ARIHANT ENTERPRISES, NAVI MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, THANE

ITA 4350/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6052 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries; TDS
• Section: 40(a)(ia); 201; 132

Judgement Text

, ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO.4350 TO 4353/MUM/2017 ( / ASSESSMENT YEAR :2007-2008 TO 2010-2011) ARIHANT ENTERPRISES, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI - 400703 VS. DCIT, CENTRAL CIRCLE-1, THANE ./PAN NO. : AANFA 3580 C ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.4343/MUM/2017 ( / ASSESSMENT YEAR :2010-2011) ARIHANT CONSTRUCTION, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI - 400703 VS. ACIT, CENTRAL CIRCLE-1, THANE ./PAN NO. : AANFA 3580 C ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.4345 TO 4347/MUM/2017 ( / ASSESSMENT YEAR :2010-2011 TO 2012-2013) ARIHANT SUPERSTRUCTURE LTD, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI - 400703 VS. ACIT, CENTRAL CIRCLE-1, THANE ./PAN NO. : AABCS 1848 L ( /APPELLANT ) .. ( / RESPONDENT ) ./ ITA NO.4334/MUM/2017 ( / ASSESSMENT YEAR :2010-2011) ARIHANT BUILDERS, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI-400703 VS. ACIT, CENTRAL CIRCLE-1, THANE ./PAN NO. : AAQFM 0521 Q ( /APPELLANT ) .. ( / RESPONDENT ) ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 2 AND ./ ITA NO.4071 TO 4074/MUM/2017 ( / ASSESSMENT YEAR :2007-2008 TO 2010-2011) ACIT, CENTRAL CIRCLE-1, THANE VS. ARIHANT ENTERPRISES, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI-400703 ./PAN NO. : AAFFA 8639 J ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.4059/MUM/2017 ( / ASSESSMENT YEAR :2010-2011) ACIT, CENTRAL CIRCLE-1, THANE VS. ARIHANT CONSTRUCTION, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI-400703 ./PAN NO. : AANFA 3580 C ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.4068 TO 4070/MUM/2017 ( / ASSESSMENT YEAR :2010-2011 TO 2012-2013) ACIT, CENTRAL CIRCLE-1, THANE VS. ARIHANT SUPERSTRUCTURE LTD., 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI- 400703 ./PAN NO. : AABCS 1848 L ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.4060/MUM/2017 ( / ASSESSMENT YEAR :2010-2011) ACIT, CENTRAL CIRCLE-1, THANE VS. ARIHANT BUILDERS, 302. PERSIPOLILS, PLOT NO.74, SECTOR-17, VASHI, NAVI MUMBAI - 400703 ./PAN NO. : AAQFM 0521 Q ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY :SHRI MANISH JAIN & SHRI PRATIK J AIN, AR /REVENUE BY : SHRI ANADI VARMA, DR ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 3 / DATE OF HEARING : 06/12/2018 /DATE OF PRONOUNCEMENT 08/01/2019 / O R D E R PER BENCH : THESE EIGHTEEN CROSS APPEALS FILED BY THE REVENUE A ND DIFFERENT ASSESSEES ARE AGAINST THE SEPARATE ORDERS OF THE CI T(A), PUNE, ALL DATED 27.03.2017, FOR THE ASSESSMENT YEARS 2007-2008 TO 2 012-2013, RESPECTIVELY. SINCE THE ISSUES INVOLVED IN ALL THE AFOREMENTIONED APPEALS ARE COMMON BUT DIFFERENT IN