ITO WD 1(4), THANE V. INDIRA A. ROHRA, THANE

ITA 4553/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9698 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABHA KUMAR RAI
• Keywords: Bogus purchase; Accommodation entries
• Section: 69C; 143(3); 133(6); 148

Judgement Text

ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI G.S PANNU , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO. 4560 /MUM/201 5 ( / ASSESSMENT YEAR: 20 10 - 1 1 ) INDIRA A. ROHRA 4 /A, SHALIMAR SOCIETY, KOPRI COLONY, THANE(E) - 400 604 / VS. ITO , WARD - 1(4) , THANE. ./ ./ PAN/GIR NO. AAQPR0172A ( / APPELLANT ) : ( / RESPONDENT ) ./ I.T.A. NO. 4553/MUM/2015 ( / ASSESSMENT YEAR: 2010 - 11) ITO, WARD - 1(4) THANE. / VS. INDIRA A. ROHRA 4/A, SHALIMAR SOCIETY, KOPRI COLONY, THANE(E) - 400604 ./ ./ PAN/GIR NO. AAQPR0172A ( / APPELLANT ) : ( / RESPONDENT ) / ASSESSEE BY : SHRI DHARMESH SHAH & SHRI. ASHWIN KASHINATH / REVENUE BY : SHRI SAURABHA KUMAR RAI, D.R. / DATE OF HEARING : 07 /0 6 /2017 / DATE OF PRONOUNCEMENT : 31 /07/2017 ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 2 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER THE PRESENT CROSS APPEAL S FILED BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 1, MUMBAI, DATED 29 .0 5 .201 5 , FOR A.Y. 2010 - 11, WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O U/S 143(3) R.W.S 147 OF THE INCOME - TAX ACT 1961 (FOR SHORT ACT), DATED 10.03. 2014. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN PARTIALLY UPHOLDING THE ACTION OF THE A.O IN MAKING AN ADDITION OF RS. 54,29,738/ - U/S 69C OF THE ACT BEING ALLEGED BOGUS PURCHASES FROM ALLEGED HAWALA DEALERS BY CONFIRMING THE SAME AT 2 5% OF THE ORIGINAL ADDITION AMOUNTING TO RS. 13,57,435/ - 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE CHARGEABILITY OF INTEREST U/S 234A,234B & 234C. 3. THE APPELLANT CRAVES LEAVE OF YOUR HONOURS TO ADD TO, ALTER AND/OR DELETE ALL OR ANY OF THE GROUNDS ON OR BEFORE THE DATE OF HEARING AND FURTHER PRAYS THAT ADDITIONAL INCOME SO ASSESSED AND EXPENDITURE DISALLOWED BE DELETED AND ALLOWED. THE REVENUE ON THE OTHER HAND BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS OF APPEAL: 1 .1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE HONBLE CIT(A) ERRED IN NOT CONFIRMING ADDITION AT 100% OF BOGUS PURCHASES OF RS. 54,29,738/ - OUT OF TOTAL PURCHASES OF RS. 1,24,04,444/ - DESPITE HOLDING THAT ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 3 THE PURCHASES OF RS . 54,29,738/ - WERE NO GENUINE AND THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS EVEN AFTER GIVING AMPLE OPPORTUNITIES. 1.2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , AND IN LAW, THE HONBLE CIT(A) ERRED IN DELETING THE ABOVE ADDITION DESPITE THE FACT THAT THE ASSESSEE FAILED TO DISCHARGE HIS ONUS OF PROVING THE PURCHASES. 1.3 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE HONBLE CIT(A) ERRED IN DELETING THE ABOVE ADDITION DESPITE THE FA CT HAT THE ASSESSEE FAILED TO EVEN FURNISH QUANTITATIVE TALLY OF THE STOCK AS STATED BY CIT(A) IN PARA 5 OF HIS ORDER 2. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND , ALTER OR DELETE ANY GROUND OF APPEAL. THAT AS COMMON ISSUE IS INVOLVED IN THE AFORESAID C ROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, THEREFORE , THEY ARE TAKEN UP TOGETHER AND DISPOSED OF BY WAY OF A CONSOLIDATE ORDER. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLASTIC & RUBBER GOODS HAD E - FILED HER RETURN OF INCOME FOR A.Y. 20 10 - 11 ON 27 .09.20 10 , DECLARING TOTAL INCOME AT RS. 5,70,670 / - . THAT ON THE BASIS OF INFORMATION RE CEIVED BY THE A.O FROM THE SALES TAX DEPARTMENT, MAHARASHTRA, THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD BOOKED BOGUS PURCHASES, THE CASE OF THE ASSESSEE WAS REOPENED AFTER RECORDING THE REASONS TO BELIEVE AND A NOTICE U/S. 148 WAS ISSU ED AND SERVED UPON THE ASSESSEE. 3. THAT FROM THE INFORMATION RECEIVED BY THE A.O FROM THE SALES TAX DEPARTMENT , IT EMERGED THAT THE ASSESSEE D URING THE YEAR UNDER CONSIDERATION HAD TAKEN ACCOMMODATION ENTRIES OF BOGUS PURCHASES FROM THE FOLLOWING CONC ERNS: - ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 4 SR.NO. PARTICULARS AMOUNT OF THE BILLS 1 . AMBIKA TRADE IMPEX RS. 3,30,439/ - 2 . SHAH ENTERPRISE RS. 2,13,408/ - 3 . SHARDHA TRADING CO. RS. 12,81,633/ - 4 . SOMNATH INTERNATIONAL RS. 13,91,384/ - 5 . BHUMI SALES CORPORATION RS. 5,88,281/ - 6 . JAY INDUSTRIES RS. 2,38,482/ - 7 . MOKSH TRADING COMPANY RS. 5,33,135/ - 8 . V M UDYOG RS. 6,40,036/ - 9. SAJ ENTERPRISES RS. 2,12,940/ - TOTAL RS. 54,29,738/ - THE A.O WAS INFORMED BY THE SALES TAX DEPARTMENT THAT THE AFOREMENTIONED CONCERNS WH ICH WERE ENGAGED IN THE BUSINESS OF PROVIDING BOGUS PURCHASE BILLS, HAD ON THE BASIS OF THEIR RESPECTIVE AFFIDAVITS FILED WITH THE AUTHORITIES DEPOSED THAT THEY WERE NOT DOING ANY GENUINE BUSINESS OF PURCHASE AND SALE OF GOODS AND HAD MERELY PROVID ED BOGUS BILLS TO THE BENEFICIARIES AND NO GOODS AS MENTIONED IN THE PURCHASE BILLS WERE ISSUED BY THEM . THE A.O THUS ACTING UPON THE AFORESAID INFORMATION, THUS IN OR DER TO VERIFY THE GENUINENESS AND VERACITY OF THE AFORESAID PURCHASE TRANSACTIONS OF THE ASSESSEE CALLED FOR INFORMATION UNDER SEC. 133(6) FROM THE AFOREMENTIONED PARTIES, VIDE LETTERS DATED. 25.09.2013 & 15.10.2013 WHICH WERE DESPATCHED BY POST, HOWEVER , ALL OF THE RESPECTIVE LETTERS WERE RECEIVED BACK WITH THE REMARKS NOT KNOWN. 4. THE A.O IN THE BACKDROP OF THE AFORESAID STATE OF AFFAIRS, THUS VI DE HIS LETTER DATED. 11.11.2013 CA LLED UPON THE ASSESSEE TO PRODUCE ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 5 THE RESPECTIVE SUPPLIER PARTIES SO THA T THE GENUINENESS AND VERACITY OF T HE PURCHASE TRANSACTIONS COULD BE VERIFIED. THE ASSESSEE HOWEVER NEITHER PRODUCED THE RESPECTIVE PARTIES, NOR FURNISHED THE EXACT WHEREABOUTS OF THE LATTER TO THE A.O. THE A.O THUS IN THE BACKDROP OF THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, AND KEEPING IN VIEW THE CONDUCT OF THE ASSESSEE, THEREIN CONCLUDED THAT THE ASSESSEE HAD NOT CARRIED OUT ANY GENUINE PURCHASES FROM THE AFORESAID PARTIES AND HAD ONLY P ROCURED BOGUS BILLS FROM THEM. THE A.O THUS ON THE BASIS OF HIS AFORESAID CONVICTION, THUS HELD THE ENTIRE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFORESAID PARTIES AS NON - GENUINE AND MADE AN ADDITION OF RS. 54,29,738/ - UNDER SEC. 69 C TO THE RETURNED INCOME OF THE ASSESSEE . 