ACIT -CC -4(4) CR-4 , MUMBAI V. NIRU IMPEX , MUMBAI

ITA 3849/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4847 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 31-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V JHAVERI
• Assessee Lawyers: S ABI RAMA KARTHIKEYAN
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3849 & 3850/M/2018 ASSESSMENT YEARS: 2008-09 & 2009-10 ACIT, CENTRAL CIRCLE -4(4), CENTRAL RANGE 4, ROOM NO.1922, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 21 VS. M/S. NIRU IMPEX, 112, 115 THE JEWEL, TATA ROAD NO.2, OPERA HOUSE, MUMBAI 400 004 PAN: AACFN 2800K (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI S. ABI RAMA KARTHIKEYAN, A.R. REVENUE BY : SHRI B.V. JHAVERI, D.R. DATE OF HEARING : 09.07.2019 DATE OF PRONOUNCEMENT : 08.08.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED TWO APPEALS HAVE BEEN PREFERRED B Y THE REVENUE AGAINST THE ORDER DATED 28.03.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2008-09 & 2009-10. ITA NO.3849/M/2018 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE DISALLOWANCE AT 10% OF T HE BOGUS PURCHASES INSTEAD OF 100% DISALLOWANCE MADE BY THE AO. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS F RAMED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 30 .12.2010 ITA NOS.3849 & 3850/M/2018 M/S. NIRU IMPEX 2 ASSESSING THE TOTAL INCOME AT RS.7,29,70,710/- AS A GAINST THE RETURNED INCOME OF RS.7,26,17,710/-. THEREAFTER, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 30.03.2015. THE REASONS RECORDED FOR REOPENING ASS ESSMENT WAS THAT THE ASSESSEE WAS ONE OF THE BENEFICIARY OF THE ACCOMMODATION ENTRIES RACKET RUN AND OPERATED BY S HRI RAJENDRA JAIN, SHRI SANJAY CHOUDHARY DHARMI CHAND J AIN GROUP. ACCORDINGLY, THE AO ISSUED QUESTIONNAIRE ON THE ASSESSEE CALLING UPON TO FURNISH THE DETAILS OF PUR CHASES INCLUDING THE PURCHASES MADE FROM NAZAR IMPEX PVT. LTD. AND MANYANK IMPEX FROM WHOM THE PURCHASES TO THE TUNE O F RS.2,71,74,576/- WERE MADE DURING THE YEAR. THE AS SESSEE FILED THE NECESSARY DETAILS IN ORDER TO PROVE THE GENUINE NESS. HOWEVER, THE REPLY OF THE ASSESSEE DID NOT FIND FAV OUR WITH THE AO AND THE ENTIRE PURCHASES WERE ADDED TO THE INCOM E OF THE ASSESSEE AS BEING BOGUS IN FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT DATED 30.03 .2016. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITI ON EQUAL TO 10% OF THE BOGUS PURCHASES BY FOLLOWING THE CO-ORDI NATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2006 -07 & 2007- 08 WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL HA S DIRECTED THE AO TO COMPUTE THE INCOME BY APPLYING 10% GP ON THE BOGUS PURCHASES OVER AND ABOVE THE NORMAL PROFITS. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE LD. CIT(A) HAS PASSED THE ORDER AFTER FOLLOWING THE CO-ORDINATE BENCH OF THE TRIBUNAL ITA NOS.3849 & 3850/M/2018 M/S. NIRU IMPEX 3 DECISION IN ASSESSEES OWN CASE IN A.Y. 2006-07 & 2 007-08 IN ITA NO.6651 & 6652/M/2012 WHEREIN THE CO-ORDINATE B ENCH OF THE TRIBUNAL HAS DIRECTED THE AO TO ASSESS THE PROF ITS ON BOGUS PURCHASES @ 10% OVER AND ABOVE THE NORMAL GP DECLAR ED BY THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY INFIRMITY OR ANOMALY IN THE ORDER OF LD. CIT(A) AS THE LD. CIT(A) HAS FOLLO WED THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL I N EARLIER YEARS IN ASSESSEES OWN CASE. ACCORDINGLY, WE ARE INCLIN ED TO UPHOLD THE ORDER OF LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ITA NO.3850/M/2018 7. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS IDEN TICAL TO THE ONE AS STATED ABOVE IN ITA NO.3849/M/2018 FOR A.Y. 2008-09. THEREFORE, OUR FINDING IN ITA NO.3849/M/2018 FOR A. Y. 2008-09 WOULD, MUTATIS MUTANDIS, APPLY TO THIS APPEAL AS WE LL. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.08.2019. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 08.08.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NOS.3849 & 3850/M/2018 M/S. NIRU IMPEX 4 THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.