FIGURES, THEREFORE, AL L THE APPEALS ARE HEARD EN MASSE AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. FIRST, WE SHALL TAKE UP THE APPEALS OF THE ASSES SEE-ARIHANT ENTERPRISES IN ITA NOS.4350 TO 4352/MUM/2017 FOR TH E ASSESSMENT YEARS 2007-2008 TO 2009-2010 ALONG WITH APPEALS OF REVENU E IN ITA NOS.4071 TO 4073/MUM/2017 FOR THE ASSESSMENT YEARS 2007-2008 TO 2009-2010. FOR THE SAKE OF CONVENIENCE, THE FACTS AND GROUNDS MENTIONED IN THE APPEAL OF THE ASSESSEE IN ITA NO.4350/MUM/2017 FOR THE ASSESSMENT YEAR 2007-2008 ARE TAKEN INTO CONSIDERATION FOR DEC IDING THE APPEALS, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL : THE FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. 1. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT 'S CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER'S IN MAKING ADDITIONS WHICH ARE NOT BASED ON MATERIALS SEIZED P URSUANT TO AN ACTION U/S 132 OF THE ACT WHICH IS ILLEGAL AND B AD IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER'S IN DISALLOWING THE PURCHASES FROM VARIOUS PARTIES WITHOUT AFFORDIN G AN OPPORTUNITY OF CROSS EXAMINING THE ALLEGED SUSPICIO US DEALERS. ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 4 3. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER'S IN DISALLOWING EXPENSES ON ACCOUNT OF ALLEGED BOGUS PURCHASES AGGR EGATING A SUM OF RS. 18,63,935/- BEING APPROXIMATELY 20% OF TOTAL ALLEGED BOGUS PURCHASES OF RS.93,19,677/- AS PER TH E GROUNDS STATED IN THE IMPUGNED ORDER. 4. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER'S IN DISALLOWING EXPENSES OF RS. 14,32,727/- BY INVOKING THE PROVISI ON OF SECTION 40(A)(IA) OF THE ACT. 5. THE APPELLANT CRAVES LEAVES TO ADD, TO AMEND, A LTER, MODIFY AND / OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS O F APPEAL, EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT PRAYS THE HON'BLE TRIBUNAL TO DELETE THE ADDITION/DISALLOWANCES MADE BY THE LD. ASSESSING OF FICER, WHICH IS CONFIRMED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS). 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF DEVELOPMENT OF PLOT AND CONSTRUCTION OF RESIDENT IAL FLATS AS WELL AS SHOPS AND OFFICE PREMISES. THE ASSESSEE FILED ORIGI NALLY ITS RETURN OF INCOME ELECTRONICALLY ON 25.09.2010 DECLARING TOTAL INCOME AT RS.NIL. THEREAFTER A SEARCH AND SURVEY ACTIONS WERE CARRIED OUT ON 18.10.2010 AT THE ASSESSEES PREMISES AND VARIOUS GROUP ENTITIES. IN RESPONSE TO THE NOTICE ISSUED U/S.153A OF THE ACT, THE ASSESSEE FIL ED RETURN OF INCOME DISCLOSING TOTAL INCOME OF THE ASSESSEE AT RS.NIL . