NINAD SHIVANAND KULLY, THANE V. ITO WARD - 3(1) THANE, THANE

ITA 3972/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9152 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3972 / MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) SHRI NINAD SHIVANAND KULLY, B/4/8, HIMDHARA CHS LTD., SHREE NAGAR THANE (W) THANE 400604 VS. ITO WARD 3 (1), THA NE ASHAR IT PARK 6 TH FLOOR, ROAD NO.16 - Z BRODMA, NEHRU NAGAR WAGALE ESTATE THANE (W), THANE PAN/GIR NO. ACBPK7298P APPELLANT ) .. RESPONDENT ) ASSESSEE BY NONE REVENUE BY MS. N. HEMALATHA DATE OF HEARING 04 / 10 /201 7 DATE OF PRONOUNCEME NT 16 / 10 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, THANE, DATED 29/03/2017 FOR THE A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR UPHOLDING ADDITION ON ACCOUNT OF BOGUS PURCHASES. 3. NOBODY APPEARED ON BEHALF OF ASSESSEE INSPITE OF SERVICE OF NOTICE NOR ANY ADJOURNMENT PETITION WAS FILED, THEREFORE, BENCH DECIDED TO DISPOSE THE A PPEAL AFTER HEARING THE LEARNED DR AND CONSIDERING THE MATERIAL PLACED ON RECORD ITA NO. 3972/MUM/2017 SHRI NINAD SHIVANAND KULLY 2 4. RIVAL CO NTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN THIS CASE, THE AO HAS RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THAT THE ASSESSEE HAS AFFECTED PURCHASES FROM M/S DEV ENTERPRISES, RS.4,70.259/ - , WHICH WAS DECLARED AS SUSPICIOUS, THE PARTY, IN HIS STATEMENTS / ON T HE BASIS OF SPOT VERIFICATION / SURVEY ACTION, DULY ADMITTED THE FACT THAT IT HAD NOT ACTUALLY DELIVERED ANY GOODS, BUT MERELY PROVIDED THE BILLS AND REFUNDED HACK CASH TO THE BUYER, AFTER DEDUCTING THE NOMINAL COMMISSION. THE AO TREATED THE ENTIRE PURCHASES OF RS.4,70,259/ - FROM ABOVE REFERRED PARTY, AS BOGUS AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. BY THE IMPUGNED ORDER, CIT(A) UPHELD THE ENTIRE ADDITION MADE BY THE AO. 5. ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. I HAVE CONSIDERED THE CONTENTIONS OF LEARNED DR AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD, I FOUND THAT ASSESSEE I S ENGAGED IN THE MANUFAC TURING O F RECTIFIER AND CONTROL PANEL WHICH ARE MAINLY EXPORTED. THE SAID ASSESSMENT WAS REOPENED U/S 1 47 AND A NOTICE DARED 26 TH SEPTEMBER.2013 ALONG WITH COPY OF REASONS RECORDED F OR ISSUE OF NOTICE U/S 148 OF THE IT ACT, STATING THA T SALES TAX DEP ARTME NT, GOVERNMENT OF MAHARASHT RA HAVE INFORMED THAT CERTAIN PARTIES HAVE ISSUED BOGUS BILLS WITHOUT ANY TRANSACTION AND IN THE CASE OF ASSESSEE THE ISSUE RELATED TO PURCHASES FROM M/S DEV ENTERPRISES OF RS. 470259/ - . ITA NO. 3972/MUM/2017 SHRI NINAD SHIVANAND KULLY 3 7. AFTER REOPENING THE ASSESSMENT, AO OB SERVED THAT THE ASSESSEE HAD MADE PURCHASES OF RS. 4,72,259/ - FROM THE HAWALA PARTIES BEING NOT SATISFIED WITH THE REPLY FILED BY THE ASSESSEE. AO ADDED 100% OF SUCH PURCHASES IN ASSESSEES INCOME. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE A O AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8 . FROM THE RECORD I FIND THAT ADDITION HAS BEEN MADE BY THE AO ON THE BASIS OF INFORMATION FROM THE SALES TAX DEPARTMENT. HOWEVER, THE AO HAS NOT REJECTED THE CORRESPONDING SALES MADE BY THE ASSESSEE WHICH GE NERATED REASONABLE PROFIT. ONCE, IT IS ESTABLISHED , THAT GOODS SO PURCHASED HAVE BEEN SOLD, THERE IS NO JUSTIFICATION FOR ADDING ENTIRE AMOUNT OF PURCHASE IN ASSESSEES INCOME. AT THE MOST CERTAIN PERCENTAGE OF SUCH PURCHASE MAY BE ADDED ON THE PLEA THAT ASSESSEE MIGHT HAVE SHOWN THE PURCHASE S OF THE GOODS AT HIGHER PRICE SO AS TO REDUCE ITS PROFIT MARGIN . KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDICIAL PRONOUNCEMENTS BY THE CO - ORDINATE BENCHES, I CONSIDER IT APPROPRIAT E TO UPHOLD THE ADDITION OF 12.5% OF SUCH PRICES. 10. IN THE RESULT, APPEAL IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16 / 10 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 10 /201 7 KARUNA SR. PS ITA NO. 3972/MUM/2017 SHRI NINAD SHIVANAND KULLY 4 COPY OF THE ORDER FORWARDED TO : BY OR DER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//