PARAG ANIL PHIRKE, THANE V. ITO WD 2(3), KALYAN

ITA 4045/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8543 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase; Principle of natural justice; Opportunity of cross examination; Cost of acquisition; Accommodation entries
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 4045 / MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 4046/ MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) ITA NO. 4047/ MUM/20 17 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. PARAG ANI L PHIRKE PROP. OF M.S. METABED INDUSTRIES PLOT NO. 244, NEELKAMAL SARVODAYA NR. AMP. GATE AMBERNATH THANE (W) - 421501 VS. ITO WD 2(3) KALYAN PAN/GIR NO. AJJP7085N APPELLANT ) .. RESPONDENT ) ASSESSEE BY NONE REVENUE BY MS. N. HEMALATHA DATE OF HEARING 05 / 10 /201 7 DATE OF PRONOUNCEME NT 15 / 11 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 3, THANE DATED 21/07/2016 FOR A.Y. 2009 - 10 TO 2011 - 12 IN THE MATTER OF ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE IT ACT. 2. THE FOLLOWING COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: - 1. THE LD. CIT (A) HAS COMPLETED THE ASSESSMENT WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE, WHICH IS CONTRA RY TO LAW AND IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. , ITA NO. 4045/MUM/2017 TO 4047/MUM/2017 SHRI PARAG ANIL PHIRKE 2 2. A. THE LD. CIT (A) HAS ERRED IN FACTS AND IN LAW BY DISALLOWING A SUM OF RS. 2,18,185/ - , BEING 25% OF THE ALLEGED BOGUS PURCHASES (OF RS. 8,72,7407 - ), AS INFLATED PURCHASES MADE FROM U NVERIFIABLE PARTIES, WHICH IS WITHOUT ANY BASIS AS SUCH. B. THE LD. CIT (A) HAS ERRED IN IGNORING VARIOUS DOCUMENTARY EVIDENCES SUBMITTED IN SUPPORT OF THE GENUINE PURCHASES MADE BY THE APPELLANT FIRM. C. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED TH AT THE LD. AO HAS NEITHER AFFORDED ANY OPPORTUNITY OF CROSS EXAMINATION NOR HAS MADE ANY E FFORTS TO CONDUCT INDEPENDENT ENQUIRIES. D. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THAT THE APPELLANT IS NOT RESPONSIBLE IF THE NOTICES WHICH WERE ISSUED TO T HE CORRESPONDING PARTIES WERE RETURNED UNSERVED. THE APPELLANT HAS NO CONTROL OVER THE RESPONSE GIVEN BY THE PARTIES. E. THE LD CIT (A) OUGHT TO HAVE APPRECIATED THAT MERE PAYMENT OF THE VAT LIABILITY BY THE APPELLANT ON BEHALF OF THE HAWALA PARTIES D OESN'T JUSTIFY THE ALLEGATION THAT THE APPELLANT WAS INVOLVED IN BOGUS TRANSACTIONS. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, AMEND OR SUBSTITUTE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. RELIEF CLAIMED ' . 1 . THE LD. AO BE DIRECTE D TO DELETE THE ADDITION OF RS. 2,18,185/ - SUSTAINED CONSEQUENT TO THE PARTIAL RELIEF GRANTED BY THE LD. CIT (A). 3. NOBODY APPEARED ON BEHALF OF ASSESSEE INSPI TE OF GIVING OPPORTUNITY, BENCH THEREFORE DECIDED TO DISPOSE THE APPEAL AFTER HEARING LEARNED D R AND CONSIDERING THE MATERIAL PLACED ON RECORD. 4. I HAVE GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW FOR THE A.Y .2009 - 10 AND FOUND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF HOSPITAL FURNITURE. THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE S ALES T AX D EPARTMENT THAT THE PARTIES M/S. NAVDEEP TRADING CORPORATION AND M/S , SHUBH LABH METAL AND ALLOY FROM WHOM THE ASSESSEE HAD MADE ITA NO. 4045/MUM/2017 TO 4047/MUM/2017 SHRI PARAG ANIL PHIRKE 3 PURCHASES WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES AND THE APPELLANT WAS ONE OF THE BENEFICIARIES. TO VERIFY THE GENUINENESS OF THE ABOVE PARTIES, THE AO ISSUED NOTICE U/S 133(6), BUT IT WAS RETURNED UNSERVED WITH THE REMARK 'NOT KNOWN'. FURTHER, THE ASSESSEE FAILED TO PRODUCE THE PARTIES FOR CROSS EXAMINATION. THEREFORE, THE AO ADDED BACK PURCHASES OF RS,8,72,740 / - TO THE INCOME OF THE ASSESSEE AS BOGUS PURCHASES . 5. BY THE IMPUGNED ORDER , CIT(A) CONFIRMED THE DISALLOWANCE TO THE EXTENT OF 25% OF THE ALLEGED BOGUS PURCHASES, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. I HAVE CONSIDERED CAREFULLY THE CONTENTION OF LEARNED DR AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . 7. FROM THE FINDING OF CIT(A) IT CAN BE CONCLUDED THAT, IT IS A CASE WHERE THE GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED THE BILLS OF SUCH GOODS. THOUGH THE PURCHASES WERE SHOWN TO HAVE BEEN MADE BY MAKING PAYMENT TO HAW ALA DEALERS BUT GOODS MUST HAVE COME FROM GREY MARKET, THEREFORE, UNDER SUCH CIRCUMSTANCES, THE CHANCES OF PURCHASE COST BEING INFLATED COULD NOT BE RULED OUT. 8. I FOUND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF HOSPITAL FURNITURE. KEEPING IN VIEW THE RATE OF GP SHOWN BY THE ASSESSEE, THE ESTIMATION OF EXTRA PROFIT AT 10% ON SUCH ALLEGED PURCHASES WILL SERVE THE PURPOSE OF JUSTICE. ACCORDINGLY, I MODIFY THE ORDER OF BOTH THE LOWER AUTHORITIES AND DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF 1 0% OF THE BOGUS PURCHASES. I DIRECT ACCORDINGLY. ITA NO. 4045/MUM/2017 TO 4047/MUM/2017 SHRI PARAG ANIL PHIRKE 4 9. FACTS AND CIRCUMSTANCES IN THE A.Y.2010 - 11 & 2011 - 12 ARE PARI METERIA, THEREFORE, FOLLOWING THE ABOVE REASONING, I DIRECT AO TO RESTRICT ADDITION TO THE EXTENT OF 10% OF SUCH PURCHASES 9. IN THE RESULT APP EAL S ARE ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 11 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 11 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWAR DED TO : BY ORDER, ( 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//