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESS EE HAD MADE PURCHASES FROM SOME PARTIES LISTED AS HAWALA DEALER S BY THE SALES TAX DEPARTMENT. THE SALES TAX DEPARTMENT HAD EITHER REC ORDED STATEMENTS OF SUCH PERSONS OR HAD OBTAINED AFFIDAVITS FROM THEM TO THE EFFECT THAT THEY WERE ONLY PROVIDERS OF ACCOMMODATION ENTRIES AND TH EY WERE NOT ENGAGED ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 5 IN GENUINE BUSINESS ACTIVITY AT ALL. ON BEING ASKED BY THE AO, THE ASSESSEE EXPLAINED THAT THE PURCHASES WERE GENUINE AND THE STATEMENTS RECORDED BY THE SALES TAX DEPARTMENT CANNOT BE RELI ED ON WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE DEPONENTS THAT ALL THE PAYMENTS HAD BEEN MADE THROUGH BANKING CHANNELS. HOWEVER, THE AO RELYING ON THE ENQUIRIES MADE BY TH E SALES TAX DEPARTMENT, COMPLETED THE ASSESSMENT AND MADE THE D ISALLOWANCE. 4. IN APPEAL, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE, AGAINST WHICH THE ASSESSEE AND REVENUE BOTH ARE IN APPEALS BEFORE THE TRIBUNAL FOR THE RESPECTIVE ASSESSMENT YEARS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE REPORT OF THE DCIT DATED 30.11.2018 AND OBSERVE THAT THERE IS INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. THE ISSUE RAISED IN GROUND NO .1 IN ALL THE THREE APPEALS OF THE ASSESSEE-ARIHANT ENTERPRISES FOR THE ASSESSMENT YEAR 2007-2008 TO 2009-2010 IS AGAINST THE ORDER OF CIT( A) UPHOLDING THE ORDER OF AO THEREBY CONFIRMING THE VARIOUS ADDITION S WITHOUT APPRECIATING THE FACT THAT THERE IS NO INCRIMINATING SEIZED MATE RIAL FOUND DURING THE COURSE OF SEARCH U/S.132 OF THE ACT. A SEARCH IN TH E CASE OF THE ASSESSEE WAS CONDUCTED ON 18.10.2010 AND THE YEAR UNDER CONS IDERATION HAS ATTAINED FINALITY ON THE DATE OF SEARCH AND, THEREF ORE, IT WAS AN UNABATED ASSESSMENT. THE ISSUE RAISED BY THE ASSESSEE IN THE SE APPEALS I.E. ITA NOS.4350 TO 4352/MUM/2017 FOR A.Y.2007-08 TO 2009-1 0 ARE AGAINST THE PART CONFIRMATION OF ADDITION MADE ON ACCOUNT OF BO GUS PURCHASES AND ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 6 SOME EXPENSES U/S.40(A)(IA) OF THE ACT, WHEREAS THE ISSUE IN THE APPEALS OF THE REVENUE IN ITA NOS.4071 TO 4073/MUM/2017 FOR THE A.Y.2007-08 TO 2009-10 IS AGAINST THE RELIEF ALLOWED BY THE CIT (A) TO THE ASSESSEE ON ACCOUNT OF VARIOUS BOGUS PURCHASES. 6. AFTER HEARING THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE OBSERVE THAT THIS IS UNDISPUTED THAT THE RE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH PROCEEDI NGS, MEANING THEREBY THAT ADDITIONS MADE BY THE AO ON ACCOUNT OF BOGUS P URCHASE AND DISALLOWANCE OF EXPENSES U/S.40(A)(IA) OF THE ACT F OR NON-DEDUCTION OF TDS AT SOURCE ARE WITHOUT ANY INCRIMINATING MATERI AL AND ARE FULLY BASED ON FACTS AND INFORMATION WHICH CAME INTO THE NOTICE OF THE AO DURING THE COURSE OF SEARCH. IT IS ALSO SETTLED LAW THAT NO AD DITION CAN BE MADE IN THE CASE OF UNABATED ASSESSMENT EXCEPT ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE CAS E OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATIO N LTD (NHAVA-SHEVA) (2015) 374 ITR 645(BOM) WHEREIN THE HONBLE JURISDI CTIONAL HIGH COURT HAS HELD THAT NO ADDITION WHICH IS NOT BASED UPON T HE INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH COULD B E MADE IN THE CASE OF UNABATED ASSESSMENT AS THE ASSESSMENT HAS ATTAINED FINALITY AND IT