5. THE ASSESSEE BEING AGGRIEVED WI TH THE ADDITION MADE BY THE A.O CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A.O , AND THEREIN AVERRED THAT IT HAD CARR IED OUT GENUINE PURCHASE TRANSACTIONS FROM THE AFORESAID PARTIES . THE ASSESSEE FURTHER SUBMITTED BEFORE THE CIT(A) THAT THOUGH IN LIGHT OF THE PE CULIAR NATURE OF ITS BUSINESS NO STOCK REGISTER WAS BEING MAINTAINED, BUT HOWEVER FURNISHED AN INVENTORY OF TH E PURCHASE OF RAW MATERIALS OF VARIOUS TY P ES AND CONSUMPTIONS THEREOF , WHICH COMPILATION WAS CLAIMED BY HER TO HAVE ALSO BEEN FURNISHED WITH THE A.O. THE ASSESSEE IN THE BACKDROP OF HER CONTENTION THAT SHE HAD CARRIED OUT GENUINE PURCHASES FROM THE AFORESAID SUPPLIER PARTIES, THEREIN AVERRED THAT THE SAME MAY BE ALLOWED . ALTERNATIVELY, THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT AN ADDITION OF 25% MAY BE MADE AND THE LITIGATION BE BROUGHT TO AN END. THE A SSESSEE IN ORDER TO SUPPORT HER CONTENTIONS FURTHER RELIED ON A HOST OF JUDICIAL PRONOUNCEMENTS. ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 6 6. THE CIT(A) DELIBERATED ON THE CONTENTIONS RAISED BY THE ASSESSEE BEFORE HIM IN THE BACKDROP OF THE FACTS OF THE CASE. THE CIT(A) OBSERVED THAT THE ASSESSE E INSTEAD OF SUBSTANTIATING THE GENUINENESS AND VERACITY OF THE PURCHASE TRANSACTIONS CLAIMED TO HAVE BEEN MADE BY HER FROM THE AFORESAID RESPECTIVE SUPPLIER PARTIES, VIZ. BY PRODUCING THE NECESSARY PARTIES FOR EXAMINATION BY THE A.O, PLACING ON R ECORD COP Y OF THE CONFIRMATIONS, CURRENT MAILING ADDRESS OF THE PARTIES , COPY OF THE DELIVERY CHALLANS, TRANSPORT RECEIPTS, BANK STATEMENTS AND OTHER RELATED DETAILS, HOWEVER , MERELY TOOK SUPPORT OF THE FACT THAT THE PAYMENTS IN RESPECT OF THE SAID PURCHASE TRANSACTIONS WERE MADE BY HER TO THE AFORESAID PARTIES VIDE ACCOUNT PAYEE CHEQUES. THE CIT(A) THUS IN THE TOTALITY OF THE FACTS OF THE CASE HELD THAT THAT AS THE ASSESSEE HAD GROSSLY FAILED TO SUBSTANTIATE THE HEAVY O NUS A S WAS CAST UPON HER TO PROV E THE GENUINENESS AND VERACITY OF THE PURCHASE TRANSACTIONS, THEREFORE , IT COULD SAFELY BE CONCLUDED THAT THE ASSESSEE HAD ONLY OBTAINED BOGUS BILLS FR OM THE AFORESAID HAWALA PARTIES AND NO GENUINE PURCHASES WERE MADE FROM THEM . 7. THE CIT(A) AFTER CONCLUDING THAT THE ASSESSEE HAD MERELY OBTAINED BOGUS BILLS FROM THE AFORESAID PARTIES, THEREIN OBSERVED THAT THE SALES CORRESPONDING TO THE SAID PURCHASE TRANSACTIONS WERE ALSO FOUND RECORDED IN THE PROFIT & LOSS A/C OF TH E ASSESSEE. THE AFORESAID VIEW OF THE CIT(A) THAT THE ASSESSEE HAD ROUTED BOTH THE PURCHASE TRANSACTIONS UNDER CONSIDERATION, AS WELL AS THE CORRESPONDING SALES THROUGH HER BOOKS OF ACCOUNTS, WAS FURTHER FORTIFIED