ITO 31(2)(3), MUMBAI V. MUKESH M PARMAR, MUMBAI

ITA 4172/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7734 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 07-07-2015
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER I.T.A. NO.4172/M/2015 (ASSESSMENT YEAR: 2009 - 2010 ) I.T.A. NO. 4173 /M/2015 (ASSESSMENT YEAR: 2011 - 2012 ) ITO - 31(2)(3), R.NO.704, C - 11, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (E), MUMBAI 400 051. / VS. MR. MUKESH M. PARMAR, B - 16, SHREYAS INDUSTRIAL ESTATE, NR. JAY COACH, GOREGAON (E), MUMBAI 400 063. ./ PAN : AAEPP2846H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JOTHILAKSHMI NAYAK, DR / RESPONDENT BY : NONE / DATE OF HEARING : 16 .03.2017 / DATE OF PRONOUNCEMENT : 29 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2009 - 2010 AND 2011 - 2012. SINCE, THE ISSU ES RAISED IN THESE APPEALS ARE IDENTICAL / INTER - CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. ITA NO.4172/M/2015 (AY 2009 - 2010) 2. THIS APPEAL FILED BY THE REVENUE ON 7.7.2015 IS AGAINST THE ORDER OF THE CIT (A) - 42, MUMBAI DATED 24.4.2015 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 55,63,393/ - MADE ON ACCOUNT OF UNEXPLAINED PURCHASES MADE FROM M/S. MAHAVIR ENTERPRISES AND M/S. S.S. ENTERPRISES AND DIRECTING THE AO TO TA X 15.73% OF BOGUS PURCHASES BEING GROSS PROFIT MARGIN IGNORING THE FACT THAT THESE TWO PARTIES ARE INCLUDED IN THE LIST OF SUSPICIOUS AND / OR HAWALA DEALERS PROVIDED BY THE SALES TAX DEPARTMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 55,63,393/ - MADE ON ACCOUNT OF UNEXPLAINED PURCHASES IGNORING 2 THE FACT THAT THE NOTICES ISSUED TO M/S. MAH AVIR ENTERPRISES AND M/S. S.S. ENTERPRISES U/S 133(6) OF THE ACT WERE RECEIVED BACK UNSERVED . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 55,63,393/ - MADE ON ACCOUNT OF UNEXPLAINED PURCHASES IGNORING THE FACT THAT THE ONUS LIES ON ASSESSEE TO PRODUCE THE CONCERNED PARTIES W HICH ASSESSEE FAILED TO DO. 3. AT THE OUTSET, LD DR FOR THE REVENUE MENTIONED THAT THERE IS NONE TO REPRESENT THE CASE OF THE ASSESSEE. CONSIDERING THE COVERED NATURE OF THE ISSUES INVOLVED IN THE APPEAL, LD DR IS OF THE OPINION, THE MATTER CAN BE ADJ UDICATED BY THE BENCH. NARRATING THE FACTS OF THE CASE, LD DR MENTIONED THAT THIS IS A CASE OF BOGUS PURCHASES INVOLVING SALES TAX DEPARTMENT. IN THE ASSESSMENT, AO MADE ADDITION OF RS. 55,66,393/ - BEING PURCHASES MADE FROM THE COUPLE OF SUPPLIERS, WHO SE NAMES APPEARED IN THE OFFICIAL WEBSITE OF THE SALES TAX DEPARTMENT. THERE IS AN ALLEGATION REGARDING THE VIOLATION OF VAT PROVISIONS. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, CIT (A) RELIED ON CERTAIN PRECEDENTS AND RESTRICT ED THE ADDITION TO THE AVERAGE GP RATE OF 15.73%. ACCORDINGLY, CIT (A) PARTLY ALLOWED THE APPEALS OF THE ASSESSEE. AGGRIEVED WITH THE SAID RELIEF GRANTED BY THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. HOWEVER, NOTHING IS BROUGHT TO OUR NOTICE ABOUT THE EXISTENCE OF ANY APPEAL BY THE ASSESSEE REGARDING THE CONFIRMATION OF THE ADDITION OF RS. 8,75,122/ - . 5. ON HEARING THE LD DR FOR THE REVENUE AND ALSO ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US, WE ARE OF THE CONSIDERED OPINION, THE CIT (A) IS JUSTIFIED IN NOT CONFIRMING THE ENTIRE ADDITION AS SALES ACCOUNT OF THE ASSESSEE STANDS UNDISTURBED. THIS LINE OF ADJUDICATION HAS THE STRENGTH OF JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE O F CIT VS. NIKUNJ EXIMP ENTERPRISES PVT LTD (216 TAXMAN.COM 171) (BOM.) AND JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SETH (356 ITR 451) (GUJ.) . CONSIDERING THE OVERALL FACTUAL MATRIX OF THE CASE, WE ARE OF THE OPINION, THE DECISION TAKEN BY THE CIT (A) VIDE PARA 3.5 OF HIS ORDER IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ITA NO.4173/M/2015 ( AY 2011 - 2012) 7. THIS APPEAL FILED BY THE REVENUE ON 7.7.2015 IS AGAINST THE ORDER OF THE CIT (A) - 42, MUMBAI DATED 24.4.2015. IN THIS APPEAL, REVENUE RAISED THREE GROUNDS AND 3 THEY ARE IDENTICAL TO THAT OF THE ONES RAISED BY THE REVENUE IN ITS APPEAL FOR T HE AY 2009 - 2010 (SUPRA). 8. IN THIS APPEAL, DIFFERENT FACTS INCLUDE THAT THE ADDITION ON ACCOUNT OF BOGUS PURCHASES AMOUNTING TO RS. 1,88,47,826/ - AND THE CIT (A) RESTRICTED THE ADDITION TO 12.67%. OTHERWISE, PRINCIPLE FOLLOWED BY THE CIT (A) IN ADJUD ICATING THE APPEAL IS ONE AND THE SAME MENTIONED ABOVE IN CONNECTION WITH THE APPEAL ITA NO.4172/M/2015 FOR THE AY 2009 - 2010 (SUPRA). CONSIDERING THE IDENTICALNESS OF THE ISSUES INVOLVED IN BOTH THE APPEALS, OUR ADJUDICATION GIVEN ON THE REVENUES APPEAL FOR THE AY 2009 - 2010 (SUPRA) APPLIES TO THE PRESENT APPEAL TOO. CONSIDERING THE SAME, THE DECISION GIVEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE DISMI SSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED 10. CONCLUSIVELY, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2017 . SD/ - SD/ - (RAVISH SOOD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 29.03 .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