IS NOT OPEN TO THE AO TO DISTURB THE SAME. THE CASE OF THE ASSESSEE IS ALSO SQUARELY COVERED BY THE DECISION OF COORDINATE BENC H OF THE TRIBUNAL IN ITA NOS.1008 TO 1010/MUM/2016, AYS.2005-06 TO 2007- 08, ORDER DATED 04.06.2018, IN THE CASE OF M/S ABHISHEK ENTERPRISES , A SISTER CONCERN ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 7 WHEREIN THE SIMILAR ADDITIONS MADE WERE DELETED FO R THE WANT OF INCRIMINATING MATERIAL. IN VIEW OF THE ABOVE, THE A DDITION MADE BY THE AO IS WITHOUT JURISDICTION AND CANNOT BE SUSTAINED. AC CORDINGLY, WE REVERSE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE AND EXPENSES DISALLOWED N ON-DEDUCTION OF TDS AT SOURCE U/S.40(A)(IA) OF THE ACT. ACCORDINGLY , THE APPEALS OF THE ASSESSEE IN ITA NOS.4350 TO 4352/MUM/2017 FOR THE A SSESSMENT YEARS 2007-2008 TO 2009-2010 ARE ALLOWED. 7. SINCE WE HAVE DIRECTED THE AO TO DELETE THE ADDI TION MADE ON ACCOUNT OF BOGUS PURCHASE AND NON-DEDUCTION OF TDS AT SOURCE U/S.40(A)(IA) OF THE ACT, WHILE DECIDING THE APPEAL S OF ASSESSEE IN ITA NOS.4350 TO 4352/MUM/2017 FOR THE ASSESSMENT YEARS 2007-2008 TO 2009-2010, AS NO ADDITION CAN BE MADE IN THE CASE U NABATED ASSESSMENT WHERE THERE IS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, THEREFORE, THE APPEALS OF THE REVENUE HAVE NO LEGS TO STAND AND ACCORDINGLY, WE DISMISS THE APPEALS OF THE REVENUE IN ITA NOS.4071 TO 4073/MUM/2017 FOR THE ASSESSMENT YEARS 2007-08 TO 2 009-10, RESPECTIVELY. 8. NOW, WE SHALL TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.4353/MUM/2017 AND APPEAL OF THE REVENUE IN ITA NO.4374/MUM/2017 FOR THE ASSESSMENT YEAR 2010-2011. IN THE APPEAL OF THE ASSESSEE THE ONLY ISSUE IS IN RESPECT OF PART C ONFIRMATION OF THE DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE BY THE CI T(A) AND IN THE ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 8 APPEAL OF THE REVENUE, THE REVENUE IS AGGRIEVED BY THE RELIEF GRANTED BY THE CIT(A). 9. BRIEF FACTS ARE THAT ON THE DATE OF SEARCH ON 18.10.2010, THE ASSESSMENT HAS NOT ATTAINED FINALITY AND THUS IS AN ABATED ASSESSMENT . THE POWER OF THE AO IN SUCH TYPE OF SCENARIO ARE S IMILAR TO POWERS AS UNDER NORMAL SCRUTINY PROCEEDINGS , MEANING THEREBY THAT THE AO COULD MADE ANY ADDITION WHICH COMES TO THE NOTICE OF THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THIS CASE, THE ONLY I SSUE DISPUTED IS QUA THE ADDITION ON ACCOUNT OF BOGUS PURCHASE WHICH HAS BEEN MADE BY THE AO TO THE TUNE OF RS.50,21,595/- AND IN THE APPELLA TE PROCEEDINGS BEFORE THE CIT(A) REDUCED IT TO 20% OF THE SAID BOGUS PURC HASE. 10. LD. AR AT THE OUTSET, SUBMITTED THAT THE CASE O F THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF COORDINATE BENC H OF THE TRIBUNAL IN THE CASE OF ONE OF THE ASSESSEES SISTER CONCERN I N THE SAME SEARCH I.E. IN THE CASE OF M/S MAHAAVIR UNIVERSAL HOMES PVT. LT D. IN ITA NOS.4348&4349/MUM/2017 FOR THE ASSESSMENT YEAR 2011 -2012 & 2012- 2013, ORDER DATED 28.11.2018, WHEREIN THE DISALLOWA NCE MADE ON ACCOUNT OF BOGUS PURCHASE HAS BEEN PARTLY CONFIRMED BY THE TRIBUNAL AT 3% OF THE BOGUS PURCHASE AND THE PRESENT APPEAL SHO ULD BE DECIDED FOLLOWING THE SAME. 11. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT UNDER THE IDENTICAL FACTS AND IN THE CASE OF ASSESSEES GROUP CONCERN, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MAHAAVIR UNIVERSAL HOMES PVT. LTD. (SUPRA) HAS DIRE CTED THE AO TO APPLY ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 9 A GP RATE OF 3% TO ASSESS THE BOGUS PURCHASE UNDER SIMILAR FACTS. WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAME, DIRECT THE AO TO APPLY THE GP RATE OF 3% OF THE BOGUS PURCHASE. ACCORDINGLY, WE P ARTLY ALLOW THE APPEAL OF THE ASSESSEE IN ITA NO.4353/MUM/2017 FOR THE ASS ESSMENT YEAR 2010- 2011. 12. SINCE WE HAVE DIRECTED THE AO TO APPLY THE GP R ATE OF 3% OF THE BOGUS PURCHASE WHILE DECIDING THE APPEAL OF THE ASS ESSEE IN ITA NO.4353/MUM/2017 FOR THE ASSESSMENT YEAR 2010-2011, THEREFORE, WE DISMISS THE APPEAL OF THE REVENUE IN ITA NO.4374/MU M/2017 FOR THE ASSESSMENT YEAR 2010-2011. 13. NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E-M/S ARIHANT CONSTRUCTION IN ITA NO.4343/MUM/2017 AND APPEAL OF THE REVENUE IN ITA NO.4059/MUM/2017 FOR THE ASSESSMENT YEAR 2010-2011. 14. THE ASSESSMENT IN THE CASE OF ASSESSEE-M/S ARIH ANT CONSTRUCTION IS ABATED AND DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE AO DISALLOWED BOGUS PURCHASE OF RS.87,14,444/- BEING 1 00% OF THE TOTAL BOGUS PURCHASE AND IN APPELLATE PROCEEDINGS, THE C IT(A) HAS PARTLY CONFIRMED TO THE TUNE OF 15% OF THE TOTAL BOGUS PUR CHASE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AND T HE REVENUE IS AGGRIEVED BY THE RELIEF GRANTED BY THE CIT(A). 15. AT THE OUTSET, LD. AR BEFORE SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MAHAAVIR UNIVERSAL HOMES PVT. LTD. IN ITA NOS.4348&4349/MUM/2017 FOR T HE ASSESSMENT ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 10 YEAR 2011-2012 & 2012-2013, ORDER DATED 28.11.2018, WHEREIN THE DISALLOWANCE MADE ON ACCOUNT OF BOGUS PURCHASE HAS BEEN PARTLY CONFIRMED BY THE LD. CIT(A) AT 3% OF THE BOGUS PURC HASE. 16. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT UNDER THE IDENTICAL FACTS AND IN THE CASE OF ASSESSEES GROUP CONCERN, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MAHAAVIR UNIVERSAL HOMES PVT. LTD. (SUPRA) HAS DIRE CTED THE AO TO APPLY A GP RATE OF 3% TO ASSESS THE BOGUS PURCHASE. WE, T HEREFORE, RESPECTFULLY FOLLOWING THE SAME, DIRECT THE AO TO A PPLY THE GP RATE OF 3% OF THE BOGUS PURCHASE. ACCORDINGLY, WE PARTLY ALLOW THE APPEAL OF THE ASSESSEE IN ITA NO.4343/MUM/2017 FOR THE ASSESSMENT YEAR 2010-2011. 17. SINCE WE HAVE DIRECTED THE AO TO APPLY THE GP R ATE OF 3% OF THE BOGUS PURCHASE WHILE DECIDING THE APPEAL OF THE ASS ESSEE IN ITA NO.4343/MUM/2017 FOR THE ASSESSMENT YEAR 2010-2011, THEREFORE, WE DISMISS THE APPEAL OF THE REVENUE IN ITA NO.4059/MU M/2017 FOR THE ASSESSMENT YEAR 2010-2011. 