFIT ATTRIBUTABLE TO THE BOG US PURCHASE AND NOT THE ENTIRE PURCHASES ITSELF. ITA NO. 3777/MUM/2017 MRS. NIKITA SANJAY SHETH 2 5. OF COURSE, THE LEARNED D.R. HAS SUPPORTED THE STAND OF THE LOWER AUTHORITIES. 6. AFTER CONSIDERING THE RIVAL STANDS I AM OF THE OPIN ION THAT IT WOULD BE APPROPRIATE IF ADDITION TO THE EXTENT OF 12,5% OF T HE UNPROVED PURCHASE IS ADDED TO THE INCOME OF THE ASSESSEE TO PLUG THE LEA KAGE OF REVENUE, IF ANY, ON ACCOUNT OF UNPROVED PURCHASES. NOTABLY, THE ASSE SSEE WAS ABLE TO SHOW BEFORE THE LOWER AUTHORITIES THAT THOUGH THE PURCHA SES FROM THE TWO PARTIES WERE UNPROVED BUT IN FACT THE MATERIAL WAS PURCHASED, MAY BE FROM OTHER PARTIES IN GRAY MARKET, SINCE CORRESPOND ING SALES HAVE BEEN ACCEPTED. THEREFORE, UNDER THESE CIRCUMSTANCES THE ENTIRE AMOUNT OF PURCHASES CANNOT BE ASSESSED AS INCOME. IT IS, THER EFORE, HEREBY DIRECTED THAT 12.5% OF THE TOTAL PURCHASES BE TREATED AS INC OME RELATABLE TO THE IMPUGNED TRANSACTIONS AND THE BALANCE OF THE ADDITI ON BE DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2017. SD/ - (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATED: 29 TH SEPTEMBER, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 2, THANE 4. THE PR. CIT 2, THANE 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.