FROM THE FACT THAT THE GP/NP RATE SH OWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS FOUND TO BE IN CONFORMITY WITH TH AT REFLECTED IN THE PRECEDING YEARS. THE CIT(A) THUS BEING OF THE CONSIDERED VIEW THAT NOW WHEN BOTH THE PURCHASE S AND CORRESPONDING SALE TRANSACTIONS STOOD ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 7 RECORDED IN THE BOOKS OF ACCOUNTS, THEREFORE, IN THE ABSENCE OF GENUINE BILLS IT COULD SAFELY BE CONCLUDED THAT THE ASSESSEE HAD DEBITED THE PURCHASES UNDER CONSIDERATION AT A VALUE WHICH WAS HIGHER THAN THAT AT WHICH THE SAID GOODS WERE PURCHASED/PROC URED BY HER FROM THE OPEN/GREY MARKET . THE CIT(A) THUS BEING OF THE CONSIDERED VIEW THAT THE ASSESSEE HAD INFLATED HER PURCHASES, THEREIN RELYING ON THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES VS. CIT (200 8) 316 ITR 274 (GUJ) AND THE ORDER OF THE ITAT, AHEMDABAD IN THE CASE OF VIJAY PROTEINS LTD. VS. ACIT (58 I T D 428) (AHD) THUS CONCLUDED THAT DISALLOWANCE OF 25% OF THE AGGREGATE VALUE OF THE HAWALA PURCHASES WOULD BE REASONABLE AND MEET THE ENDS OF JUSTI CE . THE CIT(A) IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS RESTRICTED THE DISALLOWANCE OF PURCHASES AT RS. 13,57,434/ - (OUT OF THE TOTAL PURCHASES OF RS. 54,29,738/ - ) AND RESULTANTLY DELETED THE BALANCE ADDITION OF RS. 40,72,304/ - [RS. 54,29,738/ - ( - ) R S. 13,57,434/ - ]. 8. THAT BOTH THE ASSESSEE AND THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A), WHEREIN THE LATTER HAD RESTRICT ED /UPH ELD THE ADDITION IN RESPECT OF BOGUS PURCHASES AT RS. 13,57,434/ - (SUPRA), HAD CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AVERRED THAT THE CIT(A) HAD MOST ARBITRARILY SUSTAINED 25% OF THE VALU E OF THE PURCHASES UNDER CONSIDERATION , WHICH AS PER HIM WERE HIGHLY PITCHED. IT WAS SUBMITTED BY THE LD. A.R THAT NOW WHEN BOTH THE PURCHASE TR ANSACTIONS UNDER CONSIDERATION AND THE CORRESPONDING SALES WERE FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, THE ADDITION @25% OF THE VALUE OF THE PURCHASES COULD NOT BE SUSTAINED. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION RELIED ON A HOST OF JUDICIAL PRONOUNCEMENTS. PER CONTRA, THE LD. DEPARTMENTAL ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 8 REPRESENTATIVE (FOR SHORT D. R) RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT - II, CHANDIGARH VS. NARENDER KUMAR GUPTA (2015) 55 TAXMANN.COM 371 (PUNJAB & HARYANA) AN D THE ORDER PASSED BY THE HONBLE SUPREME COURT WHILE DISMISSING THE SPECIAL LEAVE PETITION (SLP) OF THE ASSESSEE IN THE CASE OF N.K PROTEINS LTD. VS. DCIT [SLP(C)CC NO(S).769 OF 2017] . THE LD. D.R TAKING SUPPORT OF THE AFORESAID JUDICIAL PRONOUNCEMENTS, THEREIN SUBMITTED THAT THE ADDITION OF TH E ENTIRE AMOUNT OF THE BOGUS PURCHASES OF RS. 54,29,738/ - WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED BY THE LD. D.R THAT THE CIT(A) HAD ERRED IN RESTRICTING THE ADDITION IN THE HANDS OF THE ASSESSEE ONLY UPTO 25% OF THE VALUE OF THE PU RCHASES UNDER CONSIDERATION. 9. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT A PERUSAL OF THE FACTS AVAILABLE ON RECORD REVEALS THAT TH E NAME OF THE ASSESSEE FIGURED IN THE LIST OF THE BENEFICIARIES WHO HAD PROCURED BOGUS BILLS . THAT IN THE BACKDROP OF THE AFFIDAVITS FILED BY THE HAWALA PARTIES WITH THE SALES TAX DEPARTMENT , THEREIN DEPOSING THAT THEY HAD ONLY PROVIDED BOGUS BILLS T O THE BENEFICIARIES AND NO GENUINE SALES WERE MADE, AS WELL AS THAT THE AMOUNTS RECEIVED BY THEM VIDE ACCOUNT PAYEE CHEQUES FROM THE BENEFICIARIES WERE RETURNED IN CASH AFTER DEDUCTION OF 1% COMMISSION WHICH WAS CHARGED FOR PROVIDING THE BOGUS BILLS, THUS DID CAST A VERY HEAVY ONUS ON THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE PURCHASE TRANSACTIONS CLAIMED TO HAVE BEEN MADE FROM THE SAID PARTIES. WE HOWEVER FIND THAT THE ASSESSEE INSTEAD OF PROVING TO THE HILT THE GENUINENESS OF THE PURCHASE TRANSACTIONS MADE FROM THE AFORESAID RESPECTIVE SUPPLIER PARTIES, VIZ. BY PRODUCING THE ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 9 NECESSARY PARTIES FOR EXAMINATION B EFORE THE A.O ; PLACING ON RECORD COPY OF THE CONFIRMATIONS ; FURNISHING THE CURRENT MAILING ADDRESS OF THE PARTIES ; PLAC ING ON RECORD COP IES OF THE DELIVERY CHALLANS AND TRANSPORT RECEIPTS , BANK STATEMENTS AND OTHER RELATED DETAILS, HOWEVER, MERELY TOOK SUPPORT OF THE FACT THAT THE PAYMENTS TOWARDS THE PURCHASES UNDER CONSIDERATION HAD BEEN MADE TO THE SAID PARTIES VIDE ACC OUNT PAYEE CHEQUES, AS WELL AS RELIED ON A HOST OF JUDICIAL PRONOUNCEMENTS. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE FACTS INVOLVED AND THE CONDUCT OF THE ASSESSEE , IT CAN SAFELY BE CONCLUDED THAT THE ASSESSEE HAD ONLY OBTAINED BOGUS BILLS F ROM THE SAID RESPECTIVE PARTIES AND NO GENUINE PURCHASES WERE MADE FROM THEM. WE FURTHER FIND OURSELVES TO BE IN AGREEMENT WITH THE VIEW ARRIVED AT BY THE CIT(A), THAT NOW WHEN BOTH THE PURCHASE TR ANSACTIONS UNDER CONSIDERATION AND THE CORRESPONDING SALES WERE FOUND TO HAVE BEEN ROUTED THROUGH THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, IT CAN SAFELY BE CONCLUDED THAT THE ASSESSEE WHO HAD CARRIED OUT PURCHASES OF THE AFORESAID GOODS FROM THE OPEN/GREY MARKET , THEREAFTER , IN ORDER TO FACILITATE ROUTING OF THE SAID PURCHASE TRANSACTIONS THROUGH HER BOOKS OF ACCOUNTS , HAD THUS OBTAINED BOGUS BILLS FROM THE AFOREMENTIONED PARTIES. WE FIND THAT THE CIT(A) HOLDING A COVICTION THAT THE PURCHASES MADE BY THE ASSESSEE FROM THE OPEN/GREY MARKET ON THE BASIS OF BOGUS BILLS COULD SAFELY BE HELD TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS AT AN INFLATED PRICE , AS AGAINST THE ACTUAL PURCHASE PRICE PARTED BY HER FOR THE SAID GOODS, T HUS TAKING SUPPORT FROM THE DECISIONS RENDERED IN THE CASE OF SANJAY OIL CAKE MILLS (SUPRA) AND VIJAY PROTEINS (SUPRA) HAD DISALLOWED 25% OF THE AGGREGATE VALUE OF THE BOGUS PURCHASE S. WE HAVE GIVEN A ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 10 THOUGHTFUL CONSIDERATION TO TH E VIEW ARRIVED AT BY THE CIT(A) AND FIND SUBSTANTIAL FORCE IN THE SAME. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE FACT THAT THE ASSESSEE HAD DURING THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(A) ON HIS OWN CAME UP WITH AN OFFER THAT 25% OF THE VALUE OF THE BOGUS PURCHASES MAY BE DISALLOWED, THEREFORE, NOW WHEN THE CIT(A) ON THE BAS I S OF HIS AFORESAID OBSERVATIONS HAD DISALLOWED 25% OF THE VALUE OF SUCH PURCHASES WHICH WERE RECORDED IN THE BOOKS OF ACCOUNTS ON THE BASIS OF BOGUS BILLS, THEREFORE, THE ASSESSEE CANNOT BE ALLOWED TO TURN AROUND AND AGITATE THE SAID QUANTIFICATION OF DISALLOWANCE RELATABLE TO THE BOGUS PURCHASES BY THE A.O. WE ARE FURTHER OF THE CONSIDERED VIEW THAT THE CASE LAWS RELIED BY THE ASSESSEE IN ORDER TO DRIVE HOME HER CONTENTION THAT A LOWER RATE OF DISALLOWANCE OF PURCHASES WAS CALLED FOR IN HER HANDS, ARE DISTINGUISHABLE ON FACTS, AS A PERUSAL OF THE SAME REVEALS THAT IN NEITHER OF THE SAID CASES THE ASSESSEE HAD OFFERED /VOLUNTEERED A DISALLOWANCE OF 25% OF THE PURCHASES BEFORE THE CIT(A) . WE THUS AFTER GIVING A THOUGHTFUL CONSIDE RATION TO THE FACTS OF THE CASE FIND OURSELVES TO BE IN AGREEMENT WITH THE VIEW ARRIVED AT BY THE CIT(A) , AND THUS UPHOLD HIS ORDER TO THE SAID EXTENT . THE APPEAL FILED BY TH E ASSESSEE IS DISMISSED. 10. WE NOW ADVERT TO THE CONTENTIONS OF THE LD. D.R, WHEREIN THE LATTER HAD AVERRED THAT THE CIT(A) HAD ERRED IN SUBSTITUTING THE ADDITION OF THE ENTIRE VALUE OF PURCHASES OF R S. 54,29 , 738/ - MADE BY THE A.O BY AN AMOUNT OF RS. 13,57,434/ - (25% OF RS. 54,29,738). WE FIND THAT AS APPRECIATED BY THE CIT(A), IT REMAINS AS A MATTER OF FACT BORNE FROM RECORD , THAT AS AGAINST THE PURCHASE T RANSACTIONS UNDER CONSIDERATION THE CORRESPONDING SALES HAD ALSO BEEN ROUTED AND ACCOUNTED FOR BY THE ASSESSEE IN HER BOOKS OF ACCOUNTS. WE ARE OF THE ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 11 CONSIDERED VIEW THAT NOW WHEN BOTH THE PURCHASE AND THE CORRESPONDING SALE S ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, IT CAN SAFELY BE CONCLUDE D THAT THE ASSESSEE WHO HAD CARRIED OUT PURCHASES OF THE AFORESAID GOODS FROM THE OPEN/GREY MARKET , HAD THEREAFTER IN ORDER TO FACILITATE ROUTING OF THE SAID PURCHASE TRANSACTIONS THROUGH HER BOOKS OF ACCOUNTS THEREIN OBTAINED BOGUS BILLS FROM THE AFOREMENTIONED PARTIES. WE ARE PERSUADED TO ACCEPT THE VIEW ARRIVED AT BY THE CIT(A) THAT THE ASSESSEE BY PURCHASING THE GOODS FROM THE OPEN/GREY MARKET MUST HAVE BEEN BENEFITTED BY PROCURING SUCH GOODS AT A LOWER RATE, AS AGAINST THAT AS STOOD R EFLECTED IN THE INFLATED BOGUS BILLS PROCURED FROM THE AFOREMENTIONED PARTIES. WE FIND THAT THE ESTIMAT ION OF SUCH MARGIN @25% FAIRLY TAKES CARE OF THE MARGINS AND DISCOUNTS THAT HAD BEEN EARNED BY THE ASSESSEE FROM PROCURING THE AFORESAID GOODS FROM O PE N/ G REY MARKET. WE FIND THAT THE CASE LAWS SO RELIED UPON BY THE LD. D.R, VIZ. JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT - II, CHANDIGARH VS. NARENDER KUMAR GUPTA (2015) 55 TAXMANN.COM 371 (PUNJAB & HARYANA) AN D THE ORDER P ASSED BY THE HONBLE SUPREME COURT WHILE DISMISSING THE SPECIAL LEAVE PETITION (SLP) OF THE ASSESSEE IN THE CASE OF N.K PROTEINS LTD. VS. DCIT [SLP(C)CC NO(S).769 OF 2017] ARE DISTINGUISHABLE AS AGAINST THE FACTS INVOLVED IN THE CASE OF THE PRESENT ASSESSEE. WE FIND THAT IN THE CASE OF NARENDER KUMAR GUPTA ( S UPRA) , IT WAS NEVER THE CASE OF THE ASSESSEE THAT THE SALES/ RECEIPTS CORRESPONDING TO THE PURCHASES MADE BY THE ASSES SEE CONTRACTOR IN THE SAI D CASE WERE ALSO FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THUS, UNLIKE THE FACTS INVOLVED IN THE AFORESAID CASE LAW AS HAS BEEN RELIED UPON BY THE LD. D.R, IN THE CASE OF THE PRESENT ASSESSEE THE CIT(A) HAD AT PAGE 15 PARA 5.6 OF HIS OR DER CATEGORICALLY OBSERVED THAT THE SALES CORRESPONDING TO THE PURCHASES UNDER CONSIDERATION, STOOD DULY ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 12 RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. WE THUS ARE OF THE CONSIDERED VIEW THAT AS THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE ARE D ISTINGUISHABLE AS AGAINST THOSE INVOLVED IN THE CASE OF NARINDER KUMAR GUPTA (SUPRA), THEREFORE, IT CAN SAFELY BE CONCLUDED THAT THE RELIANCE PLACED BY THE LD. D.R ON THE SAME IS MISCONCEIVED. WE FURTHER FIND THAT THE RELIANCE PLACED BY THE LD. D.R ON THE ORDER OF THE HONBLE SUPREME COURT WHILE DISMISSING THE SLP OF THE ASSESSEE IN THE CASE OF N.K PROTEINS LTD. (SUPRA ) IS A LSO DISTINGUISHABLE ON FACTS. WE FIND THAT IN THE CASE OF N.K PRO T EINS LTD. (SUPRA) SEARCH PROCEEDINGS WERE CONDUCTED ON THE ASSESSEE, IN THE COURSE OF WHICH CERTAIN SIGNED BLANK CHEQUES AND VOUCHERS OF THE PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE BEEN MAKING PURCHASES WERE FOUND . IT WAS THUS IN THE BACKDROP OF THE AFORESAID FACTUAL MATRIX , THAT THE REVENUE HELD THAT THE C ASH DEPOSITED IN THE BANK ACCOUNTS OF THE SAID RESP ECTIVE SUPPLIER PARTIES WAS THE UNDISCLOSED INCOME OF THE ASSESSEE , AND THE PURCHASES MADE THERE FROM WERE TO BE HELD AS BOGUS . WE ARE OF THE CONSIDERED VIEW THAT THE FACTS INVOLVED IN THE CASE OF THE PR ESENT ASSESSEE ARE ABSOLUTELY DISTINGUISHABLE AS AGAINST THE PECULIAR AND IRREBUTABLE FACT S AS HAD EMERGED IN THE CASE OF N.K PROTEINS LTD. (SUPRA). 11. WE THUS BEING OF THE CONSIDERED VIEW THAT THE CIT(A) IN THE BACKDROP OF THE FACTS OF THE CASE HAD BY WAY OF A WELL REASONED ORDER UPHELD THE ADDITION TO THE EXTENT OF 25% OF THE VALUE OF THE PURCHASES UNDER CONSIDERATION, THUS FINDING NO INFIRMITY IN THE VIEW ARRI VED AT BY THE CIT(A) , THUS UPHOLD HIS ORDER . 12. THE APPEAL OF THE REVENUE IS DISMISSED. 1 3 . THAT THE APPEAL OF THE ASSESSEE MARKED AS ITA NO. ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 13 4553/MUM/2015, AS WELL AS THE APPEAL OF THE REVENUE, MARKED AS ITA NO. 4560/MUM/2015, ARE DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 31 .07.2017 SD/ - SD/ - ( G.S PANNU ) ( RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 31 .0 7 .2017 / 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 ITA NO(S). 4553 & 4560/MU/2015 - INDIRA A. ROHRA 14