18. NOW, WE SHALL TAKE UP THE APPEALS OF THE ASSESS EE-M/S ARIHANT SUPERSTRUCTURE LTD. IN ITA NOS.4345 TO 4347/MUM/201 7 AND APPEALS OF THE REVENUE IN ITA NOS.4068 TO 4070/MUM/2017 FOR TH E ASSESSMENT YEARS 2010-11 TO 2012-13. 19. WE HAVE DECIDED THE SIMILAR ISSUE WHILE CONSIDE RING THE APPEAL OF ASSESSEE IN CASE OF ARIHANT ENTERPRISES IN ITA NOS .4353 2010-2011 SUPRA WHEREIN THE DISALLOWANCE MADE ON ACCOUNT OF B OGUS PURCHASE HAS BEEN PARTLY CONFIRMED BY US AT 3% OF THE BOGUS P URCHASE. THEREFORE, ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 11 THE ABOVE FINDINGS GIVEN BY US IN ITA NOS.4353/MUM/ 2010 FOR THE ASSESSMENT YEARS 2010-11 SHALL APPLY, MUTATIS MUTANDIS, TO THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-2011 TO 2012-2013 IN ITA NOS.4345 TO 4347/MUM/2017 AS WELL. THE APPEALS OF T HE ASSESSEE ARE PARTLY ALLOWED. 20. SINCE WE HAVE DIRECTED THE AO TO APPLY A GP RAT E OF 3% ON THE BOGUS PURCHASES IN THE ASSESSEES APPEALS IN ITA NO . 4353/MUM/2017 TO ITA NO.4347/MUM/2017 , THEREFORE, THE APPEALS OF TH E REVENUE HAVE NO LEGS TO STAND AND ACCORDINGLY, WE DISMISS THE APPEA LS OF THE REVENUE IN ITA NOS.4068 TO 4070/MUM/2017 FOR THE ASSESSMENT YE ARS 20010-11 TO 2012-13, RESPECTIVELY. 21. NOW, WE SHALL TAKE UP THE APPEAL OF ASSESSEE-M/ S ARIHANT BUILDERS IN ITA NO.4334/MUM/2017 FOR THE ASSESSMENT YEAR 201 0-2011 AND THE APPEAL OF REVENUE IN ITA NO.4060/MUM/2017 FOR THE A SSESSMENT YEAR 2010-2011. 22. WE HAVE DECIDED THE SIMILAR ISSUE WHILE CONSIDE RING THE APPEAL OF ASSESSEE IN CASE OF ARIHANT ENTERPRISES IN ITA NOS .4353 2010-2011 SUPRA WHEREIN THE DISALLOWANCE MADE ON ACCOUNT OF B OGUS PURCHASE HAS BEEN PARTLY CONFIRMED BY US AT 3% OF THE BOGUS P URCHASE. THEREFORE, THE ABOVE FINDINGS GIVEN BY US IN ITA NOS.4353/MUM/ 2010 FOR THE ASSESSMENT YEARS 2010-11 SHALL APPLY, MUTATIS MUTANDIS, TO THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-2011 IN ITA NOS.4334/MUM/2017 AS WELL AND THE ADDITIONS ON BOGU S PURCHASES IS DIRECTED TO BE MADE AT 3%. THE APPEAL OF THE ASSESS EE IS PARTLY ALLOWED. ITA NO.4350/17 ALONG WITH 17 CONNECTED APPEALS 12 23. SINCE WE HAVE DIRECTED THE AO TO APPLY A GP RAT E OF 3% ON THE BOGUS PURCHASES IN THE ASSESSEES APPEALS IN ITA NO . 4353/MUM/2017, THEREFORE, THE APPEAL OF THE REVENUE HAVE NO LEGS T O STAND AND ACCORDINGLY, WE DISMISS THE APPEAL OF THE REVENUE I N ITA NOS.4060/MUM/2017 FOR THE ASSESSMENT YEARS 20010-11 . 24. IN THE RESULT, APPEALS OF THE ASSESSEE IN ITA N OS.4350 TO 4352/MUM/2017 ARE ALLOWED. ITA NOS.4343, 4353, 4334 & 4345 TO 4347/MUM/2017 ARE ALLOWED PARTLY AND ALL THE APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/01/2019. SD/- (MAHAVIR SINGH) SD/- (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/01/2019 . . /PRAKASH KUMAR MISHRA , SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSISTANT 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//