ACIT-21(3), MUMBAI V. STURBRIDGE CORPORATION, MUMBAI

ITA 4272/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3280 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 18-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , G BENCH MUMBAI BEFORE : SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI M.BALAGANESH, A CCOUNTANT MEMBER ITA NO. 4272 /MUM/ 20 19 ( ASSESSMENT YEAR : 2011 - 12 ) ASSTT. COMMISSIONER OF INCOME TAX 21(3) MU MBAI ROOM NO.209, 2 ND FLOOR, PIRAMAL CHAMBERS, PAREL MUMBAI 400 012 VS. M/S. STURBRIDGE CORPORATION 25, HOLMOCRAFT, S.V. ROAD SANTACRUZ (W) MUMBAI 400 054 PAN/GIR NO. AABFS1130J (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI PANKAJ KUMAR ASSESSEE B Y NONE DATE OF HEARING 0 6 / 10 /2021 DATE OF PRONOUNCEMENT 20 / 10 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 4272/MUM/2019 FOR A.Y. 2011 - 12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) - 33, MUMBAI IN APPEAL NO. CIT(A) - 33/RG.21/275/14 - 15 DATED 18/04/2019 (LD. CIT(A) IN S HORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 17/10/2014 BY THE LD. ASST. COMMI SSIONER OF INCOME TAX - 18(3), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 4272/MUM/2019 M/S. STURBRIDGE CORPORATION 2 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS THAT WHETHER THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO THE EXTENT OF 30% OF RS.10,16,2 05/ - I.E. RS.3,04,862/ - MADE ON ACCOUNT OF BOGUS PURCHASES IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS A PARTN ERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF A RESIDENTIAL PROJECT KNOWN AS ALKA AT ANDHERI (E), MUMBAI. DURING THE YEAR UNDER CONSIDERATION, THE SAID PROJECT WAS COMPLETED AND ASSESSEE HAS DECLARED INCOME FROM THE SAID PROJECT. THE RETURN OF I NCOME FOR THE A.Y.2011 - 12 WAS ELECTRONICALLY FILED BY THE ASSESSEE ON 19/09/2011 DECLARING TOTAL INCOME OF RS.1,04,96,439/ - WHICH WAS DULY PROCESSED U/S.143(1) OF THE ACT. THE SCRUTINY ASSESSMENT WAS COMPLETED ORIGINALLY U/S.143(3) OF THE ACT ON 23/12/2013 ACCEPTING THE RETURN OF INCOME. SUBSEQUENTLY, BASED ON THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT OF GOVERNMENT OF MAHARASHTRA THAT ASSESSEE HAS MADE CERTAIN PURCHASES FROM CERTAIN TAINTED PARTIES TO THE TUNE OF RS.10,16,205/ - WHOSE NAMES APPEAR T O BE TAINTED DEALERS IN THE WEBSITE OF SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. ACCORDINGLY, THE ASSESSMENT OF THE ASSESSEE WAS REOPENED U/S.147 OF THE ACT AFTER DUE RECORDING OF REASONS THEREON. THE LD. AO IN THE ASSESSMENT OBSERVED THAT SINCE ASS ESSEE HAS MADE BOGUS PURCHASES OF RS.10,16,205/ - BY MAKING PURCHASES FROM TAINTED PARTIES, HE PROCEEDED TO DISALLOW THE ENTIRE SUM THEREO N IN THE ASSESSMENT. THE LD. CIT(A) HOWEVER, OBSERVED THAT ASSESSEE HAD PROVIDED FULL DETAILS OF PURCHASES WITH QUANTIT ATIVE DETAILS TOGETHER WITH CHEQUE PAYMENT PARTICULARS, PARTICULARS OF LEDGER ACCOUNTS AND COPY OF BILLS OF VARIOUS SUPPLIERS ETC., THE LD. CIT(A) OBSERVED THAT IN THESE TYPE OF TRANSACTIONS , ITA NO . 4272/MUM/2019 M/S. STURBRIDGE CORPORATION 3 ONLY PROFIT ELEMENT EMBEDDED IN THE TRANSACTION SHOULD BE BROUGH T TO TAX WHICH WAS ESTIMATED AT 30% OF THE VALUE OF PURCHASES BY THE LD. CIT(A). WE FIND THAT ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THIS ORDER BEFORE US. WE FIND THAT THE PERCENTAGE DETERMINED BY THE LD. CIT(A) IS ABOVE THE NORMAL PERCENTAGE OF PRO FIT BEING ADDED BY THIS TRIBUNAL ON ESTIMATION BASIS IN SERIES OF CASES @12.5%. SINCE, ASSESSEE HAS NOT PREFERRED ANY APPEAL BEFORE US, WE DO NOT DEEM IT FIT TO INTERFERE IN THE SAID ORDER OF THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMIS SED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 20/ 10 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( SAKTIJIT DEY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI ; DATED 20 / 10 / 2021 KARUNA , SR.PS ITA NO . 4272/MUM/2019 M/S. STURBRIDGE CORPORATION 4 COPY OF THE ORDER FORWARDED 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//