ITO 14(2)(3), MUMBAI V. M. LACHHMANDAS & CO,., MUMBAI

ITA 4628/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9675 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: DEEPAK TRALSHAWALA LD
• Keywords: Bogus purchase
• Section: 143(3); 147; 69

Judgement Text

ITA NO.4628/M/2014 M. LACHHMANDAS & CO. ASSESSMENT YEAR 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.4628/MUM/2014 ( / ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER 14(2)(3) EARNEST HOUSE ROOM NO.306,3 RD FLOOR NARIMAN POINT MUMBAI 400 021 / VS. M. LACHHMANDAS & CO. 282, KALABADEVI ROAD MUMBAI -400 002 ./ ./PAN/GIR NO. AAAFM-4289-M ( ! /APPELLANT ) : ( '#! / RESPONDENT ) A SSESSEE BY : DEEPAK TRALSHAWALA, LD.AR RE VENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 05/09/2017 / DATE OF PRONOUNCEMENT : 08/09/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2006- 07 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)- ITA NO.4628/M/2014 M. LACHHMANDAS & CO. ASSESSMENT YEAR 2006-07 2 25 [CIT(A)], MUMBAI DATED 28/04/2014 QUA CERTAIN RELIEF PROVIDED TO THE ASSESSEE AGAINST BOGUS PURCHASES. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESIDENT FIRM ENGAGED IN THE BUSINESS OF TRADING & PROCESSING OF INTERLINING CLOTH WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 28/01/2014 AT RS.70,23,100/- AFTER ADDITION OF BOGUS PURCHASES U/S 69 FOR RS.67,50,418/-. THE ORIGINAL RETURN OF INCOME W AS FILED ON 19/10/2006 AT RS.2,72,682/- WHICH WAS PROCESSED U/S 143(1). 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 28/04/2 014 WHERE THE ADDITION HAS BEEN RESTRICTED TO 10% OF BOGUS PURCHASES. AGGRIEVED BY THE RELIEF PROVIDED BY LD. CIT(A), THE REVENUE IS I N FURTHER APPEAL BEFORE US. 4. THE LD. REPRESENTATIVE, AT THE OUTSET, DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE CONTESTED THE ADDITION OF 10% AS CONFIRMED BY LD. CIT(A) BEFORE THIS TRIBUNAL VIDE ITA NO. 3392/MUM/2 014 ORDER DATED 23/11/2016 WHERE THE ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL. A COPY OF THE ORDER HAS BEEN PLACED BEFORE US. THE LD . REPRESENTATIVE FOR THE ASSESSEE STATED THAT SINCE ADDITION OF 10% HAS BEEN CONFIRMED BY THE TRIBUNAL, THE SAME IS QUITE FAIR AND REASONABLE AND NO FURTHER ADDITION IS WARRANTED FOR IN THE CIRCUMSTANCES. PER CONTRA , LD. DR PLEADED FOR HIGHER ADDITION. 5. HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELE VANT MATERIAL ON RECORD INCLUDING CITED ORDER OF THE TRIBUNAL IN ASS ESSEES APPEAL. WE ARE OF THE CONSIDERED OPINION THAT THERE COULD BE NO SA LES WITHOUT CORRESPONDING PURCHASES. FURTHER, WHEN THE ASSESSEE IS IN POSSESSION ITA NO.4628/M/2014 M. LACHHMANDAS & CO. ASSESSMENT YEAR 2006-07 3 OF PRIMARY PURCHASES DOCUMENTS AND TURNOVER HAS NOT BEEN DISPUTED, THEN IN SUCH A SITUATION, THE ADDITION, WHICH COULD BE MADE, WAS TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHA SE TRANSACTIONS TO FACTORIZE FOR PROFIT ELEMENT EARNED BY ASSESSEE AGA INST POSSIBLE PURCHASE OF MATERIAL IN THE GREY MARKET AND UNDUE BENEFIT OF VAT AGAINST BOGUS PURCHASES, WHICH LD. CIT(A) HAS RIGHT LY DONE. THEREFORE, FINDING THE SAME QUITE FAIR AND REASONABLE, WE SEE NO REASON TO INTERFERE WITH THE SAME. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH SEPTEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08. 09.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. '%- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI S